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IT Strategy vs.

Business Strategy

Are we aligned?

What is an IT strategy?

An IT strategy sets the direction for the IT function in an organisation. It outlines the vision of how the organisation’s demand for information and systems will be supported by technology, including hardware, software, telecommunications and services such as IT operations, systems development and user support.

An IT strategy contains the following basic components:

1. Business context and requirements

2. IT as-is state

3. IT to-be vision and state

4. Performance measures- TCO

5. Projects and implementation roadmap

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August 2013 IT Strategy

PwC Israel

PwC’s Annual Digital IQ Survey Digital Conversations and the C-suite

• Strong C-suite relationships key to Digital IQ

• Strong Collaborators think together

• Strong Collaborators more aligned on strategy

• Shared understanding of opportunities and risks

• Strong Collaborators’ roadmap links business and IT efforts

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Why is an IT strategy needed?

Why is an IT strategy needed?

• An IT strategy sets the context for decision making, provides a roadmap for IT value delivery and is a communication vehicle with the business that describes the activities IT is undertaking to enable business goals and objectives

• Benefits include:

- IT investments better aligned with changing business needs

- Optimised allocation of capital

- Increased ability to execute

- Better utilisation of resource assets

- Increased employees satisfaction

• An IT strategy is a continuously updated “living” document that provides ongoing business and IT alignment

What happens if an IT strategy is missing?

• The following shows the difference between an organisation with a non-existent/poor IT strategy vs. an organisation with a good IT strategy in place to guide its IT function

Good IT Strategy Missing / Poor IT

Strategy

Business-IT alignment

IT value

Innovation

Organisation effectiveness

IT ROI

Disparate

Poorly understood

Not innovative

Slow and passive

Sub-optimal

Integrated

Mapped and managed

Business focused

Agile and responsive

Maximised

Poor return on

investment

Capability bottlenecks

Out-of-date IT priorities

Unplanned events

Negative impacts to the

business

IT value for money

Ready access to skills

Business-aligned IT

Few surprises

Adverse impact

mitigation

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August 2013 IT Strategy

PwC Israel

Challenges Implications

• IT strategies lack linkages with business strategies due to:

- Business strategies not well formulated

- Limited engagement with the business

• Benefits to be achieved unclear and/or not explicitly stated

• Some IT strategies contain only a list of initiatives

• Short-sighted (e.g., annual) plans instead of longer term strategies

• Lack of focus and unclear direction

• Unstructured decision making process and rationale

• Misalignment between business needs and IT investment

• Reactive approach to delivering individual business needs

• Stretched delivery capacity

Root Causes To address, need to understand

• Lack of understanding of what is an IT strategy and what makes a good IT strategy

• “What makes a good IT strategy?”

• Lack of knowledge and capability in the IT strategy development process

• “How do I develop a good IT strategy?”

• Ineffective engagement of the business • “What are common pitfalls and approaches to mitigate?”

IT strategy challenges, implications and root causes

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August 2013 IT Strategy

What are the dimensions of an IT strategy? An IT strategy should cover the following dimensions that includes the services provided and the manner of that provision:

What is the business context to the IT strategy?

• MF business strategy and objectives

What is the portfolio of projects that enable the IT strategy and business capabilities?

• IT projects and how each is aligned to the business

• Ongoing support

• Required finances – How to maximise value for money while minimising risk

What is the structure of internal IT and how services are delivered?

• Globally delivered

• Outsourced

• Contract staff

• 3rd party vendor

What is the strategic direction on the architecture layers?

• Business processes

• Data architecture

• Application

• Infrastructure

What is the IT governance?

• Structure

• Processes (e.g., portfolio planning, projects approval)

Management &

Governance

Portfolio & Financial

Enterprise Architecture

Organisation & Supply

IT Strategy Dimensions

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IT Strategy

What are the characteristics of a good IT strategy?

• Clear purpose and use by clearly addressing how key challenges to the business are addressed

• Aligns with “the Rest of the Business”, including territory and global business strategy and global IT strategy

• Fiscally responsible by addressing IT costs and business benefits to be achieved

• Strikes a financial balance between IT spending (asset and investment) and business needs for growth and productivity improvement

• Focuses on business and enterprise value in decision-making criteria

• Addresses the “How” in addition to the “What” and “Why”

• Communicates effectively

• Measures progress with targeted performance measures

• Considers competitive analysis

• Pragmatic directions and recommendations

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IT Strategy

PwC Israel

What are the key steps in developing an IT strategy?

