Building a Strategic IT Plan

Understand Your Company's Needs

 Understand Your Company's Needs
Goals and Objectives
Definition of Goals and Objectives
• Goals – are long-term aims that you want to
accomplish.

• Objectives – are concrete attainments that can be

achieved by following a certain number of steps.

Goals and objectives are often used interchangeably, but

the main difference comes in their level of concreteness.
Objectives are very concrete, whereas goals are less
structured.
• Mission statement
• Organisational objectives
• Core competencies for the organization
• Key performance indicators
• Business strategies
• Organisational structure
• Managerial and employee competency
• Job description
• Individual objectives
• Action plans
• Performance appraisal
• Individual performance gap review
• Succession planning
• Individual development plans
• Employee training
• Recognition, reward and remuneration
Competency Level
 Definitions - Strategy
• a word of military origin, refers to a plan of
action designed to achieve a particular goal
 Definitions - Information Technology
• As it pertains to technology, Information Technology (IT) is the
"technology" used for the study, understanding, planning, design,
construction, testing, distribution, support and operations of software,
computers and computer related systems that exist for the purpose of
Data, Information and Knowledge processing.

• As it pertains to industry, Information Technology (IT) is the "industry"

that has evolved to include the study, science, and solution sets for all
aspects of Data, Information and Knowledge management and/or
processing.

• As it pertains to organizations or organizational structures, Information

Technology (IT) is the organization in an enterprise or business that is held
responsible and accountable for the technology used for planning, design,
construction, testing, distribution, support and operations of software,
computers and computer related systems that exist for the purpose of
Data, Information and Knowledge management and/or processing.
 Definitions - Plan
• A plan is typically any procedure used to
achieve an objective. It is a set of intended
actions, through which one expects to achieve
a goal.
 Definitions - Strategic IT Plan
• A strategic plan is a long term plan that is
relevant to the current company needs and
situation. The objective of developing a
strategic IT plan is to define a vision of where
you are headed and the approximate timing
and cost to make it happen.
 IT Strategic Projects
• Cash flow
• Profitability
• Productivity
• Gaining Market Share
• Significant differences in the way we conduct
business
• Significant client service enhancements
IT Project Hierarchy
Return on Investment
What is appropriate for your company
Company A Company B
100 Million 100 Million
 Or Does it?
Look at Company A Closely
• Has grown incremental sales of new business
• Significant investments in automation
• Billing costs 3% of total revenue
• 25 days average collection
 Or Does it?
Look at Company B Closely
• Growth through acquisition
• Very little progress in automating billing
processes
• Has 3 separate billing and collection
organizations in separate cities using different
technologies
• Spends 5% of revenue on billing
• 80 days average collection
 Opportunities
Company A Company B
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 Opportunities
Company A Company B
• Improve billing • Assimilation
• Electronic payment • Electronic billing
• MIS • MIS
• Positioning for • Automate reporting
acquisition
• Automate reporting
 Foundation is Important
• Establish your change processes
• Fill skill gaps in the organization
• Create project management disciplines
• Focus on your infrastructure so that you have
stability and scalability for growth
• Address significant functionality issues in your
business applications required to maintain
current business processes
 How high can you go?
• Company capabilities that are dependent on
technology
• Automation opportunities that improve profitability or
cash flow
• Functional technology gap filters important for
positioning the company
• Opportunities that differentiate the company
• IT services required to support the future company
• The IT organization required to support the new
business
 What is needed in technology to
support the company’s growth plans ?
• If plans are to acquire new companies, you
will need IT due diligence knowledge
• as well as project management skills for
assimilation. You will also need to have
• infrastructure capability to add large “chunks”
of people at a time to your networks.
• If you are adding new software product lines,
you may need additional application experts,
programming, and support resources.
 What are needed capabilities to help the
company achieve it’s financial objectives ?
• You want to understand the IT expense as a per cent of revenue
expected. Rather than being driven by senior management, it’s
better for the CIO to understand the dynamics of this number and
to drive an expectation with senior management as to what to
expect.
• Quantify key internal department needs that helps them achieve
supportive financial objectives for the company.
• Quantify key initiatives that allow IT and other company
departments to support company growth in a manner that allows
their department to grow at a slower rate.
• Quantify key issues related to outside clients that help the company
retain clients, increase clients, or increase sales to existing clients
while maintaining a relatively constant IT expense.
Identify automation projects that improve
the company’s profitability or cash flow.
• Quantify all projects that replace manual
processes with an automated process.
• Discussion on ROI (Return on Investment) will
come later.
What are the projects that can differentiate the
company from competitors?
• Talk to senior management, step “out of the
box”, and concentrate on concepts that would
make you want to buy stock in the company.
Things that are innovative, progressive, cost
effective, valued by clients, etc. are areas that
you’re looking for.
 Quantify key gaps in IT services or
application functionality needed ?
• For the company
• For internal departments
• For external clients
• For new sales
Are there assimilation opportunities to
eliminate redundancy ?
• Elimination of redundant technologies
• Elimination of duplicate departments
• Elimination of duplicate processes
Are there key cost leverages in IT ?
• Large distributed wide area networks often have
cost savings opportunities.
• Reviewing long distance phone bills for
distributed office environments usually has cost
savings opportunities.
• Eliminating organizations that do not compliment
a company’s core competency can have large
benefits.
• Standardizing equipment purchases might have
cost savings.
 Are there major employee productivity
gains through innovation of technology ?
• IT quality improvements
• Department productivity improvements
through automation
Can certain improvements eliminate waste,
bad debt, or lost sales ?
• Identify all items that achieve greater
profitability
 Back to A & B
• $100 Million • $100 Million
• 1000 • 1000
• $12 Million (12%) • $7 Million (7%)
• 1 • 3
• 1 • 3
• 75% • 5%
• $3 Million • $5 Million
• 25 Days • 80 Days
 Strategies
1. Improve Electronic Billing 1. Assimilate the 3
to 90% technologies
2. Develop electronic process 2. Develop electronic billing
from insurance carriers for 70% of the business
3. Develop enhanced MIS 3. Implement a company
4. Integrate scanning and automated report
imaging technologies distribution system
5. Position It organization for
acquisition and due
diligence assimilations
6. Implement a company
automated report
distribution system
 Backward or Forward

