Industry Insights

What’s the matter with digital strategy?

allstates

It’s becoming popular in the public sector to dismiss strategic IT planning, claiming that all the associated effort is a waste of time.  This is the “digital” era (so the argument goes) and citizen expectations, technology capabilities and external influences move too quickly for strategy to be valuable.

There’s a logic to that.  But I think there’s a more constructive response than just brushing strategy under the carpet and celebrating your shorter ‘To Do’ list.  Instead, how about dividing strategic IT planning into streams, based on stability of content?  In that formation your next IT strategy could comprise:

  1. a considered articulation of the current business strategy, but also of the range of alternative directions in which it might plausibly go next,
  2. a set of short- to medium-term steps, directly supporting that business direction, which could be expected to be fairly volatile, so need to be simple for ease of maintenance,
  3. a more stable set of strategic steps, designed to provide a valuable foundation irrespective of the precise direction taken, and
  4. any sticky non-discretionary steps, for example those addressing regulatory change or extreme technical debt

A layered approach like this is a powerful way to think ahead, but can also tolerate rapid change.

The “Supporting steps” layer (item 2) would typically contain functional changes: The set of new or changed Customer Journeys which are currently believed to bring the greatest value.   In central government this layer will vary a great deal for each organisation, but in local government, education and healthcare we should expect similar organisations to have similar goals.

The “Strategic steps” layer (item 3) is different, and requires more art to construct.   It’s there to handle important enabling changes for the current business direction, but also those related to a range of alternative business strategies which are both foreseeable and probable.  It might, for example, include the adoption of a single enterprise data model, a move to cloud infrastructure, or the restructuring of a service desk contract—anything which enables the range of likely business directions.  Non-competing organisations could look to share much of the thinking here, but can stand-out by planning and executing better than the rest.

Finally, there’s the “Non-discretionary steps” layer (item 4).  Like the “Supporting steps” its contents are likely to be fairly straightforward to define.  But unlike in the “Supporting steps” we’d expect these “Non-discretionary steps” to be very stable.  They will typically be predictable several years out, based either on end-of-life dates or new regulation.  This layer is full of projects that may not seem glamorous in a digital context, but which absolutely must be done nonetheless.

There’s a nice analogy for all this in physics, using the States of Matter:

We can think of the non-discretionary steps (item 4) as being in a “solid” state.  They’re pretty concrete, so highly unlikely either to morph into something else or to blow away with the winds of change.  We can plan with confidence to tackle them, knowing they will remain necessary, and can be handled in a well-defined way, at a predictable pace.  Traditional IT planning works pretty well here, and using the term “strategy” is perhaps too highfalutin for this part of the portfolio.

At the other end of the scale there’s the business direction and its supporting steps (items 1 and 2).  These can be thought of as being in a “gas” state. In any competitive sector they’re very volatile, moving around and shifting shape regularly, and this is partially true in the public sector too.  This volatility is a likely to be a good thing for the organisation, but it was certainly something that traditional IT strategy fans eschewed.  Their methods were relatively slow and cumbersome, and simply couldn’t keep pace with all the Brownian Motion.  Some other mode of planning was needed, and many have tried to apply Agile methods to their IT planning.

Then there’s the middle ground—the strategic steps (item 2)—which are discretionary but which don’t directly support specific business initiatives. Their importance may not be immediately obvious to everyone, and difficult judgements may be needed about which are most valuable.  Their precise positions in the list of priorities may be fluid, but not so their content.  On the whole they’ll stay together in one place, making it perfectly possible to plan ahead.  This work can be thought of as being in a “liquid” state.

layers

Thinking about our target technology in this way makes a number of things a little easier.

First of all, it can help the C-Suite to understand mandates and boundaries.  For example, instead of waging silent wars with each other, Chief Digital Officers (CDOs), Chief Information Officers (CIOs) and others can use the states of matter to help them segregate responsibilities.  It may be natural to expect CDOs to direct the gas state, while CIOs tackle the solid and liquid states.

Secondly, it helps with strategic sourcing.  We should spot immediately that we’ll want to move towards very different supplier arrangements for the solid and gas states—not only with different balances of  insource vs. outsource, but also with different suppliers, contractual bases, and risk and reward patterns.

But most interesting to me are the implications for producing and maintaining a strategic plan. The states of matter should help us to appreciate that we shouldn’t lump all of an organisation’s technology together into a single plan, then expect to apply a single governance regime.

We’ll likely still want the kind of medium-term portfolio planning and budgeting we’re used to for the non-discretionary steps (solid), but we’ll need a more agile approach in the supporting steps (gas) to help us flex with business need.  Our choice for the strategic steps (liquid) will depend on our appetite for business risk, but is likely to look more solid than gaseous wherever the strategic steps are architectural in nature.

To make a meaningful statement of strategic intent in the digital age, we’ll have to recognise these states of matter, and segment our plans accordingly.  We’ll be exact about the solid state, and clear on the content of the liquid state (if not the precise prioritisation).  But when we get to the gas state our long-range plan will be fast and fluid.  We’ll need a layer here which stays in sync with dynamic business direction, allowing content change on-the-fly.  Get this right, and we’ll be able to maintain a clear sense of meaning for technology staff to attach to, and be able to understand and exploit opportunities to tackle change far more effectively.

Does this way of thinking work for you?   Please do get in touch to discuss its application, … or its flaws!

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