Community IT Innovators. Established 1993. Serving social mission organizations with integrated technology services you can trust.

This is Part II of a two-part series on moving from a strategic planning to strategic management process. Rob Jackson is a Senior Consultant with Community IT Innovators.

Strategic management is a logical set of connected activities that enables the organization to make its strategy work. It is a process. It is not the result of a single decision or action. It is the result of a series of integrated decisions or actions that get measured over time.

For the purposes of this discussion, strategic management includes:

• Strategic planning
• Budgeting
• Performance management
• Strategic measurement
• Evaluation

Information Technology (IT) should have a role in all of these functions, and below we explain IT’s role in the strategic management process:

Strategic Planning
While IT professionals are not strategic planners, per se, IT professionals should be members of the strategic planning team and serve as technical resources during strategy formulation. Business strategies must be translated into short term operating objectives, data must be collected and aggregated for analysis against the plan, and eventually IT will be called upon to develop the systems that will institutionalize new attitudes and automate new patterns of behavior within the organization’s information systems.

Budgeting
To realize IT value, nonprofit organization should develop an IT budget with a three to four year horizon. It should include a list of all recurring IT costs related to Personnel, Contractors, Software, Hardware, Data and Telecommunications, as well as any re-occurring costs associated with maintaining the organizations IT portfolio.

The IT budget should be developed holistically with the expected funding levels from all departments, the organization’s calendar, the sequence of projects and respective timelines, and be mapped to the organization’s operational objectives. The organization’s leadership should look for common costs, reduce unnecessary expenses and work collaboratively with the IT staff to align the IT budget with the organization’s strategy.

Performance Measurement
From an IT perspective, performance measurement systems can provide a convenient and expedient method for organizations to summarize and report on critical measures for organizational success, but it is only a piece of the strategic management process. Performance management works to:

• Manage the implementation of agreed upon strategies
• Assess the performance of those strategies
• Reconcile inconsistencies and misalignments
• Formulate new and revised strategies

Strategic Measurement
Similarly, strategic measurement systems can facilitate the collection key performance data, but it is only a piece of the strategic management process. From an IT perspective, it differs from performance management because it:

• Continuously monitors the fit between the organization and the environment
• Tracks external trends and forces that are likely to affect the organization
• Develops information flows that shape internal and external communication
• Provides a clear vision for the type of organization the organization is striving to become
• Creates strategic agendas at various levels, and in all parts of the organization to ensure they become the driving force in all other decision making
• Guides the other management processes in an integrated manner to support and enhance these strategic agendas

Evaluation
From an evaluation perspective, IT must be involved in the process that identifies inputs and codifies all of the observable and measurable targets to ensure data quality. IT can also be used to help the organization track changes in value, condition and status regardless of the type of evaluation being employed.

In conclusion, the successful management of any organization’s strategy depends on the design, use and alignment of these functions to achieve the desired result. So, coordinating workflows, transferring relevant knowledge effectively from one part of the organization to another and achieving integration so as to meet organizational objectives are all ingredients for successful strategic management that can be achieved by using IT strategically.

Seventeen years ago, researchers at IBM concluded that the anticipated value of Information Technology (IT) investment was not being realized because there was a lack of alignment between business and IT strategy.

“IT is transcending its traditional ‘back office’ role and is evolving toward a “strategic” role with the potential not only to support chosen business strategies, but also to shape new business strategies. Yet, there is increasing concern that the anticipated value of the investment in IT is not being achieved … We argue that the inability to realize value from IT investments is, in part, due to the lack of alignment between the business and IT strategies of organizations. We view strategy as involving both formulation (decisions pertaining to competitive, product-market choices) and implementation (choice that pertain to the structure and capabilities of the firm to execute its product-market choices).” — IBM Systems Journal, March, 1993; by John C. Henderson, N. Venkatraman

Within the nonprofit sector, the inability to realize IT value is due to the low priority that nonprofit organizations place on IT strategy. Simply put, IT is not considered to be a strategic asset within the nonprofit sector and the staff that support the organization’s IT functions are rarely involved in the organization’s strategic planning process.

Realizing IT as a Strategic Asset
As the quote above suggests, technology within the nonprofit sector has grown beyond the back office to play a more strategic role within the organization. It has become essential to the successful implementation of strategies that facilitate and improve stakeholder and constituent outreach, data collection, information management, and outcome reporting, yet IT is still not considered to be a strategic asset within the organization. Technology influences the way nonprofit organizations govern themselves, structure themselves, communicate, build capacity, and scale their operations, yet IT is often an afterthought.

In today’s economy, there is a great need to help nonprofits control cost, minimize risk, and accelerate revenue growth. While there are a number of ways to accomplish these objectives, very few nonprofits have a plan that explicitly states the role technology can play in achieving these objectives. As Business IT consultants, we believe that many, if not all of the organization’s strategic initiatives can be enhanced by developing an understanding for what IT can do, setting the appropriate expectations about what IT can accomplish, and executing a strategic plan that is enabled by, and aligned with, the organization’s IT portfolio.

As Business IT consultants, we help organizations understand the possibilities of using IT to effectively achieve its mission, but we also help set appropriate expectations for what IT can do given the organization’s constraints. Yet between the possibilities and the expectations, we believe there is an extraordinary opportunity to help nonprofit organizations successfully execute desirable changes and enhance the capacity for future results by making IT a greater priority within the strategic planning process.

Simultaneous Planning and Doing
Our experience suggests that strategic success demands a simultaneous effort toward planning and doing, and successful strategic outcomes are best achieved when those responsible for the execution are also part of the formulation process. In most nonprofit organizations, IT is responsible for a great deal of the “doing” when implementing the organization’s strategy, but it does not have a prominent role within the strategic planning process. IT can inform strategy formulation during the planning process and begin to align the organization’s information management capabilities with the organization’s strategic objectives.

