IT Strategy: Align Your IT Vision For Business Value (Practical IT Manager GOLD Series Book 4)

Mike Siscos
Practical IT Manager GOLD Series
IT Strategy
align your IT vision for business value
helping IT managers of the world

achieve more success
Copyright MDE Enterprises, Inc.

www.itmanagerinstitute.com
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Practical IT Manager GOLD Series
IT Strategy
align your IT vision for business value

2nd edition

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Introduction
Hello and welcome to the Practical IT Manager GOLD Series. I'm
Mike Sisco, President of MDE Enterprises, Inc. and a career IT
manager and CIO of more than 20 years.
Since 2000, I have devoted my life to, "helping IT managers of the
world achieve more success". My practical processes and tools are
used by thousands of IT managers in every part of the world.
Mike Sisco, ITBMC
The challenge of managing technology resources has never been

more demanding than it is now. Change occurs more rapidly and
technology resources are in more demand than ever before.
People and companies respond to strong leadership. Effective leadership skills give a
technology manager an edge in creating and maintaining a stable business
environment. This leads to more success and an IT organization that's valued and
appreciated by the business managers of your company.
The material contained in the entire Practical IT Manager GOLD Series of books has
been developed from my experience in managing technical organizations of all sizes for
more than 20 years. The examples are real life experiences of things I know to work, or
hard lessons learned from things that did not work. I developed every process and tool
you will learn about to help me manage IT organizations during my career. They worked
for me and will for you as well.
Two tools I use to enhance the material or to clarify a point are:
Sidebar: a comment or clarification to help make a point
Personal Note: a personal experience or war story to reinforce a point.
You will find a bit of humor to make the reading more enjoyable and to emphasize
certain points. Because of my very dry sense of humor, you may have to look for the
humor, , , sorry about that. I also hope you like the images I pop in at times to make the
reading more interesting.

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The Practical IT Manager GOLD Series includes the following titles:

IT Management-101: fundamentals to achieve more
IT Assessment: the key to IT success
IT Strategy: align your IT vision for business value
IT Organization: right-size your organization for success
IT Project Management: a practical approach
IT Staff Motivation and Development: build a world class team
IT Asset Management: tracking technology assets
IT Budgeting: operational and capital budgeting made easy
IT Due Diligence: merger & acquisition discovery process
IT Assimilation: consolidating redundant technologies
What to Look For in a CIO: get more value from your IT investment
, , , plus more titles to come
To view the Table of Contents for each publication or to discover other IT manager
products and services we offer , go to www.itmanagerinstitute.com for more information.
Interested in our IT Manager Institute and IT Business
Manager Certification (ITBMC) program? It is one of the
most successful IT manager training programs in the
industry and available in both classroom and self study
formats. Go to www.itmanagerinstitute.com for details.
Managing IT organizations at a high level is serious
business, but having fun along the way is also important. I
hope you find the material helpful in your quest and
welcome your feedback. You may contact me at
mike@mde.net .
Best regards and success,
Mike Sisco, ITBMC
MDE Enterprises, Inc.

Additional resources from Mike Sisco
ITLever Blog www.itlever.com
Free tips and tools, , , updated frequently
IT Manager Institute www.itmanagerinstitute.com

Both classroom and self study versions are available
20 Minute IT Manager www.20minuteitmanager.com
Complete library of over 160 e-Learning sessions
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IT Strategy
Table of Contents
Introduction .
6
I. What is a Strategic IT Plan? .
7
II. Go With What is Appropriate 12
III. Are Proper Foundations in Place? 15
A. Lay the Foundation First .. 16
B. Identify Where You Want to Be . 16
C. Identify Where You Are .. 20
D. Work Backward or Work Forward? 23
IV. Strategy Development Steps an Overview . 24
V. Define Key Milestones (Major Projects) .. 30
VI. Identify Prerequisites . 33
VII. Quantify Needs for Each Strategic Project . 37
A. Staff . 38
B. Budget 40
C. Other Resources 41
VIII. Identify the Critical Path 42
IX. Define Project Timeframes 46
X. Draw the Strategic Plan Overview ... 51
XI. Present the Plan .. 57
A. Objectives .. 59
B. Return on Investment .. 61
C. Validation 63
D. Awareness . 63
XII. Make it a Company Strategy . 64
XIII. Now the Hard Part Implementation .. 68
XIV. The Value of Your Work . 70
XV. Sample IT Strategy . 73
XVI. Summary . 81
Appendix A
Appendix B
Appendix C
Where Do You Want To Be Questionnaire . 82

IT Strategy Projects Budget Summary ... 83
IT Strategy Project Dependencies 84

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I.
What is a Strategic IT Plan?
The term strategic implies long term versus tactical which relates to short term. So
far, so good. The answer as to what denotes a strategic plan for a company really has a
lot to do with the company. If you are IBM, your strategy is going to be much different
than a $100 million dollar software company.
The relevant importance to both companies is huge, just very different levels of strategy.
In another example, the strategic importance of plans for a company that is in the midst
of a turnaround will be much different than that of a more mature and stable company
positioning itself for growth.
So, we get back to the initial point:
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 youre headed and the approximate timing and cost to make it happen.
Long term might be a year, or it might be three. It all depends, you see.
Within this publication, I dont focus so much on how far into the future you need to
develop a strategic plan for as much as focusing on identifying the pertinent objectives
that should be accomplished for your company.
Depending upon the maturity of the company and the strategic project initiatives
required to achieve its goals, your timelines will vary.
In my publication, IT Management-101: fundamentals to achieve
more, I refer to a hierarchy of project priorities that you should pay
attention to as you plan the execution of IT projects. I wont go into the
same level of detail here, but we should spend just a moment to
explain in case you havent read the other publication.
Experience has taught me that to successfully implement strategic
projects, you must have a solid technology foundation in place.
Otherwise, as you implement major projects, you will constantly face
basic infrastructure and organization issues that slow you down.
In many cases it adds complexity and cost to your strategic project when you havent
paid your dues by building a solid foundation in order to be properly positioned to work
on strategic projects.

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Guard against building 2-legged stools before charging after strategic projects. It is
essential to have a solid foundation underneath you, , , otherwise everything will come
crashing down sooner or later.
2-legged stool
In IT Management-101, the chapter First Things First addresses this at length. As you
look at the IT Project Priority Hierarchy below, our focus in this publication is the top of
the pyramid, , , essentially the top two layers, strategic projects and business
application strategy.
Here is the thing, , , real value is in the top two layers, , ,

the Strategic Projects layer and the Business Applications
Strategy layer. Projects in these layers are where your
company can really cut costs and improve employee
productivity. Because of this, senior management wants the
IT organization to focus on projects in these two levels.
This is where the gold is to be found.

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Wait just a minute, , , most companies will require some time to get to real strategic
projects, especially if they do not have solid IT support foundations in place.
What happens is that a new CIO or IT manager will conduct an IT
assessment when he joins the company or takes over an IT
organization. Initially, he will place priority on things required to
stabilize the technical support environment, solidify systems and
networks, implement support processes that help the team deliver IT
support, etc.
These stabilizing and basic support issues tend to be in the bottom
three layers of the pyramid.
Once a manager has the IT staff focused on the short term and
immediate issues, he will begin work to develop a more long term
strategic plan, , , which is what we will do in this book.
Strategic projects tend to make a tangible difference in one of the following:
- Cash flow
- Profitability
- Productivity
- Gaining market share
- Significant difference in the way we conduct business
- Significant client service enhancement
- Other significant business value benefit
They tend to be bigger projects that provide more value. They take longer and cost
more and they tend to be projects that are in the top two layers of the pyramid.
Strategic projects have many flavors just like ice cream.
They might include supporting acquisitions of other
companies followed by assimilating the technology
components of the acquired companies.
It might be the automation of an existing process that is
highly manual in order to drive costs down by improving employee productivity.
It could be replacing a legacy business application system with a more robust software
application to meet the needs of your company.
There might be an introduction of an entirely new technology and process such as
scanning and image retrieval tied to an initiative to eliminate paper and related costs
associated with paper in the company.
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Whatever the projects are that are identified as strategic projects, their implementation
should provide a true return on investment and deliver tangible business value to the
company. We will discuss more on how to insure this is the case later.
How do you go about determining the list of projects that belong in a strategic IT plan?
Very good question!
As you conduct an assessment of the business to determine what your IT organization

works on, you will identify two distinct groups of issues
A. Business issues and needs of your companys business units.
B. IT issues and needs as you determine your IT organizations capability and
capacity to support the business.
All of these issues will need to be organized into projects and prioritized. Many will be
assigned to be worked on immediately to stabilize your environment or deal with urgent
situations, , , we call these tactical or immediate projects.
Larger projects are the projects that tend to be in the top two layers of the pyramid and
will be organized into a strategic IT plan, , , we will discuss exactly how to go about
developing one in this book.
After your assessment, you should list the projects in order of where they fall into the
hierarchy pyramid layers and go after first things first.
Once you begin implementing your tactical plan for the immediate, short term issues
you need to address, you should start developing your strategic plan. As you begin
implementing your 30 to 90-day tactical plans to address immediate issues, you learn
quite a bit about the company, your situation, and your staff. This insight is extremely
valuable as you develop a strategic plan.
In this book, I will take you step by step through a process to identify, organize, and
develop a strategic IT plan.
After you develop your vision, you need to present it to
senior management and gain their approval before
working on things, , , otherwise there is a very good
chance your focus will be out of sync with your
companys need.
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In order to insure you stay in sync with your companys needs, we will discuss what you
need to do in developing an IT strategy document and preparing to present it to your
senior management team.
Another extremely important part of getting an IT strategy approved by your senior
management team is for it to be cost justified and provide tangible benefits for your
company. To do this, your strategy must provide business value.
What is business value?
Business value helps the company in one or more of the following:
Increase revenue
Decrease cost
Improve productivity
Differentiate the company
Improve client satisfaction
You will learn much more about this as you read through this book. The thing I want to
emphasize right now is that everything you do in an IT support organization should
provide business value in some form or fashion. If it does not, you need to seriously
consider whether it is worth spending time and money on.
When you break these items down, you will find that every one of them has a financial
component in helping your company be a viable company, , , every single item.
The reason you need to focus so much on defining the business value that will be
achieved upon implementing your IT strategy is because senior management
understands financial information, , , they do not understand technology.
Discuss your IT strategy in business value terms and your senior management team will
not only listen, , , they will understand what you are saying. It wont happen if you
discuss your strategy in technology terms.
Hence, the title of this book and something we will reinforce throughout, , ,
IT Strategy: align your IT vision for business value

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II. Go With What is Appropriate

Lets take two company examples that we will use throughout this publication. Both are
small healthcare billing companies and at first glance they look almost identical.
Both generate $100 million in revenue a year.
Both have approximately 600 clients they provide billing services for.
They are in the same niche of healthcare so they are essentially competitors.
Because they are both relatively small companies and in the same industry segment,
you would think that they have similar challenges; so similar that possibly their strategic
IT plans would be pretty much the same.
Lets look closer.
Company-A has grown by selling new business and has made a significant investment
over the years in automating their billing process. Insurance bills are transmitted
electronically to insurance companies who pay the healthcare claims Company-A
generates. Company-A sends digital files instead of paper claims. As a result of the
billing automation investment, the companys billing and collections department costs
the company 3% of revenue, or about $3 million dollars a year.
Company-B has an entirely different set of circumstances. This company has grown
through acquisition and has made very little progress in automating their billing process.
The company also has three separate billing and collections organizations in remote
cities using different technologies. The result of this example is that the billing and
collections department is costing the company over 6% of revenue because most of the
work is done manually with clerical workers processing paper.

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Company-B processes the same dollar amount of bills to insurance carriers for the
same type of insurance claims as Company-A, but spends over twice as much in Billing
Department expenses to do the job, , , all because Company-A processes paper while
Company-B processes electronically.
In addition, an insurance carrier can reconcile and pay an electronic bill faster, so
Company-A receives payment for its electronic claims an average of 25 days from the
time the bill is processed versus Company-Bs 60-day average for its payment derived
from paper claims.
Not only is the cost lower for Company-A to do the work, , , they get paid much faster.
At first glance, you might think there is enough similarity between the two companies to
have a similar IT strategy. As you look closer like you would in conducting an IT
assessment, you quickly realize that each company has a unique set of circumstances
and that they really need completely different IT strategies.
Every company situation is different. There is no perfect blueprint available to establish
a strategic plan that works for every company. Opportunity, state of the business, and
what you have to work with dictate the strategic plan.
Let me repeat, , ,

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Of the two companies, which company has the greatest opportunity?

