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Creating the strategy-focused IT department

By Bruce Jones

The contribution of IT departments to overall organisational success has been of vital concern to IT directors for a number of years. Rising IT budgets have forced directors to prove the value of their departments to the overall success of the company, yet the reputation and future success of a company often depends substantially on the capabilities and alignment of the IT department.

* As organisations move towards tight economic, bottom line-focused and more value-driven models, it becomes increasingly important for them to expand beyond simple, operational measures. To be effective, companies need a forward-looking, integrated approach to IT management that takes into account the department’s relationships with all parts of the organisation – IT cannot be an island.

Scorecards have proved to be a popular method for organisations to manage how their strategy is implemented and measured. They enable organisations to prioritise key strategic initiatives and measures, allocate the appropriate time and resources to the most important issues, align IT strategy with business strategy and motivate people to achieve the targets.

But putting strategy into action is a problem in most organisations. The failure does not stem from bad decisions, but from an inability to mobilise the organisation to execute its strategy. Since IT is central to most organisations and the IT staff is accustomed to managing projects and delivering service levels, the IT department is in a prime position to play a significant role in
helping an organisation realise its strategy.

The strategy-focused IT department is created using five principles:

* Lead from the top.
* Conduct an organisational assessment, discuss possible future business situations and affirm that value is derived from alignment.
* Translate the strategy into operational terms.
* Turn corporate objectives into IT objectives and define performance measures for each objective.
* Align the department with its strategy.
* Develop strategic IT themes; identify IT processes, projects and internal initiatives supporting each objective. * Then rank IT processes, projects and
internal initiatives and align responsibilities.
* Make strategy everyone’s job.
* Cascade scorecard plans, making individual scorecards for employees. Develop incentives that are aligned to employee scorecards.
* Make strategy a continuous process.
* Tie performance to budget and link with financial processes. Evaluate results
and make changes to the strategy as necessary.

By focusing on a holistic view of the IT contribution to the business, organisations can identify the true sources of problems and the best practices that lead to future success. Strategic performance management gets everyone in the organisation to focus, communicate and collaborate on strategy from a single vantage point … and turns that strategy into action.

Bruce Jones is manager of sales support at SAS Institute, a market leader in providing business intelligence software and services for enterprise intelligence. He can be contacted at SAS Institute on (011) 713-3400.

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The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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