Modus Operandi

Strategic planning seems to have taken a bit of a holiday in recent times, especially in the private sector where many listed companies are so concerned about their future that they do not bother to think beyond the next quarter results. However, according to John Smyrk, a strategic planning consultant and principal of Sigma Management Sciences, it is a mistake to think of "strategic" purely in terms of time frames.

"People tend to think that if it's a long time frame it's strategic, if it's a short time frame it's not. That's a very naive definition. The classical definition of a strategic plan is that it's closely linked to the pathways an organisation believes it needs to follow in order to achieve a particular end point or vision," Smyrk says. "There are lots of people doing what they think is IT strategic planning. However, if you look across the quality of those plans they range from the utterly indifferent to the very elegant and sophisticated."

Smyrk also rejects the excuse that there is little point in making long-term plans these days, given how quickly the business landscape and technology change. "That's a common misconception," he says. "People confuse the underlying infrastructure directions with the almost day-to-day movements at the applications level. On the technological side, commitments made in communications and operating systems, for example, tend to have a very long life indeed."

Nor is big beautiful when it comes to strategic plans, according to Smyrk. He cites the Auditor-General's department in Canberra as an example of a sophisticated and elegant IT strategic plan that spans only 12 pages yet provides a complete framework within which the department can make all of its important IT decisions. By contrast, he recalls a presentation he attended given by the CIO of a large global mining company whose IT strategic plan Smyrk describes as amateurish at best and a complete and utter waste of plane travel at worst. In fact, Smyrk thinks the level of sophistication in strategic planning generally is much higher in the public sector than in the private sector, which has come about through two factors.

"First, there is a higher appreciation of the value of planning in government in general. Some of that might give rise to wasted plans and we all acknowledge that. However, one of the interesting and valuable by-products of that is that there is a widespread acknowledgment that what happens in IT has to be planned and linked into what's happening on the business side. The second element is that there is a cohort of relatively sophisticated senior IT people in many large public sector organisations who are able to carry that through," Smyrk says.

ABA: Outsourcing Strategy

As an organisation with responsibilities that are subject to rapid changes in technology and political imperatives, information technology itself represents approximately 7.5 per cent of the Australian Broadcasting Authority's (ABA) total expenditure. However, according to Neil Shannon, the ABA's manager, IT facilities management, in the past the application of IT was very reactive and ad hoc, and this resulted in a diverse mix of equipment, software and systems.

Additionally, in 2000, the ABA outsourced its IT infrastructure to Ipex as part of the federal government's outsourcing policy. However, as part of the "Group A" set of eight government departments, the ABA accounts for only a small proportion of the five-year contract with Ipex. The other members of the group are also all Canberra-based, whereas the ABA is mainly Sydney-based, and consequently Shannon thinks the outsourcing arrangement has not worked as well as it could for the ABA.

Shannon joined the ABA in May 2001 and was brought in, he says, principally for his contract management skills rather than his strengths in IT. He quickly realised it was time for the authority to think more strategically about where it was going in terms of IT, but discovered there was no strategic plan as such. So he set about developing one. "My original intention was to try and do that in-house," he says. "However, with all the other issues going on that was just not possible. So we decided to go out to the market and get somebody in to partner with us in developing that IT strategic plan.

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"A lot of strategic plans are as thick as a phone book and go down to an incredible amount of detail, and to me, burying yourself in that level of detail is just a waste of resources. Also, no one's going to read a big document in an organisation this size [there are approximately 140 people in the ABA] and if you want people to participate in this, it needs to be something at a summary level they can understand. So we put out a brief just to chart our overall strategic directions."

Shannon found that was a challenge in itself, though, for most consultants, who he says have a very detailed view of what a strategic plan is and a standard way of producing one. Nevertheless, CMG IT Services did come back to the ABA with a return brief that Shannon says essentially was what the authority was looking for.

The ABA has four branches: planning and licensing; industry performance and review; legal and policy; and corporate. All had tended to do their own thing regarding IT, so according to Shannon, when CMG came on board the first step was to research and produce a statement for each of the branches that clearly defined their business needs and priorities. "I think that was very useful to the branches," Shannon says. "One of the big risks in a small organisation is that everybody's loaded down with their core business and every time you want to do something like this, they see it as a distraction from that and [ask]: ?'What's in it for us?'"CMG then facilitated sessions with each of the branches that Shannon says started to look at how those business needs related to IT both currently and in the future. These were then put into matrices in order to link all the synergies together. Again, Shannon says all the branches viewed this very positively and were happy to take part. From this, there were some further focus groups and discussions that resulted in an overall blueprint or strategic plan of where the branches were going and where they ideally wanted to get to. According to Shannon, the plan covers a time frame of three to five years.

"[The strategic plan] gives us a great deal of clarity about where we're going, how we're going to get there and what are the real drivers. But we stress that it's where we're heading as of today. We need to review this each year because we're never going to reach [the end point]. One to two years down the track that point will move but you must have some focus as to where you're going at a particular time," he says.