Well, they both have opportunity. Company-A has the best opportunity to attack
strategic projects that will fine tune the business such as introducing scanning and
imaging or workflow processes.
Company-B has opportunity everywhere you turn.
Just the little bit that I described says this company has a significant
opportunity to lower costs through automation. You can reduce the
number of people in the Billing Department in at least two ways:
A. Consolidate the three technology platforms and billing
processes to one
B. Automate the billing process
Additional opportunity comes out of the technology platform consolidation opportunities
from prior acquisitions for Company-B. Supporting multiple technologies and multiple
billing locations is more expensive and more difficult for the IT department to manage.
An aggressive IT manager can probably achieve more visible success faster in
Company-B because there is so much needed. The point is that the strategic projects
identified for these two very similar companies will be completely different because of
their dissimilar situations.
Make sense?
Going with whats appropriate for the company means identifying the projects that make
sense for the level of maturity and sophistication that exists in the company and projects
that achieve tangible value for the company.
It really doesnt matter that Company-A is further along in the automation of its billing
process. What really matters is that you develop an appropriate set of strategic
initiatives to help move your company forward based upon your situation.
While were on this subject, developing a strategic plan that makes sense for your
company means its a plan that senior management agrees with and will support. One
of the worst things an IT manager can do is to start working on projects without gaining
an endorsement from senior management. This is often called having an IT agenda
and is how an IT-Business Disconnect occurs.
Follow the steps I provide in conducting an IT assessment and what I share in this book
about developing and communicating an IT strategy and there is, , ,

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III. Are Proper Foundations in Place?

Step back a bit and size up the ability of your company to tackle strategic projects.
Before you begin building your strategic plan, you had better fully understand your
companys ability in two areas:
A. IT support capability and capacity
B. Non-IT departments ability to absorb change
If you have inherited an IT organization that needs
considerable help just to get to a level of providing basic
support, then dont waste your time developing a strategy that
goes after significant strategic projects just yet.
Youre kidding yourself if you think you will be able to pull them
off when your organization can barely crawl. You will need to
firm up the IT support components in the bottom three layers of
the IT Project Priority Pyramid we discussed first.
Its paddling upstream if you dont and ultimately you will fail.
This is not to say that you shouldnt start thinking about a long term strategy in your
mind. You should, , , just take the time to address basic support needs of your company
first. Its not the glamorous work that everyone wants to work on or that provides the
significant benefits to the company, but it is essential for your success.
Remember, to run you must walk first and before you walk, you must learn to crawl.

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A. Lay the Foundation First

Refer to the IT Project Priority Hierarchy again. Lay solid foundations first.
- Establish your change management processes.
- Fill skill gaps in the IT organization.
- Create project management disciplines.
- Implement client service processes.
- Focus on your infrastructure so you have stability and scalability for growth.
- Address significant functionality issues in your business applications required
to maintain current business processes.
Then, and only then, are you really well positioned to go for the fun projects laden with
opportunity called strategic projects.
Whats a good analogy? In football, you have to block
and tackle well before you can introduce intricate pass
plays. Players dont necessarily like the exercise and
practice required to get into shape and to develop
good fundamentals, but coaches know that all of this
is required to be successful.
An ability to execute the fundamentals well is the key
to success in any organization whether it is a sports
team or an IT support organization.
B. Identify Where You Want to Be
For days and weeks, possibly months you have been chomping at the bit (sorry for the
Tennessee slang). Youve been thinking constantly about what needs to get done and
finally, youre seeing the basic support issues materialize so youre about ready to
develop a true strategy.
Now what?
You might approach it similar to another part of managing an IT organization that you
are probably familiar with. There is a simple approach in designing a programming
change request. You always define the output or outcome you want first.
Likewise, defining where you want to be should be the first step in developing your
strategic plan.
How do you go about it?

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To determine where you need your technology resources to be in the future requires
you to look at many different components.
First, you have to know something about the industry youre in. Every industry has
success drivers. We will continue to use the examples of the two healthcare billing
companies as we go through this publication to help you visualize key points.
In healthcare billing, there is a golden rule that cash is king.
What this means is that the most important thing you can focus
on in IT in this industry niche is to do the things that help the
company achieve two objectives:
1. Generate a bill, or invoice, for medical services accurately
and submit it as quickly as possible to the insurance payor.
2. Collect as much of what was billed as fast as you can.
In the gasoline convenience store industry, managing
accounts payable with your vendors and understanding gasoline sales
dynamics is the success driver. To succeed in this industry you must maximize
your vendor discounts and manage your gasoline sales effectively.
Every industry has key success drivers for optimal profitability. Thats what
drives your CEO because he is charged with the viability and financial
performance of the company to the ultimate owners, the stockholders.
In most cases, industry success drivers have something to do with
technology!
The point is that you need to know what the companys success drivers are and how
technology factors in. Including projects that tap into these success drivers will be
important for your IT strategy. Early assessments should have indicated where the
golden eggs are for strategic initiatives that bring real value to your company.
If youre new to the industry, you must seek out help from others in the company or
outside it to learn what the key success drivers are for companies in this industry.
Another note is what we have said all along, all companies are different. A key success
driver for Company-A healthcare billing company might be a technology innovation that
helps differentiate the company from its competition or something that continues to
improve productivity in the company.
Company-Bs success driver is to start automating some of the billing business. To do
this effectively, the company probably needs to consolidate the three technologies and
billing centers into one to improve productivity and reduce cost.

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Second, your assessment sessions with senior managers of the company have
identified key objectives they are planning. These key objectives might be issues that IT
needs to support to position the company for managements future plans.
It never hurts to continue to validate what youve heard from the senior managers of the
company. Rephrase or summarize your discussions with senior management to validate
what you are hearing as well as to insure you can articulate it properly.
As you develop in your minds eye where you need to be out into the future, you are
essentially trying to put a stake in the ground concerning several issues:
- Company capabilities that are dependant on technology
- Automation opportunities that improve profitability or cash flow
- Functional technology gap fillers important for positioning of the company
- Opportunities that differentiate the company
- IT services required to support the future company
- IT organization required to support the new business
A short questionnaire that can help you establish where you want to be
follows with remarks on each question. A blank form is included in Appendix A.
Where Do You Want To Be Questionnaire

1. What is needed in technology to support the companys 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.
- If the company is growing rapidly, you will need to anticipate the cost and
upgrade issues associated with increased user levels of software licenses.
2. What are needed capabilities to help the company achieve its financial objectives?
- You want to understand the IT expense as a per cent of revenue expected.
Rather than being driven by senior management, its 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 help them achieve supportive
financial objectives for the company.
- Quantify key initiatives that allow IT and other company departments to
support company growth.
- Identify strategies that decrease cost, improve productivity, etc. that will help
improve the companys financial performance.
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3. Identify automation projects that improve the companys profitability or cash flow.
- Quantify all projects that replace manual processes with automated process.
- Discussion on ROI (Return on Investment) will come later.
4. What are the projects that can differentiate the company from competitors, or that
create a significant story for investors?
- 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 youre looking for.
5. Quantify key gaps in IT services or application functionality needed?
- For the company
- For internal departments
- For external clients
- For new sales
6. Are there assimilation opportunities to eliminate redundancy?
- Elimination of redundant technologies
- Elimination of duplicate departments
- Elimination of duplicate processes
7. 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 companys core
competency can have large benefits.
- Standardizing equipment purchases might have cost savings.
8. Are there major employee productivity gains through innovation of technology?
- IT quality improvements
- Department productivity improvements through automation
9.
Can certain improvements eliminate waste, bad debt, or lost sales?

- Identify all items that achieve greater profitability
After you finish answering these questions, you should have a good idea about key
initiatives that help the company or are needed to position for the future.
A good manager always looks out into the future six months to a year or more to
anticipate whats coming around the corner. A seasoned CIO is rarely surprised
because he makes it a priority to stay tuned in to whats happening in the company.
Last, you must evaluate where you are today, , , read on.
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C. Identify Where You Are

Lets think about the two sample companies again. If you were able to hover above
them at 30,000 feet, you could barely see they really have very different situations.
Company-A and Company-B have similar revenues, about the same number of clients,
and conduct business in identical industry segments. Thats where the similarities end.
Closer observation as we mentioned earlier points out that Company-B has lower
profitability, has a billing department that manages the same amount of billing activity
with about twice as many people, takes longer to collect its accounts receivable, and an
IT organization that supports multiple technologies running in different cities.
Are you seeing the obvious already?
Its very apparent upon closer inspection that Company-B is starting at
a very different place than Company-A.
Its now obvious that the 12-18 month vision for Company-A should be
different from Company-Bs strategy.
However, consider this. If both companies were at exactly the same starting points (one
technology platform and both were highly automated), , , their IT strategies might still be
quite different.
Yes, thats right. If two companies are exactly the same but have different managers
leading them, the strategic plans will be different. Take a football team and replace only
the coach and you will see very different game plans develop.
Sure, two different coaches may have similar strategies because of the player skills on
the team. Both coaches will take advantage of where their strengths are, but the
strategies in using these assets will invariably be somewhat different.
Here is another example that I point out in my IT Manager Institute class. Lets say we
have 20 IT managers in the room and all of us have exactly the same information that
came out of an IT assessment. Then we list 50 projects from these IT assessment
issues that need to be done, , , so everyone has exactly the same projects to work with.
Then, we ask the 20 managers to prioritize the list of 50 projects.
How many different sets of priorities do you think we will receive, , , even though
everyone is working from exactly the same information?
Thats right, , , we will have 20 different sets of priorities, , , 20 different strategies.
There may be similarities in many, but there will be 20 different approaches to the same
situation if we have 20 managers.
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Lets analyze the two healthcare billing companies a bit further. It might be easier to put
them side by side so you can see the differences. Assume the following exists:
Item
Revenue
# of clients
EBITDA* (Operating income)
# of technologies
# of billing centers
% of billing that is automated
Billing Department expenses
Average days collection time
Company-A
$100 million
600
$12 million (12%)
1
1
70%
$3 million
25 days
Company-B
$100 million
600
$7 million (7%)
3
3
5%
$6 million
60 days
* EBITDA earnings before interest, taxes, depreciation, and amortization
When you place the situation details side by side, the objectives for each company
begin materializing on the page, dont they? It may be more difficult to see for
Company-A, but the needs for Company-B should look like they are in bold print.
Let me help a bit more.
Company-A strategy should include increasing the billing automation from 70% to 90%
and to start focusing on other areas of automation that can eliminate labor costs. These
areas might be in automating the payment process from the insurance carriers or
automating other company functions that can leverage (lower) expenses.
If the company is about to hit a growth stage, Company-A might want to implement a
project that provides online image retrieval to eliminate the cost required to handle and
store paper.
The point is that Company-A is well positioned to address issues
that are not deemed basic requirements for creating a
productive and profitable work environment. Company-A is in a
position to truly refine its business operation.
This company is already running!
Company-B has a much bigger challenge. This company is
barely crawling. Strategy for Company-B has to attack basic
issues that are necessary to have a productive and profitable
business environment.
Electronic billing is key so getting after billing automation is high on the list, but before
you do much of this the company needs to begin assimilating the three technologies
onto a single platform. IT has plenty of challenge here, , , and opportunity!!
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Yes, Company-B has opportunity written all over it. Company-B can get 4-5%
improvement in earnings much easier than Company-A can get an additional 4%. There
is quite a bit of low hanging cost savings fruit at Company-B.
As you look at where we are, you must also revisit your
organizations skills and capabilities, your client needs, and
how well you are positioned to handle normal support. Be
honest with yourself on this one. You wont be doing anyone a
favor by exaggerating your organizations capabilities; it just
sets you up for failure.
If you still have key gaps in the organization, in your
infrastructure, or in the companys business applications, you
may want to include in your strategic plan the project
components that fill the gaps that are critical to accomplishing
your strategic plan. If all of those issues are behind you, great,
but they probably wont be.
In our healthcare company case examples, let me identify the 12-18 month strategic
project initiatives I would probably define for each:
Company-A
- Improve electronic billing to 90%
- Develop electronic payment processes from insurance carriers
- Integrate scanning/imaging technology to eliminate onsite paper storage
- Position the IT organization for acquisition due diligence and assimilations
- Implement an automated report distribution system to reduce paper
Company-B
- Assimilate the 3 technologies to a single platform
- Support the consolidation of three billing departments into one
- Develop electronic billing for 50% of the business
The point we want to show is that Company-B has basic issues that must be addressed.
They are definitely strategic issues but very different than Company-As list. Company-B
is in catch-up mode.
Pressure to move quickly will be higher on the IT staff of Company-B because the
immediate need is greater, , , but the upside is that the company will see more progress
being made quickly by the IT staff in Company-B because many of their IT initiatives will
be quicker to complete and will provide immediate benefit that can be easily seen.

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D. Work Backward or Work Forward?

