Process 1: Define an IT Service Strategy
An IT service strategy determines which services are required to support business goals and objectives. Business and IT management must carefully discern which initiatives offer the highest business value while ensuring the availability of necessary resources and the commitment to deliver on the investment.
A successful service strategy will ensure that:
- IT goals are aligned to business goals.
- Annual IT initiatives that support business goals have been identified.
- There is agreement on both the strategy and a corresponding plan for achieving the goals and initiatives.
- The strategy is assessed against business outcomes.
- Opportunities for improvement are identified.
Activities: Develop an IT Service Strategy
The following table lists the activities involved in this process. These activities include:
- Aligning IT goals to business goals.
- Mapping and prioritizing business functions to the IT service portfolio.
- Defining initiatives.
- Finalizing and agreeing on an annual strategy.
- Managing performance.
Table 5. Activities and Considerations for Developing an IT Service Strategy
Activities
Considerations
Align IT goals to business goals
Key questions:
- What is the mission of the organization? Does it differentiate itself by having innovative products, outstanding customer connections, or optimized cost structures?
- What are the organization’s goals? How can IT state its goals in a way that demonstrates direct support of business goals?
- Is the organization a non-profit or government agency? Is its mission guided by legislation or public policy?
- How is the strategy of the business measured? Does the organization put value on customer satisfaction, profit, new products, or time to market? What measurements should IT use to show support for these goals? (Examples might include business SLA statements, cost optimization, or support for business functions.)
- Which IT and business representatives should be accountable for the alignment of goals?
Inputs:
- Senior business and IT leadership commitment and engagement to define strategic direction
- Balanced scorecard, business plans, shareholder reports, and strategic roadmaps
- An understanding of what business processes might be common among similar business types (such as retail, manufacturing, or those in the public sector)
- An understanding of which processes or functions deliver differentiation or a unique added value
Outputs:
- A vision statement of the IT organization’s mission, role, and objectives
- A set of IT goals and objectives that demonstrates alignment to the organization’s goals and objectives
Best practice:
- Create a strategy group that includes senior management from both IT and the business. Include individuals who have a forward-looking view, are respected, have operational understanding, and are accountable to IT.
Map and prioritize business functions to IT service portfolio
Key questions:
- Which business processes or functions provide unique differentiators for the organization? Does the organization excel in manufacturing efficiency, real-time inventory, research and development expertise, sales automation, or marketing reach?
- Do certain regulatory requirements apply to the business function or process?
- Which operational business processes and functions are required to support the efficiency and effectiveness of the organization? Does the finance department engage in trading currency and investments? Does the manufacturing department rely on just-in-time inventory replenishment from its vendors? Do customers and partners rely on systems for ordering?
- What risk factors must be taken into account? If a business function is not available, what is the cost to the company? If business service is not reliable, does the business risk a public-image or breach-in-policy problem?
- What key IT services are missing? Which services fail to provide adequate support to the organization?
Inputs
- Business functions
- Current IT service portfolio
- Current business and IT goals and objectives
Outputs
- Prioritized list of business processes and functions
- Map of IT services that support the prioritized business functions
Best practices
- Consider separating the business functions into two categories:
- Operational: Those functions that support the day-to-day operations of the business but are not unique or do not provide a competitive advantage to the organization (such as payroll, invoicing, and tax preparation). These operational services can be optimized for efficiency and cost savings.
- Strategic: Those functions that provide the business with a unique differentiator for their industry. These might include real-time inventory between suppliers and the organization, research and development services, or systems for manufacturing, design, or market research. These services can be optimized for value and competitive advantage.
Define initiatives
Key questions:
- What are the key initiatives required to meet the business objectives? If the business is expanding or acquiring assets, can the current IT infrastructure support that growth? Will expansion mean new requirements for current internal systems, such as new state regulations?
- How can IT innovation contribute to meeting business objectives? How can data center trends such as lower energy consumption or virtual environments contribute to key business initiatives like continued growth, seasonal demand, or lowering costs?
- How will initiatives be prioritized? What are the criteria for this prioritization? What governance guidelines should be part of the criteria? What risk factors should be considered?
- What is the current capability of the IT organization? Can it deliver on the strategic initiatives? Is IT adequately staffed, and is the staff fully prepared with the right skills? What are the financial constraints? How can partners provide value? Can IT services be acquired?
Inputs:
- Set of defined business objectives
- Past performance metrics
- Technology trends and research
- Organization health metrics
Output:
- List of initiatives to support IT service strategy
Best practices:
- An initiative demonstrates linkage to the organization’s objectives and should be measurable. Proposed projects should help achieve the initiatives.
- Create initiatives that are SMART: Specific, Measurable, Achievable, Results-oriented, and Time-bound. Examples for a given time period might include:
- Standardizing and consolidating customer databases.
- Increasing customer satisfaction through the support of phones and PDAs and integrating them into the organization’s e-mail and collaboration system.
- Improving security through the development of policy, a software and patch update process, audit tools, and communication strategy.
- Consider the acquisition of IT services to both augment current offerings and take advantage of better delivery at comparable prices. (These services might include desktop management, message filtering, and hosting.)
Finalize and agree on annual IT strategy
Key questions:
- Which business representatives and IT representatives need to agree to and sponsor the initiatives?
- How will the strategic plan be communicated? How will the organization validate that the plan is known and understood?
- How should the organizational plan be articulated? Should staff development, partner strategy, and recruiting/retention be part of the plan?
Best practices:
- Include the following components in the strategic plan:
- IT vision statement
- IT objectives mapped to business objectives
- Key initiatives
- Organization plan
- Technology trends
- List of accountable management
- Metrics for measurement
- Plan for communicating performance
- Link to IT service portfolio and tactical plans
Manage performance
Key questions:
- How should strategy performance be measured? How will the IT performance measurements be included in the overall performance?
- How often should management reports be shared with the board, senior business leaders, and partners?
- How often should status reports be generated? How can status reports be delivered to encourage better performance and course correction?
- How should improvement opportunities be identified?
Inputs:
- Service management review (see Plan Overview for more information)
- Business metrics tied to IT services
Outputs:
- Set of IT performance metrics
- Communication plan for status reports and management reports
- Organization-wide reports that measure the IT initiatives and their support of the organization’s objectives
Best practice:
- Publish metrics on a regular basis to communicate performance improvements or declines.
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