• Insure your plans and objectives are

consistent with the company’s needs
• Major projects must be justified or have a
tangible value to the company.
 Defining Key Milestones

• Technology Assimilation Initiative

– Technology 1
– Technology 2
– Technology 3
• Billing Automation Initiative
– Clearinghouse #1
– Clearinghouse #2
– Major Payer A
– Major Payer B
– Major Payer C
What are the prerequisites
 Quantify needs for each strategic project

• Staff
• Budget
• Other resources
Staff
Budget
Other Resources
 If your doctor told you that you had a viral
upper respiratory infection which resulted from
inflammation of the mucous membranes of the
nasal cavity
What is the critical path?
 What is the critical path?
• Technology Assimilations Initiative
– Technology 1
– Technology 2
– Technology 3
• Billing Automation Initiative
– Clearinghouse #1
– Clearinghouse #2
– Major Payer A
– Major Payer B
– Major Payer C
• Automated Report Distribution Initiative
– P&L Distribution
– Revenue Reports Distribution
 Define Project Timeframes

• Break 18 to 24 months into 3 month periods

• Break 36 to 48 months into 6 month periods
• Be realistic
• Allow room for uncertainties
Time frames
Your MD wants you to get to the point
• He needs the answer
• Very little detail
• Clear benefits
• Costs
• Risks
• Implications if the project is not done?
Picture Story
Picture Story
 Present the plan
• Objectives
– Create awareness of the major initiatives
– Gain validation from senior management
– Create awareness of dependencies
– Create awareness of size and complexity of plan
– Gain agreement top go forward
 Present the plan
• Return on investment
– Objective
– Benefits
– Estimated cost and payback
– Estimated time frame

Payback period = Total Cost/Net Monthly Savings

 Meeting Concluded
• Brilliant Meeting

Now the work starts

Questions