You shouldnt get hung up on how you proceed in developing a strategic plan. As long
as you define clearly where you want to be and you have a good understanding of
where youre starting from, youll be all right.
We have already accomplished a big part of developing a strategic plan for our sample
billing companies identifying the key initiatives that you need to complete.
There hasnt been any discussion about running this by senior management or what
about cost justification yet. Dont worry, we will get to both of these points.
In all of my publications, I emphasize two points over and over:
1. Insure your plans and objectives are consistent with company needs.
2. Major projects must be cost justified and provide business value.
The logical approach here is to list all of the key projects for each strategy initiative.
Break them down into as many sub-projects as appropriate.
For example, the strategy initiative to add electronic payment processing might be six
big programming projects with your six largest insurance carriers summarized into one
Payment Automation Initiative. This initiative may only achieve a 30% hit rate of all the
payments coming into the company, but its a major benefit to your company. Your plan
should show there are 6 projects in this initiative category of the strategic plan.
When you have a complete list, you will need to organize them into a priority list. I use a
simple method to prioritize my list of projects (remember, you may have 50 or more
projects) by weighting them High, Medium, or Low.
There will be some projects that are required before you work on certain projects in your
list. Identify all projects that have a prerequisite project. Prerequisites can exist due to
resource constraints or you may require an infrastructure component to be put into
place before you can implement a new business application.
At this stage, you just want to start visualizing the major steps required to achieve your
strategic objectives.
Before we get into this too much, the next chapter will give you a short overview of the
steps to develop an IT strategy. Then, Ill come back and we will discuss the details of
organizing your projects into a meaningful IT strategy to present to senior management.
- 23 -
IV. Strategy Development Steps an Overview

Business value is key so Ill define it for you again. This list should literally roll off your
tongue if I were to ask you to define business value.
Business value for a company does one or more of the following:
A. Increase revenue
B. Decrease cost
C. Improve productivity
D. Differentiate the company
E. Improve client satisfaction
Everything you do in your IT organization should do something to provide business
value. If it does not, you are probably working on the wrong things.
In this chapter, I want to provide a high level overview of the steps
that will take you from walking into the front door of a company to
delivering and gaining approval of a strategic IT plan.
There are ten steps:
Step 1 - Conduct an IT assessment
Step 2 - Quantify the business issues
Step 3 - Categorize the issues
Step 4 - Group issues into projects
Step 5 - Develop high level assumptions for each project
Step 6 - Prioritize the projects
Step 7 - Summarize projects into high level initiatives
Step 8 - Draw a picture and develop your presentation materials
Step 9 - Prepare for the presentation
Step 10 - Deliver the presentation

- 24 -
Step 1 - Conduct an IT assessment

Details about how to do this are in the book, IT Assessment: the key to IT success.
When completed, you will have two sets of issues and needs:
A. Business needs and issues
B. IT needs and issues
This information tells you what the demand or need is and what the
supply is, , , I.e., your IT resource capability and capacity.
Step 2 - Quantify the business issues
You may have 150 business needs and issues, , , all legitimate things that IT support
needs to focus on at some point in time. You need to list them.
Once you know what is needed and what you can do, most managers will use some
type of logic to prioritize the work.
Step 3 - Categorize the issues
Put each issue into a category because it will help you prioritize them. The categories I
use are the following:
R
Risk
O
Opportunity
POP
Client Service pop
I
All other issues
Sidebar: A Client Service POP is something you hear from several department
managers that is a nagging issue or something you identify that will create positive
feelings with clients when you address it.
Personal Note: In my last company, the recurring theme among all department
managers was, , , When are we getting e-mail?. It was 1999 and this $100 million
dollar company still did not have an email server, , , key managers used AOL accounts
but most of the employees did not have e-mail.
I identified this as a Client Service POP and made it a high priority which helped my IT
team gain many supporters when we delivered e-mail across the enterprise among
other things that helped our business.
Of the 150 issues you identify, you might have 6 that are Risk, 10 are Opportunities and
4 are Client Service POPs. All 150 items are issues. Risk, Opportunity, and POP issues
tend to be higher priority. The 130 issues remaining are simply issues that need to be
addressed at some point, , , many of these could also be high priority.
- 25 -
Step 4 - Group issues into projects

Group similar issues into logical work related projects. For example,
put several Data Center issues into a group called Data Center
Cleanup Project. When you look at doing work, several issues in a
similar work area can be taken care of in a single project.
Grouping issues into work groups will help you when you get to the
point of assigning people to work on them. Ultimately, key staff
availability will dictate the priority of certain projects.
Dealing with 150 issues is too much detail. Grouping and aggregating
the issues into projects makes it all much easier to work with. For
example, 150 issues might easily boil down into 50 projects or less.
Step 5 - Develop high level assumptions for each project
In developing an IT strategy, you are working at 30,000 feet, , , you are not working at a
detail project planning level at this point. You dont begin work at sea level until the
strategy is presented and approved by senior management.
However, to gain senior management approval you will have to provide a reasonable
amount of information they can digest and evaluate before making a decision. Things
like cost estimate, amount of effort, rough timeframe, and benefits to be derived will be
needed in your presentation.
This information will also help you prioritize the projects. The information you will need
to develop your strategy will be:
Cost estimate
Key resources required
Time estimate
Outside resource needs
Project prerequisites
Key benefits

- 26 -
Step 6 - Prioritize the projects

Using the information you have and your experience, assign a priority to each project. I
like to use a High, Medium, and Low weighting system to help me prioritize projects.
This step is a very subjective process. I cant give you a procedure to follow that will
always lead to the perfect set of project priorities. There is no such thing.
What I can do is provide the logic I use.
In conducting an IT assessment, one of the guidelines to identify business issues that
your IT support organization needs to address is to look for anything that has an IT
support implication in the following areas:
Stability
Supportability
Scalability
Cost
The details of this are in the book, IT Assessment: the key to IT success.
The approach I use is to look at the issues in each project and assign a weighting for
the project in total based upon the issues the project will address. You might have a
project that includes seven issues, , , look at these issues and determine if the project
should be a High, Medium, or Low project for your IT organization to work on.
One of the highest priorities for me will be any project that addresses an issue that is a
Risk and has a Stability implication. The only reason the project containing such an
issue would not be at the top of my priority list is if the cost is just too high for our
company to address it right now. We may just have to take the risk for a while.
Assign a weight to each project and rank them. Ultimately, you wont be able to work on
everything at the same time so you have to find a way to prioritize your 50 projects, or
whatever number you end up with.
The priority formula I use when assigning a High, Medium, or Low weight to
projects is the following:
High risk with stability implications at the very top
(One exception, , , the cost is too much)
High risk, low cost
Client Service POPs with low cost and low effort
Big opportunity with low cost and low effort
Other risk issues
Other opportunity and Client Service POP issues
All other issues that need to be addressed

- 27 -
Step 7 - Summarize projects into high level initiatives

Fifty projects is still too much detail to discuss in a strategy meeting with your senior
managers. You will probably have an hour or so and there is much to talk about. Avoid
your tendency to provide too much detail and pull your presentation up to 30,000 feet.
Summarize your project list into six to eight project initiatives and discuss at the initiative
level. For example, group four or five projects that are Infrastructure related into an
initiative called Infrastructure Upgrade and discuss them at this higher level. Your senior
managers do not need nor want to know all the detail.
Step 8 - Draw a picture and develop your presentation materials
Develop a high level visual of your strategic plan along with background material to use
in your presentation to senior management. Ill give you a sample later in this book.
Step 9 - Prepare for the presentation

Dont even think about delivering your strategy recommendations if you are not
prepared, , , it will be a disaster.
Review your materials to insure they are accurate and will provide the key points to
support your strategy recommendations. Also, anticipate questions and discussion
points so you can be clear and precise when answering them.
Step 10 - Deliver the presentation
Your objective is simple:
Ensure senior management realizes your
recommendations are driven by business need.
Create awareness and understanding of what is in the
plan and quantify the business value results to be
achieved.
Gain agreement and commitment to the plan.
- 28 -
Im a big believer in using visual images to help discuss an issue. Below is a visual
representation of the steps we just went through to develop a strategic IT plan.
It all starts with an IT assessment to determine what the issues are and what your IT
organization can do. The process steps culminate with a high level IT strategy
document you will use to present your strategy recommendations.
In the assessment you learn quite a lot of detail. Getting to a strategy is about
translating and summarizing the detail into a meaningful presentation that makes sense
to your senior management team without losing the substance of the work at hand.
From this point forward, we will assume you have done the assessment work and you
have defined the projects needed to address the business issues you have identified.

- 29 -
V.
Define Key Milestones (Major Projects)
In Chapter III, we identified the major project initiatives for our two sample companies.
We will work with each list and develop an IT strategy for each company.
In addition, an actual strategic plan that I presented to senior management of a similar
company is included in Chapter XV to provide additional insight in developing and
presenting an IT strategy.
Lets start with Company-A.
Company-A is a more mature business with opportunity to refine its operation. The key
initiatives identified earlier are:
- Improve electronic billing from 70% to 90%
- Develop electronic payment processes from insurance carriers
- Integrate scanning/imaging technology to eliminate onsite paper storage
- Position the IT organization for acquisition due diligence and assimilations
Once you determine what the key project initiatives are, you need to break them down
into the major projects that it will take to do the job. Developing the major project list for
Company-A initiatives creates the following:
1.
Improve electronic billing to 90% (20% more)

A. Clearinghouse X interface (Achieves 12%)
B. Payor Y interface (Achieves 6%)
C. Payor Z interface (Achieves 4%)
Note: A clearinghouse is an organization made up of member insurance companies. If there are

50 Insurance Payor members in a clearinghouse, you create electronic payments from up to 50
insurance companies with one programming interface.
2.
Electronic payment initiative

A. Clearinghouse A payment interface (Achieves 18%)
B. Clearinghouse B payment interface (Achieves 11%)
3.
Scanning and imaging initiative
4.
Position IT for acquisition & assimilations
5.
Automated report distribution initiative

A. P&L distribution
B. Revenue reports distribution
Company-A has eight to ten key projects required to complete these five initiatives. We
will discuss how to arrive at these when we look at Company-B.
- 30 -
Major projects for Company-B strategy initiatives

Company-B is a less mature operation and has several basic issues that need to be
addressed. Remember, this company is crawling, , , not running like Company-A.
Because of the lack of automation, multiple technology platforms and the three billing
department operations, this companys strategic projects list is very different
Company-B strategic initiatives identified are:
- Assimilate the 3 technologies to a single platform
- Support the consolidation of three billing departments into one
- Develop electronic billing for 50% of the business
As a manager, dont let the size of the list concern you one way or another. A small list
like Company-B has may be significantly more challenging than an organization that
has a dozen or more key projects to complete.
Often, young managers view having many projects on their list as a sign of larger
responsibility. The real issue is to generate results that have positive impact for the
company. A single project may offer more value and require more effort than a dozen or
more projects.
The next step with Company-B is to break each major initiative into the projects required
to achieve the initiative.
Assimilating 3 technologies to a single technology platform is obviously not one project;
its two projects. Most likely, you will not do these projects at the same time. Each of the
technologies to be assimilated will have unique issues, such as:
- Database differences
- Different support approaches (company owned support
organizations or outside vendors)
- Hardware and network platforms
- Different business applications capabilities, potentially
critical for keeping a large client
The second initiative is to support the consolidation of the billing
departments into one. This goes hand in hand with the
consolidation of the technology platforms into one platform, , , the technology needs to
be in place first.
Once the billing department begins merging their three organizations into one, there will
be IT support requirements such as office relocations, moving people, etc. The IT
organization must work closely with the billing department managers to know what to
expect and to support this activity effectively. This may be several projects staged at
different intervals. For our purpose, we assume it is two relocation projects.
- 31 -
The third initiative is to develop electronic billing to achieve 50% automation. This will
likely be more than one project and may take a year or more to complete all of them.
Insurance companies (Payors) have different electronic billing requirements so several
interface programs will need to be written.
The company might be able to use a billing clearinghouse to facilitate electronic billing
for dozens of insurance payors, , , I.e., one interface program delivers electronic bills to
many Insurance Payors through the clearinghouse. If so, Company-B will want to
develop these interfaces first to leverage their efforts and go faster. In our example, we
assume there are 5 programming projects required to achieve 50% billing automation.
And finally, implementing a company automated report distribution project will be a
project just like the one identified for Company-A. It will consist of two components. We
will implement a tool to automate the distribution of month-end Profit and Loss
Statements (P&Ls) to department heads and a separate project to distribute billing
revenue reports to the billing managers.
This initiative will eliminate printing, handling, and distribution of targeted paper reports
and will benefit the company quite a bit by improving productivity and reducing cost.
Managers will receive their reports automatically with an e-mail attachment.
Lets summarize the projects for Company-B:
1. Technology assimilation initiative
A. Technology #1 conversion
B. Technology #2 conversion
2. Support billing department consolidation
A. Merge billing operation #1
B. Merge billing operation #2
3. Billing automation initiative (Total objective 50% automation)
A. Clearinghouse #1 (70 Payors achieving 22% of billing)
B. Clearinghouse #2 (35 Payors achieving 12% of billing)
C. Major Payor A (Achieves 6% of billing)
D. Major Payor B (Achieves 6% of billing)
E. Major Payor C (Achieves 4% of billing)
4. Automated report distribution initiative
A. P&L distribution
As you look at the list you can see that there are four major initiatives consisting of 11
key projects. As you work to define your specific strategy steps, you may discover there
are more projects to include.
- 32 -
VI. Identify Prerequisites

In order to determine the appropriate priority for each key project, there are many
variables to consider, , , things like:
- Risk and opportunity
- Employee availability to work on the project
- Cost
- Other projects that must be completed first
Often there are things that must be completed before you
can start a project, , , they are called prerequisites. You
need to identify any prerequisites for each key project in
your list as they can force the structure and timing of when
you do things within your strategy.
Projects will often compete for the same resources. These resources might be dollars,
IT staff, client/department knowledge expert involvement, etc. A project can also be
dependent upon other projects being completed before you can focus on it. Needless to
say, there are many issues that can potentially become a prerequisite for a project.
Its also safe to say that as you quantify prerequisites for your major projects, you might
identify more project work, costs, and staff requirements.
Lets look at Company-A prerequisites
The prerequisites I identify for each of the major project initiatives in Company-A are:
Increase Electronic Billing to 90% initiative
- Negotiate contracts with Clearinghouse X and targeted Payors
Electronic Payment initiative
- Negotiate a contract with the two Clearinghouses
- Purchase scanning equipment and software
- Upgrade the network infrastructure to support additional volumes
Position the IT organization for acquisitions and assimilations
- Hire additional staff to work on technology conversions
- Train new staff
- Purchase software license and any equipment required
- Train 2 IT technical resources on use and setup of the software
- 33 -
Lets identify Company-B prerequisites.