1. Understand the strategic business objectives and key priorities that need to be addressed

2. Understand the IT current state (people, process, technology), current capabilities and external trends

3. Develop a future state for how IT should meet the current and future needs of the organisation

4. Define performance measures to know when results are achieved

5. Translate strategies into actionable rolling plans to support business needs

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August 2013 IT Strategy

What is the IT strategy development framework? Key steps in developing an IT strategy:

Bu

sin

ess

IT

Iden

tify

1. Understand the strategic

business objectives and key priorities that need to be addressed

3. Develop a future state for how IT should meet the current and future needs of the organisation

5. Translate strategies into actionable rolling plans to support business needs

2.Understand the IT current state (people, process, technology), current capabilities, and external trends

Iden

tify

& D

efi

ne

4.Define performance measures to know when results are achieved

IT Strategic Direction

Business Strategy

Business Requirements

Implications Implications

IT Industry Trends & Best Practices

IT Requirements Assessment of Current IT

Implications

Roadmap

Rolling plans

Performance Measures

Disruptive Technologies

Constraints

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PwC

:לדוגמא

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PwC Israel

ITגישות בפיתוח אסטרטגיית

11

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פיתוח עצמי

פתרונות מדף

ERP

Best of Breed

Hybrid

PwC Israel

י גוף מערכות המידע מכפיל "בעבר נהוג היה לראות בפתרונות ובשירות שניתן ע

הוקצבו , בהתאם לכך. כוח שיוצר יתרון תחרותי ומייעל תהליכים ארגוניים רבים

.הארגוניים השוניםלשירות התהליכים סכומי עתק לפיתוח מערכות מותאמות

גבוהותעלויות 7

התאמת פתרונות מצריכה זמן7

נקודתייםפתרונות לצרכים 7

מפתחלהיווצר תלות בעלולה 7

Fraud -את הסיכון למעלה 7

את הארגון" לאבד"עלול 7

לתהליכים מלאה התאמה3

העסקיים

תלות ללא עצמאית התנהלות3

בספקים

ITגישות בפיתוח אסטרטגיית

פיתוח עצמי

12

PwC Israel

פתרונות . הארגוןמוחלט של צרכי פתרונות מדף הנותנים מענה לרוב הקיימים

סטנדרטיים Best Practicesאלה מבוססים על

כספי חיסכון3

תהליכית התייעלות3

טכנולוגית התייעלות3

מבוסס תכנה בית של תמיכה3

הארגון צריך להתאים עצמו7

לפתרון ולהראות גמישות

(מחשבתית ותהליכית)

ITגישות בפיתוח אסטרטגיית

פתרונות מדף

13

PwC Israel

יחידה על מנת לתת מענה לכל התהליכים בארגון ERPהטמעת מערכת

אינטגרטיבי פתרון3

אחד פרויקט / אחד ספק3

אחת מערכת של תחזוקה3

יעילים עבודה בתהליכי תומך3

עלול לדרוש התאמות לתמיכה7

בכל התהליכים בארגון

עלויות הטמעה גבוהות7

תלות בגוף היישום7

ביקורת/ סיכוני בקרה 7

מצריך שינויים בדרכי העבודה7

ITגישות בפיתוח אסטרטגיית

ERP מלא

14

PwC Israel

הטמעת מספר פתרונות שונים ייעודיים המותאמים לכל אחד מהתהליכים

העסקיים בארגון

לתהליכים יותר מדויקת התאמה3

להשקיע היכן להחליט ניתן3

ולהשתמש להמשיך ניתן3

הקיימות מהמערכות בחלק

מסוים בספק התלות מפחית3

תהליך הטמעה מרובה שחקנים7

מצריך ניהול ההתאמות של7

המערכות השונות

מודל תמיכה מורכב יותר7

ממשקים בין המערכות7

דרישות שונות של תשתיות7

ITגישות בפיתוח אסטרטגיית

Best of Breed

15

PwC Israel

היכן שאלה נותנות BoBלתהליכי הליבה ושילוב מערכות ERPשימוש במערכת

(או בלעדי)מענה טוב יותר

הליבה תהליכי של סטנדרטיזציה3

אחיד מידע מקור על שמירה3

מתאימים ייעודיים פתרונות שילוב3

בהמשך מערכות להוספת גמישות3

תתכן שונות בדרישות התשתית7

י מספר ספקים"תהליך הטמעה ע7

מהיש להחליט בתחילת הדרך 7

לאומה ERP -ייכלל ב

ITגישות בפיתוח אסטרטגיית

Hybrid

16

©2013 Kesselman & Kesselman. All rights reserved.

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PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. Please

see www.pwc.com/structure for further details.

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This content is for general information purposes only, and should not be used as a substitute for consultation

with professional advisors.

!תודה

ח ירון חדוות"רו

PricewaterhouseCoopers Advisory Ltd.

Yaron.hedvat@il.pwc.com

054-4954728