The ABA has developed a program of works for IT based on the direction of the strategic plan that includes the building of a large data warehouse, appointing a new ISP and developing a new Web site. Ipex was not involved in the strategic planning itself. Rather, Shannon says that its role will be to produce a technology plan that matches the strategic plan. In particular, he is looking to Ipex to rationalise the ABA's large number of servers and streamline its mix of Unix and Windows-based operating systems. However, he says that the principal benefit resulting from the strategic plan is that ABA staff now have a consistent, organisational-wide view of where the authority is going with IT. Rationalising the servers will also improve efficiency and lead to much better backup procedures and business continuity planning. The latter, he says, has not been well managed to date, leaving the organisation exposed to some risk.

Macquarie University: A Rational ApproachThe need to rationalise and replace disparate and ageing technologies also played a big part in Macquarie University's IT strategic planning. When Brian Kissell joined the university in 2000 to take charge of what was then the office of computer services, the story was a familiar one: a lack of faith in central IT's ability to deliver had built up and people consequently had gone off and done their own thing. At the same time, the university was going through a major change agenda. Following the completion of a formal work practice review and design exercise carried out in the second quarter of 2001, a new office of information technology services was established that forms part of the university's newly-formed division of e-learning and information services.

As a result of these imperatives, along with greater audit requirements, Kissell, director IT services, developed an IT strategic plan with these goals:

1. To build and maintain effective relationships between IT services and its clients and develop an in-depth understanding of their business requirements.

2. To develop and implement a blueprint for the life cycle support of core university systems and their supporting infrastructure.

3. To develop and maintain strong industry partnerships in pursuit of delivering a world-class technical infrastructure to the university community.

4. To build and maintain an organisational culture conducive to quality outcomes and operational processes.

5. To enshrine client focus as the underlying foundation for service delivery.

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Kissell admits that the plan is a first cut and high level. However, he says it reflects a number of recommendations resulting from the work practice review and also establishes a formal baseline for ongoing development of strategic objectives, aligned to identified business goals and objectives. Its time frame is three years but he plans to revisit and upgrade it every year and undertakes quarterly reviews of how well it is being put into practice.

Central to the IT strategy, in particular the third goal, has been the implementation of a new data centre to deliver Web services to students, staff and other organisations that deal with Macquarie University. The solution, which Kissell says is now live but still evolving, includes an enterprise-wide portal that enables more than 25,500 users to access a full range of university services from anywhere at any time via a single sign-on. These include enrolments, training courses, exam results, library services, human resources information, finance systems and research data, as well as a personal calendar and e-mail account. "Students and staff today are becoming more demanding and expect to be able to interact with the university when and where it suits them. So we're putting infrastructure in place that will enable us to take advantage of new technologies as they arrive," he says.

According to Kissell, individual divisions within Macquarie University have been good at developing their own strategic plans, but have tended to do them in isolation. Now he says the vice-chancellor is trying to build an overall, more cohesive plan for the university that clearly articulates where it is going. Kissell has also contributed to this, and says that in aligning IT strategy to the overall plan he and his team are winning the university over to IT services, although some resistance remains.

"There is still a bit of a ?'blame IT' mentality and culture change does take time, especially when things have been too free in the past," says Kissell. "Slowly but surely, though, people are coming to realise the benefits of our strategic direction."

Hewlett Packard: Merger Minefield

While Sigma's Smyrk says the private sector is lagging when it comes to strategic planning, there is nothing like a merger or acquisition to force a review of a company's IT strategy. For while a merger may make good business and administrative sense (or not as the case may be), it can be a nightmare for those charged with integrating the disparate IT environments. And regardless of industry, mergers do not come much bigger than that between Hewlett-Packard (HP) and Compaq.

The "new HP" is structured along four independent business lines. Since the merger got the green light in May 2002, Kerry Holling, director of the information technology group for HP Australia, says he has been aligning his internal IT organisation and staff with those respective business units depending on their skills and experience.

A decision has also recently been made to manage HP's own IT infrastructure through HP's outsourcing business, or "insource" it, as Holling calls it. However, he has a head start in this respect, as he went through the same process three years ago while he was in charge of internal IT at Compaq Australia. In fact, Holling has been through the whole merger process himself before. He was originally information services director at Digital Equipment Corporation Australia when Compaq acquired Digital in mid-1998. He subsequently took on the combined internal IT role at Compaq Australia and is now doing the same at Hewlett-Packard for Australia and New Zealand.

However, while infrastructure is a huge component of HP's overall IT strategy, the new combined entity also has a global portfolio of 7000 applications, which Holling says it needs to drastically reduce. To this end, and prior to the actual launch of the new HP, the company set up "clean rooms" to plan the integration process at a corporate level. In fact, from an IT perspective, Holling says that truly strategic plans come out of corporate and the plans he puts in place at a country level are more tactical.


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