The Technology assimilation initiative for Company-B has several prerequisites. Have
you already started listing them? Here is a short list of prerequisites you should look for
when you prepare to convert technology to a different platform.
A good starting list is:
- Upgrade key application servers to handle additional data volumes
- Upgrade software licenses as needed to support additional users
- Upgrade network to support additional users
- Identify technical and department resources to work on assimilation projects
From this list, two new projects just materialized:
- Upgrading the key application servers
- Upgrading the network for the additional data and user connections
Both of these prerequisites are actually projects and require time, money, and
resources to complete. The specifics of these things contribute to how much effort the
technology assimilation initiative will take and how much it will cost.
We just added two more projects to the key projects list for Company-B.
The point is that identifying key project prerequisites gives you additional information
that will help, , , or possibly even force the timing of when you do certain things.
The Billing automation initiative has a prerequisite as well. For example, before you do
work with a claims clearinghouse, you must have a firm contract. Getting this done may
take some time so plan on the lead time to get it accomplished.
Remember, this is just a quick example so you can see how to develop a strategy, , , I
make some assumptions and it is not necessarily comprehensive, , , just an example.
Let me explain a bit more. When we get to Chapter X Draw the Strategic Plan
Overview, we will not show the Billing automation initiative prerequisite about getting a
contract signed with the Clearinghouse, , , it isnt necessary for our strategy
presentation. However, it is very important to know that the lead time to complete a
contract might have a bearing on when you can start the project.
The bottom line is that you need to know if there are any prerequisites for any of the key
projects you plan to put into your IT strategy.
- 34 -
Let me give you another example of something that can force the timing of a project.
This isnt a prerequisite but it will help you see that there are many factors that dictate
when you can do things, , , and all of these issues lead to the definition of your strategy
and the timing of events.
Lets assume you are Company-B and have three
billing technologies due to company acquisitions and
two of these duplicate systems need to be eliminated
so users can be on the same technology platform. The
timing of when you eliminate one technology versus
the other can be influenced by the software license.
Also assume that to discontinue either software license
you must give the external vendors a 90-day notice, , ,
otherwise the software automatically renews on its
annual anniversary date.
If you must give a vendor their 90-day notice in the next 30 days due to the anniversary
date of the license, you may not have enough time to complete the conversion in the
timeframe you would have before the license goes away. On the other hand, if you have
180 days before you need to give the vendor their 90-day termination notice, you have
plenty of time to complete a software conversion project.
Granted, there are more variables, , , you might be able to get a short term software
license extension or negotiate something with the vendor that gives you more time.
Stability of each software application, cost to support the software, and functionality also
plays a part when you evaluate which software conversion project to do first.
The point is that even the software license anniversary date can influence the timing of
when you start the conversion project.
What you should be gaining an appreciation for is prerequisites and other variables can
have a major impact and influence on when you do things. This is why you must
spend time to understand the dynamics of the projects within each strategy initiative.
Hopefully, this helps you better understand the process that will lead you to the creation
of your strategic plan.

- 35 -
Lets summarize the prerequisites Ive identified for Company-B project initiatives:
Assimilate the 3 technologies to a single platform
- Upgrade key application servers to handle additional volumes
- Upgrade software licenses as needed to support additional users
- Upgrade network to support additional users
- Identify technical and department resources to work on assimilation projects
Support the consolidation of three billing departments into one
- Identify billing department consolidation plans
- Convert billing technology applications
- Identify and take care of user relocation preparation tasks
- Order and install new equipment as needed
Develop electronic billing for 50% of the business
- Establish contracts with clearinghouses and identified Insurance Payors
- Identify programming, business analyst to work on the projects
- Identify billing department knowledge expert resource to work on the projects
Implement an automated report distribution system to reduce paper
- Purchase software license
- Purchase and installation of a new server for the companys network
- Train 2 IT technical resources
We now know the strategic initiatives, the major projects required to achieve each
initiative, and the key prerequisites for each major project. We are well on our way
toward mapping out an IT strategy for each of our sample companies.

- 36 -
VII. Quantify Needs for Each Strategic Project

The next step is to estimate requirements for each project in terms of:
- Staff
- Budget
- Other resources
Ultimately, you will have the opportunity to present your strategy to your senior
management team. When you do, a major question that will come up is, , ,
There are two choices you have in how to approach this issue. The personality of your
senior management team and your particular comfort level in dealing with cost justifying
your recommendations will determine which method you will probably use.
To most executives, its preferable to look at the entire strategy and to gain a feeling for
the entire cost as it relates to the overall benefits of your strategic plan.
Some executives prefer to look at each individual project and to cost justify each project
on its own merits. I call this cherry picking. This approach can work, but I will tell you
that it is much more difficult and in most cases does not work very well.
I highly recommend you try to keep the discussion of cost at a level for the entire
strategy, , , not at a more detail level of discussing the cost of each project.
Here is why. When you deliver an IT strategy, you have not yet developed detail project
plans unless your senior management team requires you to work at this level in order to
review your recommendations, , , and most will not.
Delivering an IT strategy is more of making recommendations about what you think your
IT organization should work on based upon your assessment of the business and
technology resources of the company. It is much more of communicating
your vision and roughly what it will cost and the effort required.
An IT strategy recommendation is a high level discussion, , , 30,000 feet.
Once the strategy is approved, , , then you move into detail project
planning mode.

- 37 -
This does not mean you can simply guess the cost of the entire strategy. In order to
have reasonable knowledge about your IT strategy cost, you will have to estimate each
of the key projects in your strategy to some extent.
An estimate takes a few minutes, , , not hours to identify every single cost item and gain
the specifics. That would be a waste of time at this point unless your senior managers
require precise project cost estimates when you present your strategy.
When senior management finally sees your strategic plan, it really should be no
surprise. It should be a confirmation of what they have been hearing from you in bits
and pieces but now presented in a manner that pulls it all together.
Lets look at one of our sample companies and estimate the staff, budget, and other
resources required for each project. Ill do this for Company-A, , , no need to show you
the same thing for both companies.
A. Staff
As you look at staffing requirements, you need to assume a project manager is
assigned to each project to insure the project is completed on time and within budget.
The project manager function can often be handled by one of the project team
members. In many of the project initiatives for Company-A, you will see that I assume
the project management (PM) function is handled by a business analyst.
Also, a project manager might be able to handle more than one project depending upon
his skill and the size and scope of the projects. If a project manager is leading multiple
projects, it is worth estimating a percentage of his cost for each of his projects.
Remember, you want to develop a staffing estimate in just a few minutes to reach a
reasonable cost estimate for staffing the projects. We may not yet know who will
actually work on the projects or specific dates but we can estimate the cost and length
of time the resources will work on the projects to arrive at an estimated staffing cost.
Do not spend hours of time to do this, , , a
reasonable estimate is what is needed. You may
have to fight your tendency to be precise and
accurate. Until the strategy is approved, you do not
want to spend lots of time to be precise.
After your strategy is approved, then you will
assign people responsibility to develop detail
project plans for each of your key projects.

- 38 -
Lets take a look at staff required to implement the key project initiatives for Company-A.
Company-A staff requirements
1. Improve electronic billing to 90%
- 1 business analyst (PM, design, and quality assurance (QA))
- 1 senior programmer
- 1 Billing Department billing specialist
2.
Electronic payment initiative

- 1 business analyst (PM, design, and QA)
- 1 Billing Department payment specialist
3.

- 1 project manager
- 2 programmers
- 1 business analyst
- Department leaders to define requirements and for QA
- 1 senior network infrastructure specialist
4.
Position IT for acquisition & assimilations

- CIO or designated senior IT manager to take responsibility
- 1 business analyst
- 1 business applications trainer
Note: These resources may not be needed until an acquisition occurs and
you are actually going to assimilate the acquired companys technology.
5.

- 1 business analyst (PM, design, and QA)
If you can, identify specific people by name who will be needed for each project. The
reason is that people availability can influence, even dictate the timing of when you work
on certain projects.
A key challenge you have in creating an IT strategy is to develop the timeline for your
strategy initiative projects and organize them in a way that it all works, , , staffing
availability is usually a constraint that you have to play around with.

- 39 -
B. Budget
Staffing is usually the largest cost of a project so thats why we focused on it first.
When looking at the rest of a project budget, senior management typically wants to
know the following for the total IT strategy:
- Capital cost (one-time purchases of equipment, software, etc.)
- Project costs
- Ongoing incremental operational costs after the project
- Timing of major cash expenditures
- Completion timeframe
- Savings and timing of the savings
- Payback timeframe (Return on Investment timeframe)
- Risks
In order to be fully prepared, develop a summary spreadsheet that shows each projects
estimated costs and a total for the entire plan.
Senior management may ask about possibilities of eliminating certain parts of your
strategic plan. Developing this spreadsheet can help you gain a better understanding of
each component of your strategy and appreciation of the dependencies and
interconnection of the projects.
A sample Budget Summary for Company-A projects is shown below. A blank form is
included in the Appendix.
Project
Billing automation
Clearinghouse X
Payor Y
Payor Z
Payment automation
Clearinghouse A
Clearinghouse B
Company-A
IT Strategy Projects Budget Summary
Project Cost
Ongoing Ops Cost
Capital Cost
$120,000
$0
$0
$40,000
$40,000
$40,000
$0
$0
$0
$90,000
$0
$60,000
$30,000
$0
$0
$0
ROI
8 months
average
8 months
8 months
8 months
$0
$0
6 months
average
6 months
6 months
$0
$0
$0
Scanning & imaging
$180,000
$2,000/month
$200,000
15 months
Report distribution
$30,000
$500/month
$80,000
12 months
Position for acquisition
$0
$0
$0
na
TOTAL
$420,000
$2,500/month
$280,000

- 40 -
C. Other Resources
I mentioned earlier that many things influence the timing of when you work on a project.
As you get closer to the part of putting the project timelines together to structure your
strategy, you need to think through all kinds of variables.
Anticipate any significant requirements of each project, especially if there is a tangible
cost associated with it, , , things like:
- Outside contractors
- Part-time or temporary staff resources
- Administrative help (internal and external)
- Legal assistance
- Senior management involvement
- Department knowledge expert resources
- Facility needs
- Systems needs
- Software license upgrades
- Human Resources
- Vendor resources
- Supplies
- Travel
- Training
- Contract terms, especially termination notice requirements

- 41 -
VIII.
Identify the Critical Path
Whats the shortest distance between two points?

In the technology world, it may not be a straight line.
Senior management wants the strategy accomplished as quickly as possible, as
inexpensively as you can, and with no risk once they have signed up for it.
We have just identified three needs of senior management that conflict with each other.
Going faster usually introduces higher risk and cost. Going slower usually has higher
cost and longer payback time. Cutting cost potentially adds risk.
You want to achieve a balance. Seasoned senior managers would usually prefer a little
more cost if it mitigates significant risk or allows a project offering significant business
value to move faster. There are no hard and fast rules here. Much depends upon the
personality of your senior management team, especially the CEO and CFO.
Considerations of the business needs, competitive pressures, and other outside forces
also have to be taken into consideration.
As you start developing the critical path, youre looking for the optimal way to organize
all of your projects that youve identified into an overall plan that allows your strategy to
be completed with some assurance.
In other words, you want to recommend a plan you are fairly certain you can deliver, , ,
and deliver it on time and within budget.
Wait just a minute!, you say. We havent done any real detail project planning work
yet, , , how can we be confident we can deliver the strategy on time and within budget?
Thats a great point.

- 42 -
When you recommend your strategy, the timing you talk about is not in precise months.
It is more of an estimated time to complete key project initiative, , , like 6 to 9 months.
Its an estimate, not an exact timeframe, , , remember, , , we are still at 30,000 feet.
Same thing with budget. Maybe your total strategy is a $1.2 to $1.5 million dollar
strategy. You will get more precise when you do the detail project planning work.
Most senior managers are comfortable with rough estimates when they first hear an IT
strategy recommendation, , , you are still in concept mode and trying to validate that
what you propose is an appropriate set of projects to work on to support the business.
Once everyone agrees you are on the right track and that your strategy is appropriate
for the business your team can develop the detail plans. Senior management will tell
you if they need more precise information in order to approve the recommendations you
make. In my experience, most will probably agree with your recommendation.
Prerequisites, key resource dependencies, availability of cash, and other challenges
have to be taken into consideration as you determine an appropriate path.
An approach that can help you determine the critical path of several projects is to
develop a visual Project Dependencies matrix of all the projects in your strategy.
Beside each project name, identify other projects or prerequisite issues. List the dollar
requirements and the resource requirements as well.
Here is an example using Company-A projects:
Company-A
IT Strategy Project Dependencies
Project
Prerequisites
Billing automation
Clearinghouse X
Payor Y
Payor Z
Contract
Contract
Contract
Payment automation
Clearinghouse A
Clearinghouse B
Contract
Contract
Scanning & imaging
Other Project
Dependencies
Key Resources
Required
Chouse X
Chouse X
Bob Smith
Bob Smith
Bob Smith
Chouse A
Nancy Jones
Nancy Jones
Software
Server
Scanners
Juke box drives
Network upgrade
Report distribution
Position for acquisition
Cost
$120,000
$90,000
Bill Anderson
Jane Bell
$380,000
Bill Anderson
$110,000
TBD

- 43 -
Being able to see a high level of each projects issues can help you develop a first cut of
the timeline you think the projects can take.
After listing the project variables in the matrix, you can go back through the project list
and place each one into a timing phase and organize the projects into logical groups.
Im sure this is probably clear as mud. Lets step through an example by looking at
three parts of the strategic initiative projects we identified for Company-B, and in the
next chapter we will develop a timeline.
Company-B critical path
1. Technology assimilations initiative
A. Technology 1
B. Technology 2
C. Technology 3 (assumes the company acquires another company)
rd
Note: I added a 3 Technology assimilation project to show you how you might include a
project that doesnt exist yet. Putting this in the IT strategy helps senior management
visualize future activity and know you are considering it.
2.
Billing automation initiative

A. Clearinghouse #1
B. Clearinghouse #2
C. Major Payor A
D. Major Payor B
E. Major Payor C
3. Automated report distribution initiative

A. P&L distribution
A few assumptions have to be made in order to develop a critical path. We will assume
that separate technical resources are available to work on each of the three groups of
projects, but the same team has to work on all projects within a group.
In other words, the Technology assimilations initiative is not dependant upon either of
the other two initiatives, but both of the assimilation projects have to be worked on
sequentially because the same team will implement each project within this group.
This is also why I showed the 3rd Technology assimilation project. The IT organization is
not positioned to assimilate a new company acquisition until the current two projects are
completed unless we staff another team. Including a 3rd project if we acquire another
company shows senior management when IT is positioned to support another merger.

- 44 -
Another assumption we will make is that the company has the money and can afford the
to spend the money whenever IT needs it. In the real world, you might have to stage
certain high dollar projects and start them when the dollars are available.
We also assumed that none of the project initiative groups on Company-Bs list is a
prerequisite for any of the other initiatives.
So, for our Company-B example, we assume that we can begin all three initiative
project groups at the same time because separate teams will work on them and none of
the project groups are prerequisite to the others.
The critical path of our strategic plan for Company-B will be the path for each individual
initiative group of projects. This turns out to be a pretty simple strategic plan as you
might expect but should help you follow the process in creating a timeline.
We will map these projects onto a timeline estimate in the next chapter. Hopefully, you
can see that if a project is a prerequisite for another project or if there are personnel
dependencies to start a project, you adjust the projects timeline to work within the
constraints you have.
You will probably have to play with the timelines to get all your projects to work out so
start with a rough draft and fine tune it as you go.
What I usually do is create a simple spreadsheet and list the projects in the first row and
include 24 monthly columns or whatever number you think you need for the work you
will be doing.
Then, start blocking out the cells for each of your projects based upon their estimated
length of time to complete and their start dates based upon prerequisites and other
considerations.
Here is a quick example. We will do this specifically for our two sample companies in
the next chapter.
Project
IT Strategy Project Timelines

1
10
11
12
13
14
15
Proj-A
Proj-B
Proj-C
Proj-D

- 45 -
16
17
18
19
20
IX.
Define Project Timeframes
Keep it simple. Go through your list of projects and define a logical timeframe that you
should be able to work on each project. My approach has always been to break time
down into 3-month or 6-month phases, depending upon how far out youre planning for.
Lets look a bit closer. For a 24-month period of time, you can break the time into eight
3-month segments. Another note is that when you develop a strategic plan, let the
projects dictate the timeframe rather than creating a timeframe.
What I mean by this is the time required to complete the projects becomes the strategy
timeframe, , , dont take 24 months and try to force fit everything into an artificial
timeframe. Force fitting projects into a desired timeframe only sets you up for failure.
As we look at the phases for a 24-month timeframe window shown above, we know in
the back of our minds that when we complete filling in the projects we need to do for our
strategy, the overall timeframe may extend out several months or shrink.
Company-B estimated project timeframes
As we look at the projects Company-B is going to pursue, we decided earlier that there
are no real dependencies other than projects in the same initiative group have to be
performed one at a time. We also stated that work in all three initiative groups can take
place at the same time since there are no real conflicts to prevent it.
One simple approach is to take each major project and estimate the length of time it will
take to complete the project. Place the first project of an initiative group into a starting
slot or phase of your timeline. Build in some buffer to insure its completed on time and
then add the second project to begin immediately behind it.
- 46 -
Always build a bit of time and budget buffer into your plan.
There is a golden rule in managing an IT organization:
Things can go wrong and there will be surprises to come up along the way. To create a
track record of always meeting your plan, you have to build in time and budget buffer for
contingencies that are ultimately needed.
Because we are at 30,000 feet as we prepare an IT strategy, you may want to include
even more buffer. Even so, do enough work to develop reasonable time and budget
estimates. To estimate a 3-month project to take 8 months is just as bad as estimating
you can do it in 1 month.
In the Company-B example, we will make some assumptions and estimate the time
required for each project type within a strategic initiative group as follows.
Here is what I would estimate Company-B projects to take:
- Assimilate a technology -- 4 months
(Some will go faster and some may take longer depending upon how much has to be done.)
- Develop a billing interface program with a 3rd party -- 3 months
- Automated report distribution project -- 2 months
At this point, we are just trying to identify general estimates of
time so we know how long to schedule a project on a
timeline. If you have more specific insights, you should take it
into consideration when plotting the time.

- 47 -
Plotting the timelines for Company-B projects in a perfect world would look something
like the following:
Wow, were going to achieve all of this in 15 months!!

Not so fast.
Yes, in a perfect world where a project that should take 3 months
actually does take 3 months, you would complete your strategic plan
in 15 months.
The problem is we dont live in a perfect world. Things happen and
when you encounter a surprise in IT, it always seems to require more
time, more money, , , or both.
Also, there is no automation already developed for Company-B, so you are going to go
slower in your first project due to learning curves.
Because we know there is no perfect world, you better have some room for problems
and surprises that are bound to occur. Experience will show that reaching an objective
on or before the expected date is usually not a problem. Arriving consistently late is
definitely going to be a problem.
- 48 -
So, my recommendation for our working example is to build room for the unexpected
problems that will occur. Based upon what we have defined for Company-B, my project
timelines would be adjusted by adding buffer as shown below:
Preliminary Timeline for Compan y-B
with buffer built in
3 months
6 months
9 months
Technology 1
CH #1
RA #1
12 months 15 months 18 months 21 months 24 months
Technology 2
CH #2
RA #2
Payor A
5
Technology 3
Payor B
Technology Assimilations
Initiative
Payor C
Billing Automation
Initiative
Automated Report Distribution

Initiative
As you can see, I extended the timeframe for the projects in every group.
In the Technology Assimilations Group, I allocated extra time for the first project
because this will be the first assimilation project for our staff and there is a learning
curve that we need to think about. I also extended the two later projects by a third in
case we have unexpected challenges.
Part of this is just from my experience in assimilating technologies. At this point when
you really dont know what the specific programming issues will be for each of the
technology assimilations, its better to add buffer to be safe than to set everyones
expectations on an aggressive assimilation program you might not be able to meet.
With the Report Distribution Initiative, I make an assumption that after we complete the
first project, the second one will go pretty quickly. Again, I built in some learning curve
time in the first project.
With this simple timeline graphic, you can see how all the projects and the major
initiatives line up. This will make it much easier for senior managers to understand
and visualize when you present your strategy.
- 49 -
A big part of estimating project timeframes and budgets is based upon your experience.
Its as much an art as it is a science. If you have considerable experience with a
particular type of project and the team that will do the work, you can be more aggressive
in your estimations.
What I mean by more aggressive is that you can be more precise and probably dont
need to buffer your estimates as much.
If you dont have a lot of experience, you better allow plenty of room.
Thats not to say you should go overboard when adding buffer to your estimates. You
need to be reasonable as I mentioned before.
The other thing I should say to this is that if you estimate a project to be six months and
discover you can do it in four months, , , then you should manage the project in a way to
complete it in four months.
If you dont have the experience in a particular project, seek out information from other
senior IT managers or outside your company with CIOs who have successfully
accomplished similar projects, , , take advantage of their experience and knowledge.
Another way is to spend additional time in working with your team to analyze a project in
order to come up with a reasonable work estimate.
We will put Company-As timeline together in the next chapter.

- 50 -
X.
Draw the Strategic Plan Overview
Its time to put your plan on paper. My preference and recommendation is to create a
picture. Everyone says, A picture is worth a thousand words. Its especially true when
you present an IT strategy to a senior management team.
Many of your senior management team members are probably not very technically
oriented. Some of the concepts you talk about may not be easily understood by many of
them, and the better your presentation is understood the more likely it will be endorsed.
As you build your strategic picture, always remember to net it out, , , keep it short and
to the point, , , executives want bullet points, not paragraphs. While the main
presentation is kept at a high level and to the point, nothing says you cant or shouldnt
have detailed backup available to use if needed.
- 51 -
A lot depends upon your audience. Some CEOs and CFOs want more detail than
others, but most arent very technical. On the other hand, your senior manager may be
the CIO of your company and want considerably more detail, , , and he might have a
strong technical background.
The approach you take and the amount of detail you include depends upon the
personality of your particular senior management team. Invest some time to get to know
what they like to see and try to accommodate their needs.
Lets assume your IT strategy presentation will be to the CEO and CFO.
Before you start putting your strategy on paper, step back a second and put yourself in
your CEOs shoes. Most CEOs have a consistent set of needs that goes like this:
- Give me the answer.
- Dont provide too much detail.
- What are the major benefits?
- How much does it cost?
- What are the risks?
- If we dont do this, what are the implications?
Lean toward a short and concise presentation and have sufficient detail to back up your
points, and you should do well.
A big mistake can be made if you assume your senior managers need lots of detail. If
you arent sure, I would probably err on being too brief than to provide too much detail.
Personal note: Early in my management career I made a
presentation to my CEO and the President of our company
where I recommended a network upgrade to support our
growing business. It was unfortunate that I fed the CEO lots of
technical information.
He quickly showed signs of being in a bit of pain. Being astute
and quick to respond I concluded I wasnt giving him enough
detail, , , so I laid on more detail.
After a few minutes my CEO stops me, leans over to the President of our company and
says, Get with Mike and just tell me what we need to do.
My poor CEO was in real pain because I was giving him pain with all the technology
detail. This was a very valuable lesson early in my career.
Most CEOs just want the answer, , , they will ask you questions if they need more
information from you.
- 52 -
The main thing about delivering an effective strategy presentation is to be prepared.

Drawing a picture for your audience will smooth the way as it will help everyone
visualize your points more easily and understand how components fit together.
So, lets draw the pictures for our two example companies. We have almost completed
it for Company-B. We only need to polish it up a bit.
As you look at the final presentation graphic for Company-B, notice that I tweaked the
timing of the projects a bit more. I overlap the start of some projects as we gear up
while the preceding project is winding down.
Another piece to notice is that we show 6-month segments in the image rather than the
3-month segments we showed earlier. It helps you better understand the dynamics of
your projects to look at the lower level of detail, but when you present to your CEO you
want to keep it at a high level unless you know he wants the detail.
The simpler you can make it the better.

- 53 -
One final part I recommend is to label your projects A1, A2, A3, etc. as you see in the
timeline image.
You can also color code the labels to help differentiate the projects for each initiative
group. When you develop a more complex presentation, it helps when youre discussing
the projects to be able to focus the discussion to a specific part of the plan.
There are dozens of ways to approach a presentation and be effective. This is just one
method I have used successfully for many years.
You may also want to include a Summary Benefits and Cost Estimates section with
your timeline. I dont always do this but it can definitely be helpful. Including the number
of months it takes to pay for the project and the key benefits provides senior managers
additional information to assess whether your strategy is worth going after.
Below is a sample of what this would look like for three of Company-As initiatives.
IT Strategy
Summary Benefits and Cost Estimates
Estimated
Cost
Initiative
Major Benefits
ROI
A. Technology assimilations
$460,000
- Standard operations
- IT savings - $70k/mo
- Positions consolidation of
Billing Dept.
B. Billing automation
$170,000
- Reduce Billing Dept. cost by

$2.2 million annually
- Improve cash flow by 30 days
14 months
$110,000
- Saves $1500/month in FEDEX

& postage expenses
- Streamlines operations for
growth
- Positions company for new
client sales via software
feature enhancement
20 months
C. Automated report distribution
Total cost
$740,000

- 54 -
18 months
Below is a sample strategic plan timeline for Company-A. In this one I assume the
continuation of the Billing automation initiative will begin after we complete the two
Electronic payment initiative projects. The most likely reason to do this would be one of
the following:
- The Electronic payment initiative projects deliver more cost savings
- The same programming resource is needed for both sets of projects
Summary Benefits and Cost Estimates - Company-A Example

Initiative
Estimated Cost

- 55 -
Major Benefits
Once you complete a high level picture of your strategic plan, assemble all of your
materials and prepare for the presentation.
The next chapter titled Present the Plan will go into objectives of the presentation. For
now, you need to finalize your preparation for the meeting.
Three things you should do to prepare for your strategy meeting are:
1. Revisit your strategic picture and verify you have all the key issues covered.
Recall your assessment interviews with senior management and department
managers and ask yourself, Have I included all of major issues and needs
that take care of todays challenges and position the company for the future?
If not, you can still add components you think will come up in the meeting.
2. Prepare enough detail on each individual project that can back up your
numbers (cost, benefits, and timing assumptions). You dont have to be exact
at this point, but you do need to have reasonable estimates and justification.
Think about the questions for each major project initiative you would ask if
you were the CEO or CFO and had to pay for the project. Questions like:
- Are the benefits worth the cost?
- What is the business value for this project?
- Should we implement this project at this time?
- Are there additional issues we should have IT focus on?
- Is there downside or risk by not doing this project or initiative?
The handout information you should consider using includes:
- Strategic Plan Overview (your 30,000-foot picture)
- Project summaries that include more detail cost and savings
estimates.
(Note: you will see samples of both of these items in the next chapter.)
3. Develop an opening presentation and key discussion points to help you
deliver a concise and professional presentation. You may only have an hour.
Keep your presentation net and to the point. Having a presentation guide
handy will help you be at ease and better prepared. It also helps you pull the
group back into focus as needed when the meeting tends to move into
problem solving discussions rather than focusing on the strategy.
The purpose of your meeting is not to solve each challenge in the meeting.
Instead, it is to present to management your recommendations of where you
think the IT organization should be focused to support the company.
I promise, you will not solve your company challenges in this meeting!
- 56 -
XI. Present the Plan

Here comes the fun part. You may not think so but assuming you have done your
homework and you have developed a logical, benefit oriented vision for IT support, , ,
your presentation should go fine.
The first rule as you go into this meeting is this: If your senior managers do not agree
with your recommendations, its ok. Dont take it personal.
Your job is to assess your company situation and make a recommendation to senior
management as to how you think IT should be focused to support the company.
Senior management has the right and obligation to challenge you, question your
recommendations, , , even to disagree with you. After all, they have to decide if this is
the best place to spend their IT investment.
At the end of the day, everyone is on the same team and we all want the company to
succeed, , , so one more time, , ,
If you have kept close contact with these managers and have made it your business to
understand their needs and issues, you should have no problem in presenting your
perspective in solving them.
Ive always found it easier to manage other manager expectations when Im leading the
conversations versus when they are asking me to provide input on their problem. For
this reason, I urge you to be proactive and schedule this IT strategy meeting as soon as
you can, but not before youre ready.
If you go into a strategy meeting that you scheduled with a good handle on what the
major challenges are and you have a strategic initiative to address each of them, , , with
business value benefits identified, , , with estimated costs, , , and with an approximate
timing of execution - - - - believe me, you are in the drivers seat.
Most of your counterparts are not this proactive. Most IT managers deliver strategic
plans only when requested of them. No way are you in charge when senior
management asks you to develop a strategic plan.

- 57 -
There are essentially 4 things you want to achieve in an IT strategy meeting:

1. Establish the objectives of your strategic plan.
2. Define a high level return on investment and key benefits of the plan.
3. Validate with the management team that the plan is appropriate.
4. Create awareness concerning size, complexity, cost, resource commitments,
or other pertinent issues required to execute the plan.
Oh yeah, , , one more key goal for this meeting is very important:
5. Get a commitment to support and fund your strategy.
Now, you might not get this last one if a senior manager has
concerns or disagrees with part of your strategy. Remember,
your job is to put a stake in the ground, , , senior
management has the right to move the stake.
Lets review one more time: The purpose of a strategic plan
meeting is not to try and solve the companys challenges in a
meeting. It is your opportunity to validate with senior
management that you have identified the appropriate
challenges of the company and have developed a reasonable
strategy to address them.
If you let the discussions wander off into solving scenarios, you lose the purpose of the
meeting and you wont achieve any of your objectives.
As you begin your presentation, let the participants know that you have more detail
available for them if they want it after the meeting. Do not let them push you down into
the detail in this first session; you wont get the big picture discussed.
Also, rehearse the flow of the meeting and prepare a simple opening statement to get
you started smoothly. Be sure to include the key benefits for doing this plan.
It will be the benefits that sell your recommendation.

I would also suggest you develop an agenda to hand out that identifies each major
point you plan to discuss and follow it just as you would any presentation.

- 58 -
A. Objectives
The primary objectives of a strategy meeting are more than providing management with
the project initiatives you plan to execute and the benefits in doing them.
Much more.
A list of objectives that are not project specific include:
- Create awareness of the major initiatives.
- Gain validation from the senior management team that your
plan is appropriate or input that tells you how it should be
adjusted.
- Create awareness of the dependencies of certain initiatives
on resources or completion of other initiative projects.
- Create awareness of the size and complexity of the plan.
- Gain agreement on the plan.
You do not want to leave the meeting without getting one of two things:
1. Commitment to support and fund the strategy
2. Direction on what you need to change or what is needed for them to approve
your strategy, , , and a follow-up meeting date
You may not get full approval, , , if you do not, be sure you get specific direction on what
is needed to get there and a commitment that you will receive an endorsement when
you fulfill their need.
In your opening statement, tell your management team the objectives of the meeting.
You can use a few bullets below to position the five objectives we mentioned:
Our meeting is to discuss my IT strategy recommendation. It was developed
upon completing a business assessment of our companys business units to
identify their business needs and issues and the IT support organization to
determine our capability and capacity to support these needs.
As we go through the plan, there are several objectives I want to achieve.
- Identify major IT support initiatives and their benefits
- Validate the initiatives with you that they are appropriate
- Identify key dependencies
- Create awareness of the size and complexity of this strategy
- Gain agreement to go forward which means two things:
a) You support it.
b) You will fund it.
Are there any questions up to this point?
- 59 -
OK, , , the opening statement is over, , , time to lay out your strategic plan.
Hand out the materials. You should have two sets of materials identified earlier, but you
havent seen an actual document for either yet, , , hang on, you will soon :
1. Strategy diagram or the timeline picture you created
2. Strategic Initiatives Summary with key bullet points for each initiative
Now, , , you have two options in passing out materials at the beginning of your meeting.
Ive done both and it is hard to know which method will work best, so let me explain.
The first option is to pass out both documents and briefly explain what each document
is. Then, focus on the strategy diagram, , , they will follow a visual much better.
The second option is to pass out only the strategy diagram document and hold the
Strategic Initiatives Summary document with bullet points until the end of the meeting.
There are pros and cons in both approaches.
When you pass out both documents early, some managers like to read ahead and can
miss key points you make. On the other hand, the bullet point list is good to follow along
with and a great place to take notes.
When you pass out just the strategy diagram, you keep everyone focused on this
document fairly easily, but they arent able to read the bullet points or take notes in the
handout sections as you discuss them.
My recommendation is to pass out both documents.
Another point in this regard. You probably have an hour for the meeting. You have to
control the meeting and keep everyone focused. Otherwise, you wont get through your
agenda. Plan your meeting and anticipate how much time you have, , , dont try to cram
too much material and discussion into one hour. Remember my point about buffer?
Instead, think about delivering your presentation in 20-30 minutes, , , the rest of your
hour will be absorbed fully with questions and discussion, , , guaranteed.
One more thing about controlling the meeting. Some managers take discussions out to
tangent land and waste valuable time. Dont let this happen. Be professional and
courteous but suggest, Please hold your questions and discussion until after the
presentation so everyone can view the overall strategy first. Many questions will be
answered in the presentation and I have time allocated for questions and discussion.

- 60 -
Discussing the major initiatives and their project objectives should include a brief
description of the project and the primary benefits that will be achieved.
CEOs buy IT initiatives that provide tangible business value benefits for the company:
- Increase revenue
- Decrease cost
- Improve productivity
- Differentiate the company
- Improve client satisfaction
Be sure your presentation and the Strategy Initiatives Summary document are loaded
with these benefits and be very specific as to what they are.
B. Return on Investment
For a strategic planning meeting, you dont normally have to
provide detailed Return on Investment numbers, but it helps
that you can provide the big picture of how and when a
project pays for itself.
Keeping the discussion at 30,000 feet might be difficult for

your CFO. The best way to support the conversation at a high level is to assure the
management team that supporting detail is available after the meeting.
For this meeting, you want to provide four elements of each strategic initiative:
1. Objective
2. Business value benefits
3. Estimated cost and payback
4. Estimated timeframe to complete
When you prepare for a strategy meeting, you wont have an exact Return on
Investment (ROI) for any of your projects because you havent done any detail project
planning yet, , , still at 30,000 feet.
However, you do need to provide your management team a cost estimate and an
estimated length of time it takes to pay for each project initiative based upon the
benefits you expect.
The benefits might be something different than a financial ROI. Either way, your senior
management team wants to know the justification for spending time and money on
anything you recommend..

- 61 -
Most management teams have a guideline they will follow as to the length of time a
project is considered a Go or No go, another length of time might be approved with
solid justification, and a project with longer payback period might be considered too
great a risk. Much has to do with the project, obviously.
In some cases, there may not be a dollar payback needed. An improvement
in client service or a capability that differentiates the company from
competition may be all the justification the company needs.
Meeting regulatory requirements to stay in business is also a no brainer.
The simplest way to calculate the payback period is to plot the costs and savings onto a
spreadsheet by month. When the cost savings or increase in earnings due to added
revenue overtake the costs, add up the number of months it takes and you have it.
Pretty simple and takes just a few minutes.
This calculation takes a little more effort when you begin achieving savings before the
entire initiative is completed. In a couple of our examples, we have multiple projects
making up a single initiative. You expect to begin achieving savings as soon as the first
component project is completed.
Your management team doesnt really care that its 21 versus 23 months. They need to
know if its 14 months versus 24 months. When comparing costs for investing into
several projects, two months difference has very little bearing whereas 10 to 18 months
difference potentially has major implications.
The total project cost and the type of benefits you will receive also have big impacts in
their evaluation of the worthiness of a project initiative.
Once again, there are no firm rules. Depending upon your companys situation and the
challenges you face, a strategic initiative with no payback can take priority over an
initiative with less than a year to pay for itself.
Understanding the dynamics of your business and the companys needs has as much to
do with your success in getting a strategic plan approved as having great cost
justification. There is no substitute for a CIO or senior level IT Manager who
understands the true needs of the company. It is a valuable asset to any company.

- 62 -
C. Validation
The most important objective in your strategy meeting is the opportunity to validate with
each of the senior managers that your plan is appropriately targeted. If it isnt, get input
from them so you can modify the plan as needed for approval and to move forward.
Tell the team in the beginning of your meeting that what you want to leave with is an
endorsement of the plan or input from them that allows you to modify it appropriately.
Your senior management team always has the right to send you back to start
over, but if youve done your homework and paid attention to the
conversations among them, its really difficult to be off the mark very far.
D. Awareness
Another aspect of your strategy meeting is to help the senior management team
become aware of several issues that are important aspects of any strategic plan.
First , they need to realize the size of the entire plan and the commitment thats required
not only from IT, but other parts of the company to achieve these results. You might be
surprised at how often failure results because the management team doesnt appreciate
the effort and the level of commitment required.
IT never accomplishes a strategic IT plan alone. It would be so much easier if that were
possible, but it never will be.
Second, its important for senior managers to realize that certain projects have to be
accomplished before others are started. The relationship and interdependencies of
projects can be seen in your strategy overview diagram.
Third, providing the ability to see the entire strategic plan and the timing of when you
expect to work on specific projects helps you down the road a few months when a
manager wants to know when his favorite project is going to be completed.
Some people have short memories, , , you might call it selective memory. Its another
reason you want to put your strategy on paper; makes it much easier to reinforce later.
Fourth, there may be key investments in equipment or resources that allow you to
execute the plan as indicated in your overview. Be sure to identify these issues and the
timing of them if they create significant dependencies in completing major initiatives.
Now is the time to insure your management team fully appreciates these dependencies.

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XII. Make it a Company Strategy

In your IT strategy meeting with the senior managers there are a few more things you
want to accomplish and worth highlighting.
First some background.
You may not be aware of it but there is a natural conflict between business
organizations and an IT organization. There are many reasons for it but essentially the
business managers who are your IT clients do not view IT as part of the core
competency of the company.
And guess what, , , in most companies they would be correct.
Technology is not the core competency of the banking industry, , , banking services are.
Technology is not the core competency of manufacturing, , , producing widgets is.
Technology is not the core competency of a hospital, , , it is patient medical services.
Is technology a critical part of all of these companies? Yes, you bet
it is, , , in fact, technology plays a major role in most companies in
their ability to achieve success and fulfill their mission.
However, the only type of company where technology is actually a
core competency of the company is in a technology company, , ,
and technology companies are a small number of the companies in
the world.
Your clients, department managers at least, also tend to view IT support services as
FREE services, , , sort of like they tend to view lighting, heat, and air conditioning as
free. They know deep down these things are not free but they never see a bill so, , ,
they take them for granted.
When an IT organization doesnt focus on a business clients priority it creates conflict. If

IT fails to implement a project successfully or to fix a problem immediately, it creates
conflict. When IT introduces change that impacts a clients business, conflict can occur.
- 64 -
There probably is a conflict of some level going on between the business units and the
IT organization of your company right now, , , it may not be serious but it is going to
present you with some challenges in implementing your IT strategy.
Here is an example. Lets say you manage the IT organization in a healthcare billing
company like our Company-B example, and the company is completely paper, , , no
automation. You present your IT strategy and it includes a project initiative called Billing
automation. The CEO and CFO are excited because they know as well as you that
automating billing and sending electronic claims versus sending paper claims will save
the company millions by reducing employee expense, , , its a super opportunity.
This is great but here is the challenge. To build your first interface with an Insurance
Payor or maybe a Clearinghouse, you need specific types of resources for the project.
You need a programmer and a business analyst. No problem, they are in the IT staff
and you control these resources.
You also need a knowledge expert from the Billing Department, , , you need Michelle
Jones who is the best and most knowledgeable person in the department. The reason
you need the best is because this first project has to go well, , , it has to be right. To
insure the project goes smoothly, you need the best in the company from both the
technical side as well as the business operation side. There is too much at stake.
Whats the problem?, you ask.

Senior management has approved the IT strategy and this billing automation project is a
key part of the strategy, , , Whats the problem?
The problem is that you arent going to get Michelle assigned full time to this project for
3 or 4 months easily. When you ask the Billing Department manager to assign Michelle
to the project, , , there will be resistance almost every time if IT asks for the resource.
Its not personal, , , it is just because you are from IT.
Michelle is a valuable resource and is needed in the Billing Department. Her manager
depends upon Michelle to run an orderly operation, , , she is vital to the business.
- 65 -
Well, reducing company expenses by several million dollars next year is also vital.
What do you do?
First, become comfortable using your senior managers to
help you do your job. In the strategy meeting, one of the
things you point out are the dependencies your key
projects have to achieve success. A dependency the
Billing automation initiative has is being able to get
Michelle Jones assigned to the first interface
programming project.
In the strategy meeting, you make a point to explain this fact and then you look at the
CFO who the Billing Department manager reports to and ask, Bob, can you get
Michelle assigned to this project full time for 4 months? We can start in March.
The CFOs answer will be Yes, no problem. If it isnt, the CEO will gently or maybe not
so gently nudge him to do it, , , your CEO will not lose this huge cost saving opportunity.
Then the CEO may ask you, What can we do to start the project sooner?
Let me repeat, , , if you go to the Billing Department manager and ask for Michelle, the
answer will be, No! If the Billing managers boss asks for Michelle for a very special
4-month assignment, , , the answer will be Yes, no problem.
In fact, the Billing manager will probably be excited for Michelle
because of the importance in the project she just learned about from
her boss and the visibility the project will have for Michelle, , , a great
opportunity for everyone!!
Do you see how the dynamics flipped upside down to the positive? You get Michelle as
a resource and everyone is happy. You would have gotten her anyway but with a fight.
The outcome this way is so much better for everyone.
So, my point is that if you need key resources and especially non-IT department
resources for your major initiatives, use the time you have in the IT strategy meeting to
get them, , , and above all, use your senior managers to get them for you.
Presenting your strategy is not just explaining what it is, , , you also
need to identify critical resources you need to execute the strategy
and get help from your senior managers to get what you need.

- 66 -
There is another reason you need to be aware of this natural conflict between business
operation units and the IT organization.
Your clients think, IT is always forcing change on us.
When they hear about the IT strategy the company has just approved, their initial
thought is, Here we go again, , , the IT organization is always making it difficult for us to
do our jobs.
They may not tell you this, but I assure you it is what many of the department managers
will think. You need to offset this resistance.
The best way to present an IT strategy to the business
operation managers is to call it a company strategy and
have the message delivered by the CFO or CEO, , , or a
senior level operations executive.
In reality, it actually is a company strategy, , , IT is simply
the facilitator.
Think of it this way. Your strategy is based upon business needs and issues and was
developed with the intent of doing things that deliver business value for the company. It
is actually a business strategy, , , not a technology strategy. Sure, there are technology
components in it but it was developed and justified by business need.
If your CEO or CFO presents this strategy to other managers of the company, they can
articulate the business opportunity and reasons why your company needs to make
these things happen. The real winners are going to be the business managers in the
end, , , it is about the business, it is not about IT.
Bottom line, , , there will be much more acceptance and less resistance if the strategy is
presented to the rest of the company as a company strategy.
Avoid the potential conflict and use your senior management team to deliver the
message, , , it will be much more receptive with managers in your company.

- 67 -
XIII. Now the Hard Part - Implementation

Youve just had the best meeting you could ever hope for. The senior management
team asked great questions and you were fully prepared to answer them. The entire IT
strategic plan that youve put together has been endorsed in full.
Now what?
All I can say is that I hope you are prepared to deliver what youve asked your
management team to endorse. Whats the old saying? Oh yes,
Dont wish for something unless you really want it;

you might get your wish.
Have you ever seen a managers eyes and facial expression change when he suddenly
realizes that he now has to go execute what he just told his manager he could do?
Developing and creating the plan is the easy part. Implementation is what sets
managers apart. As you develop your strategy, pay close attention to major issues that
are required to deliver the plan.
The good news is hopefully you explained in the strategy meeting that everything is
your best estimate and there has been no detail project planning work as yet.
Now, you get to go develop your real project plans with much more accuracy. Before
you do, remember the old adage one more time, , ,
Your detail project plans also need to have some buffer in them.
- 68 -
If you havent already done so, you should begin developing the detail project plans for
the projects that need to get kicked off soon. In fact, you should have gone into the
meeting with one question already answered in your mind; its likely going to be asked.
How soon can you start, and what do you need to go faster?
Project management is discussed at length in the publication titled
IT Project Management: a practical approach.
Im not going to discuss project management in this book, , , its an entire
topic of its own. The point I would like to make is that project success
happens consistently when you manage client expectations.
The strategy meeting has a huge element of managing client
expectations. This is another reason you need to be very conservative until you have all
the facts you need and can be more predictable in forecasting cost and timeframes.
Project success begins before you really do any task work. Now that you have the
overall strategy approved, you need to assign someone responsibility for each project
and they need to start obtaining specific requirements to define the projects.
More projects fail because of a failure in this front-end definition part than in any other
part of the project so be certain your team pays special attention to clearly defining the
requirements and deliverables of each project. Its a huge part of setting appropriate
and achievable expectations for your projects.
The GREAT NEWS?

Well, the great news is that when you implement these projects successfully, , , you do
what you say you will do, , , it creates, , , tremendous credibility!!!
- 69 -
XIV. The Value of Your Work

The value of developing a strategic plan is huge, , , REALLY
discuss the importance, let me add a personal comment.
BIG!!. Before we
My writing in every publication of the Practical IT Manager GOLD Series is based on

actual experiences of what has worked or in some cases not worked for me.
I dont believe much in theory. Dont get me wrong, theoretical models are fine; but I
believe most of us relate better to practical and simple approaches that work.
Ive always said, I doubt Ive ever created anything original in my life, but when I see
something that works well, I can incorporate it into my approach with the best of them.
Personal Note: I had an opportunity to join a small turnaround company at one point in
my career. It was an excellent opportunity that fit my management experience very well.
The CEO wanted to hire me and by chance there was a quarterly board meeting
scheduled during the time of my interviews.
The CEO asked me to meet with the Board of Directors and to
make a brief statement concerning my background. My
approach was simple and to the point.
I expressed a knowledge of the challenges facing the company
and how I felt the IT organization could help the company
succeed. At the time, there were major IT concerns. Rather
than tell them I was going to solve all the company problems, I
told them more of what I wasnt going to do. For example, I told them if they were
looking for a strong technical manager, I wasnt what they needed.
I also told them that if they were looking for a business manager to run IT in a way that
supported the business and provided tangible business value, , , then I was someone
they should consider.
I added that when I delivered an IT strategy, my record showed it would be completed.
No theory, just basic management focus of technology resources dealing with complex
issues in simple ways. The results are whats important, not that you tell a good story.
I was told months later the Board of Directors appreciated my honesty and especially
the no-nonsense approach to IT that they believed had many problems. It was a
refreshing change from the technical management style they had before me.
My experience in IT strategy had a lot to do with how I approached this discussion.
- 70 -
The value of developing a strategic IT plan is huge, , , like I said.

First of all, most of your counterparts arent developing a strategy unless they are asked
to. By then, the IT manager is already in react mode as opposed to being in a position
to lead and be proactive.
Senior managers of your company want leadership, and they will rally around the
person who demonstrates it.
Let me rephrase this, , , Senior managers NEED leadership in their IT organization.
Developing a strategic plan does a lot for you and your company:
- Validates what IT should be working on
- Helps the senior management team understand the role of IT and the
importance IT has in achieving company success
- Helps department managers understand the importance of IT
- Helps you manage department managers and senior manager expectations
- Helps create a vision for the IT organization and establish a sense of
leadership and importance of their IT support role
- Puts the IT organization in proactive mode versus reactive way of operating
Personal note: Back to my earlier point about incorporate things you observe that
work for others into how you do things. Im very serious about this statement. Possibly
the best advice I ever received in my career was from my first manager at IBM, , , his
name is Bryan Hathcock.
Bryan told me in my first week at IBM, Mike, Im going to pair you up with our best
Systems Engineers and our best Marketing Reps. Observe them and learn how they do
things. When you observe something that works well, , , incorporate it into how you do
things. When you observe things that dont work so well, , , discard these things.
I took Bryans advice and still observe others to this day and try to incorporate the good
things I observe into how I do things, , , and it is decades later.
His advice and my following it is a big part of my development over the years.
You never stop learning, , , because when you do, it is all over.

- 71 -
The biggest benefit

There is another big benefit when you develop an IT strategy. In fact, it may be the
biggest benefit of all.
You conduct an IT assessment to understand the needs and issues of your business
client (senior managers and department managers) and also to understand your IT
support capability and capacity. The whole purpose of an IT assessment is to determine
what you need to work on.
Having this knowledge is great but not worth very much if you dont do something with
it. The next step is to develop an IT strategy that articulates what you believe your IT
organization should focus on to support your company.
When you present your IT strategy to senior management and gain agreement that it is
an appropriate strategy for the company and commitment from them to fund and
support your strategy, , , there is no way for the IT organization to be out of sync with
the business.
Absolutely no way.
The main reason is because senior management becomes a part of the strategy, , ,
they have reviewed it, understood it, evaluated it, , , and endorsed it.
When this happens, a senior manager cant say things like:
- We dont know what IT is working on.
- We spend a lot of money in IT but dont always understand why.
- The IT organization doesnt communicate with us.
This big problematic issue called the IT-Business disconnect goes away.
Many studies suggest over 50% of all companies in the world have this problem. You
wont have it in your company if you present your IT strategy and get approval from your
senior management team.

- 72 -
XV. Sample IT Strategy

In earlier chapters we used two sample companies to illustrate parts of developing an IT
strategy. Both company examples were fairly simple to help us discuss the processes in
a book. Most real life situations will not be as simple,
Do you remember when I recommended you define the projects for your strategy and
let the timeline fall where it may, , , the projects actually dictate the timeline of your
strategy versus you force fitting projects into an artificial timeline like 24 months.
Its still true, but most strategies are going to be approximately 18 to 24 months.
Strategies less than a year into the future are pretty much tactical, , , not strategic.
When you try to develop a strategy beyond 2 or 3 years, it gets difficult because
technology is changing so much and faster than ever before.
In this chapter I want to show you an actual strategy I delivered to the executives of my
last company. I chose the two company healthcare billing company examples we used
in this book for a reason. The plan you are about to see is for a similar type company so
you should be able to relate much of what we discussed earlier with this model.
Let me set the stage and give you some background about my last
company as it existed when I became their new CIO.
- $100 million in revenue
- Our business provided physician healthcare services
- 70 physician offices scattered around the US
- Major clients for IT were the Billing Department and
remote Physician Offices
- Billing department costs were $6 million, or 6% of revenue
- Billing department had no automation; it was paper intensive in an industry
that offered significant potential for electronic billing
- Accounts Receivable collection days were averaging over 80 days (slightly
above average for paper billing)
- Billing Department was collecting over 90% of charges (very good)
- The company planned to acquire several companies with a major acquisition
anticipated within 12 months that would double the size of the company
- Physician Offices and the Billing Department needed additional reporting and
improved access to information
- The company had facility space challenges at Corporate and wanted to hold
Corporate support costs down as much as possible
- The company was achieving a 10% EBITDA (Earnings before interest, taxes,
depreciation, and amortization).
- 73 -
At the time I built the strategic IT plan you are about to see, I had been with the
company for about three months. All issues considered immediate tactical projects (the
lower levels of the Project Priority Hierarchy Pyramid) were already completed or being
worked on at the time we held our first IT strategy meeting.
Never present a strategic plan unless you are
positioned to deliver it. If the infrastructure and support
processes in the bottom two levels of the pyramid are
not stable, your presentation should be focused on
these critical business issues, , , not talking about
strategic projects.
Dont forget, , , you have to walk before you can run.
As I began to pull my thoughts together to develop an
18-24 month IT strategy, I started by listing the major
goals an IT strategy needed to achieve to support the
company:
- Reduce the cost of billing and collections
- Position IT and the company for acquisitions
- Assist in increasing EBITDA from 10% to 13-15%
- Reduce the use of paper by automating key processes
- Position the company for significant growth without having to increase the
size of Corporate support departments at the same rate
The support processes and infrastructure were already in place to allow IT to focus on
the strategic projects you will see in the IT strategy. This does not mean there were no
issues or that projects did not exist in each of these areas to improve support of our
business, , , we still had plenty of challenges, but we were positioned to move forward.

- 74 -
The IT organization was positioned to work on strategic projects, , , I had filled many
skill and capacity gaps that existed. We had to stabilize the technology and implement
basic support processes with new staff before we could focus on a strategic IT plan.
I repeat this because one of the things that gets an IT manager into trouble is when
he over commits to chase after strategic projects before getting his house in order.
The plan you are about to see has 16 key initiatives shown on two pages.
Let me stop you right here. You may recall that I said you should try to summarize
your projects into 6 to 8 major initiatives to discuss in an IT strategy meeting. Thats
correct. The strategy you will see has 16 major initiatives, , , but 95% of the meeting
was spent on the first page, , , and there are only 6 initiatives on this page.
The first page is the real substance of this strategy. It includes 6 major initiatives
required to take the company from a paper operation to a paperless environment.
These 6 initiatives include the majority of the benefits in the plan, especially the financial
improvement opportunity. The second page shows projects that needed to be
completed to meet additional business goals I defined when I developed the strategy.
The plan I will show you has no cost justification tied to each project although the
numbers and benefits were available had I needed them.
The objective of my strategy meeting was to establish a clear awareness of what I
thought we should target and the opportunity that existed for our company. My goal was
to validate with my CEO, CFO, and COO that this would be an appropriate strategy for
our company.
The purpose for showing you this plan is to provide a real example and to provide more
tips that can help you present your plans more effectively. These include:
1. Number each group of projects and give each sub-project a related reference ID
such as 1A, 1B, 1C, etc.
2. Color code each project to show current status. In this presentation, I used:
dark green completed
light green in process, , , being worked on now
yellow
planned and defined but not started
light red
to be defined
dark red
not yet started and may not be required
The second page includes other significant projects that positioned the company for
major growth and key projects to be considered in next years budget.
Take a look at the strategy I delivered to my last company on the next five pages.
- 75 -
Business Automation Strategy

6 Steps to a Paperless Environment
1A
East
Projects
1
Billing
Cleanup
Other Claims Automation Processes
1D
1E
1B
1F
Other
Clearinghouse
TWCC0 73
1G
Payor
Payor
1C
West
Projects
2
OPTIO
Report Management
& Distribution
2A Reports Distribution
2B
Fax Server
2C
Forms Elimination
Automation
PHASE-I
(Model in place)
3
Electronic Encounter
&
Fee Ticket
6
Workflow
4
Scanning & Image
Retrieval
4A
H/R &
Payroll
4B
A/P
4C
Billing
4D
Clinic
Files
5
Employer Outcomes
Module

- 76 -
Automation
PHASE-II
(Production mode)
PAPERLESS
Business Automation Strategy

Other Significant Projects
15
AS/400 Growth
Assessment Plan
AS/400 O/S Upgrade
8
MT System
Data Purge
Old
A/R
9
Month-end
Overhau l
Refined
AS/400 Business
Process
10
Clinic AS/400
Availabilit y
Project
11
Sold Company
Separation
12
10.1 IP
Renumber Project
14
Software Distribu tion
Automation
13
Network Growth
Assessment Plan

- 77 -
16
IT Strategy Summary
Key points in this strategy:
1. Multiple major initiatives can take place at the same time.
2. Many major initiatives actually have several sub-projects.
3. There are considerable dependencies of projects.
4. Many projects cannot or should not begin until other projects are completed.
An example is the 1A, 1B, and 1C projects in Initiative 1 must be completed before
beginning the 1D Clearinghouse (C/H) Pilot project.
5. Projects are at all levels of activity, from identified as needed to completed.
6. Page 1 looks simple but its not at all and requires a significant amount of work.
7. Multiple disciplines within IT and various company departments are involved and
impacted. A strong level of resource commitment will be needed to execute the plan.

- 78 -
IT Strategy Summary
Page 1
Initiative 1 - Billing Cleanup and Automation

- The key strategy to automate billing; it is an 18 to 24-month plan.
- Billing resource needs are reduced and lead time to receive payments is
reduced two major benefits for the company.
- Once the pilot (1D) is completed, multiple Clearinghouse or Payor interface
projects can be developed simultaneously (1E, 1F, & 1G).
- Three cleanup projects are necessary first (1A, 1B, & 1C).
- Michelle Jones is a critical resource need for the 4-month pilot project (1D).
Initiative 2 - OPTIO Report Management and Distribution
- Positions the company for automated report distribution in 3 key areas:
A. Internal Normal month-end reports to managers of the company.
B. Billing Department Automates claims generation to Payors.
C. Clients Automated report distribution to thousands of clients when
the Employer Outcomes Module (5) is completed.
Initiative 3 - Electronic Encounter
- Automates more of the front-end data capture to facilitate billing sooner.
- Requires considerable training and a phased implementation.
- Requires knowledge experts commitment from Billing and Operations
Initiative 4 - Scanning & Image Retrieval
- There are 4 areas of opportunity
A. Human Resources and Payroll (targeted for pilot due to small size)
B. Accounts Payable
C. Billing
D. Remote office patient records files
- Eliminating paper saves considerable storage space in many locations.
- Pilot easier operations (HR and AP) before touching patient records.
- Automates ability for key resources to provide faster client service response.
- Payback from reclaiming space, improve client service, and hiring avoidance.
Initiative 5 - Employer Outcomes Module
- Creates ability to capture billing data earlier leading to faster billing services.
- Positions the company to provide outcome information for clients
Initiative 6 - Workflow
- Creates an automated process of working business processes in many areas
- Creates an ability to measure employee productivity much better.
- Positions the company to hire work at home employees by being able to que
workloads and to track completions of work processes.
- 79 -
IT Strategy Summary
Page 2
Initiative 7 - AS/400 O/S Upgrade

- A tactical project that was necessary for growth.
Initiative 8 - Data Purge
- Will improve systems response times and avoid need to buy disk space in the
short term..
- Key project to position the company for a large acquisition..
Initiative 9 - Month-end Revisions
- Similar to Data Purge (8), a streamlined month-end process to position the
company for growth and to leverage Automated Report Distribution (2).
Initiative 10 - Clinic AS/400 Availability Revisions
- Significant telecom cost savings opportunity in creating a store and forward
process to eliminate most of the companys Wide Area Network expense.
- Additional benefit in reducing local office downtime.
Initiative 11 - Sold Company Separation
- Final projects to transition the operation and support of Company X.
Initiative 12 - 10.1 Renumber Project
- Standardization of the companys network addressing scheme to facilitate
new locations added through acquisition.
Initiative 13 - Network Growth Assessment
- Preparation to insure the companys network and infrastructure are fully
prepared for significant acquisition growth.
Initiative 14 - Software Distribution Automation
- Automating software distribution allows IT to support growth without adding
people, , , to a point.
Initiative 15 - AS/400 Growth Assessment Plan
- Evaluation of current and future server needs to insure stable operation with
scalability built into our architecture.
Initiative 16 - IT Budget Preparation
- Capital budget planning across the enterprise
- Many strategic projects have capital and operations budget implications.

- 80 -
XVI. Summary
The IT strategy you just looked at was approved and we completed many of the projects
before I left the company to start MDE Enterprises, Inc. in late 2000.
Developing an IT strategy is required even if your company does not have a formal
company strategy, , , its not an excuse for you to not develop one.
The only way to ensure your IT organization focuses on the appropriate things for your
company is to develop an IT strategy, present it to senior management, and get their
approval and commitment. Otherwise, there is a high probability you will be out of sync
with your business client, , , and that spells disaster.
Your strategy does not need to be eloquent or pretty, , , keep it simple and
straightforward. Draw a picture and it will be easier for senior managers to follow your
presentation and to understand. I developed mine with PowerPoint.
The Strategy Summary document with bullet points that you create as a handout does
several things for you:
You can use it for making key points in the meeting, , , it will keep you
focused and ensure you cover all key points.
Its a great tool for the senior managers to reference back to when they have
questions or discuss components of your plan.
It demonstrates a manager who is organized.
You cannot afford to manage an organization without putting an IT strategy in place. Not
having one puts you in total react mode and causes concern among the senior
managers about IT spending that you may not be aware of.
Develop your plan, be sure it delivers plenty of business value, get it approved, , , and
you are off to the races on solid footing,

- 81 -
Appendix A
Where Do You Want To Be Questionnaire

1. What is needed in technology to support the companys growth plans?
2. What are needed capabilities to help the company achieve its financial objectives?
3. Identify automation projects that improve the companys profitability or cash flow.
4. What are the projects that can differentiate the company from competitors, or that
creates a significant story for investors?
5. Quantify key gaps in IT services or application functionality needed?
6. Are there assimilation opportunities to eliminate redundancy?
7. Are there key cost leverages in IT?
8. Are there major employee productivity gains through innovation of technology?
8. Can certain improvements eliminate waste, bad debt, or lost sales?

- 82 -
Appendix B
Project
Project Initiative A
Project 1
Project 2
Project 3
Project 4
Project Initiative B
Project 5
Project 6
Project 7
Project Initiative C
Project 8
Project 9
Project Initiative D
Company-A
Project Cost
Ongoing Ops Cost
Project Initiative E
TOTAL

- 83 -
Capital Cost
ROI
Appendix C

Company-A
Project
Project Initiative A
Project 1
Project 2
Project 3
Project 4
Project Initiative B
Project 5
Project 6
Project 7
Project Initiative C
Project 8
Project Initiative D
Project 9
Prerequisites
Other Project
Dependencies
Key Resources
Required

- 84 -
Cost
Notes

- 85 -
The Practical IT Manager GOLD Series of books and tools will

help you manage your IT organization better. The processes and
tools discussed in these publications are used by thousands of IT
managers around the world to achieve more success.
The series includes the following titles and more:
- IT Management-101: fundamentals to achieve more
- IT Assessment: the key to IT success
- IT Strategy: align your IT vision for business value
- IT Project Management: a practical approach
- IT Asset Management: tracking technology assets
- IT Organization: right-size your organization for success
- IT Staff Motivation and Development: build a world class team
- IT Budgeting: operational and capital budgeting made easy
- IT Due Diligence: merger & acquisition discovery process
- IT Assimilation: consolidating redundant technologies
- What To Look For in a CIO: get more value from your IT investment
Every aspiring IT manager will, without question, benefit from your work.
Bryn Thomas - Philadelphia, PA
I am so thrilled to find a resource that addresses my needs as an IT executive.
Ive been looking for something like this for years.
Charise Simpson - San Diego, CA
Your publications get to the heart of IT management and provide practical
examples not found in other books.
Dan Tankersley - Paducah, KY
The value of the materials is excellent and can be used by any manager in any
field, even outside of IT.
Kenneth Wakati - Dar es Salaam, Tanzania
Mikes experiences offer valuable insights on how to build an effective IT
organization that can truly make a difference.
Judy Campbell - Austin, TX
MDE Enterprises, Inc.
helping IT managers of the world achieve more success


IT Strategy: Align Your IT Vision For Business Value (Practical IT Manager GOLD Series Book 4)

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IT Strategy: Align Your IT Vision For Business Value (Practical IT Manager GOLD Series Book 4)

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Mike Siscos

Practical IT Manager GOLD Series

align your IT vision for business value

helping IT managers of the world

Copyright MDE Enterprises, Inc.

Practical IT Manager GOLD Series

align your IT vision for business value

Copyright MDE Enterprises, Inc.

Mike Sisco, ITBMC

The challenge of managing technology resources has never been

Copyright MDE Enterprises, Inc.

The Practical IT Manager GOLD Series includes the following titles:

Mike Sisco, ITBMC

MDE Enterprises, Inc.

IT Manager Institute www.itmanagerinstitute.com

Where Do You Want To Be Questionnaire . 82

Copyright MDE Enterprises, Inc.

What is a Strategic IT Plan?

Copyright MDE Enterprises, Inc.

Here is the thing, , , real value is in the top two layers, , ,

Copyright MDE Enterprises, Inc.

As you conduct an assessment of the business to determine what your IT organization