IT needs to have a more prominent role within the strategic planning process so that it can to help the organization move from strategic planning to strategic management.

This conversation will continue later this month in Part II which details the role of technology in strategic management. Rob Jackson is a Senior Consultant with Community IT Innovators.

“Business change is all about people.”  – We are really big fans of these words from Roger T. Burlton, an internationally recognized leader in business process change. He also expresses that business process changes must be managed holistically. We could not agree more.

Starting first with understanding where you are – what works, what is painful, what is stressful – establishes a baseline for the changes to make. In the discovery process we start exactly there, first understanding the “as is” picture and the people involved. It is important to draw on their wisdom on how things are, and are not, working. And then we work together to create a “to be” picture that involves changing the way some things are done. It is crucial to look at the priorities, and explore – can the organization use the technology already in place, in an improved manner (replacing the existing system is not always the answer)? Or maybe another solution is needed, and we look at how can that solution be integrated with back office systems (i.e. Accounting).

No matter what, as long as it is kept in mind that the change is all about the people (and the processes they use), there is hope for creating solutions that will make life easier for them, and help them focus on accomplishing what they do best.

People are an organization’s most important asset. We’ve all heard these words before. How is this translated really? Some leaders might say it’s the staff’s talents and special gifts, as well as experience, which are the asset. For some leaders, they appreciate that team members have the ability to learn and/or just simply follow instructions (which actually can go a long way to bringing about results).

In our interactions with various clients, whether they are local, national or international, and regardless of their mission, the value and reliance on highly talented people – and people who like to learn – is evident. It doesn’t stop there. There are some organizations which value their staff’s wisdom and find ways to draw on it authentically. This is something we highly support and encourage in our project approach.

Figuratively speaking, 90 – 95% of the answer to an organization’s problems, or desired innovations, is in the midst of the collective you – where the creativity and intelligence of multiple people across disciplines come together and do the hard work to find the answers. It sometimes requires having someone from the outside function as a source of creative tension and creative support for the group, and simultaneously provides a vital piece of missing expertise that helps complete the picture.

A lot of collective internal intelligence, with a little desire to ask for outside help, equates to the right synergy to find major answers. We know the synergy happens when we join with our clients in this way, and we have found ourselves in this place as well (we ask for outside help when we need it too).

Recently, several of us at CITI met with Paul King of Process Experts (and former CIO of the Bill & Melinda Gates Foundation). We knew there was a connection when we read his tagline, which reads “Integrating People, Process, & Technology,” which is a concept and the exact language we use at CITI in our own collateral material and conversations.

The conversation with Paul confirmed our notion that social mission organizations need an integrated, holistic, strategic approach to technology and that we should continue to offer our CITI as CIO approach to help organizations align their technology with their mission, make their existing operations more stable, and potentially reduce costs in the process.

At one point in the meeting, Paul said, “The biggest problem is that the people who know the technology are often brought in too late, rather than in the strategic planning phase.”

An organization’s leadership needs to be engaged in conversations and planning around technology.  A trusted technology adviser can help nonprofit leaders better understand how technology can solve their individual and organizational problems.

Another theme that came up in the conversation is the need for more information sharing and fewer silos both within an individual organization and between nonprofits. One real value-add that a CITI CIO could deliver is the cross-pollination and exchange of ideas, information, and best practices across nonprofits.  CITI serves as a community builder and connector, helping multiple organizations develop innovative solutions to common needs.

An article in the November 2009 issue of the Harvard Business Review on Galvanizing Philanthropy speaks to the challenges philanthropic investors face when choosing between initiatives. In the article, the authors recommend a process of getting clear, getting real, and getting better to maximize impact, and they highlight some of the strategic decisions these investors face. Information technology wasn’t explicitly mentioned in the article (though data played a significant role), but IT can frequently be a catalyst and tool to demonstrably increase organizational effectiveness – and thus investments.

Paul King is a CIO who has been having this discussion with investors and we look forward to joining him!

Managing 3rd-party software implementations, including a new Constituent Relationship Management (CRM) system, fundraising system, member management system, or any software that your organization is paying big dollars to a vendor for, is an opportunity for creative tension and creative solutions. You’ll find that the vendor’s implementation schedule provides the activities that they as a vendor need done for the product to be implemented. However, from your organization’s perspective, the system is part of an overall new way of operating as an organization, including redesigning your business processes and changing the way people work for the desired outcomes your organization is expecting for investing in such systems.

You have probably heard the 80/20 rule on these projects:  80% of a project’s success will depend on how effectively staff and key stakeholders adopt the new systems and processes, and 20% depends on the actually technology. Intentional approaches to planning and change-for people and processes-are crucial to the success of any technology project.

Such projects are also an opportunity for organizational development. Changes in behavior, which means changes in the way people think, are required because the way people work is going to change (regardless of how much folks like the change or not). There are a host of implementation activities to plan for and engage people in, including data conversion and validation, integration with other systems, case scenarios, testing (with gumption and friendly accountability), training that incorporates the new system and new processes, and preparing for the transition.

During transition, people might doubt the usefulness of process changes in conjunction with the new system, and there may be some confusion and a tendency to hold on to the former ways of thinking and doing things – old spreadsheets, the previous database, etc. During those first few days (and weeks) of using the new system, help ease the transition by talking about the way things were before, including inefficiencies and stress points, and by emphasizing the benefits of the new processes and systems.

Most importantly, persevere with moving forward to the new way of working and thinking and let go of those side spreadsheets and Access databases. When everyone is sharing responsibility and there is accountability for data integrity, the value of such changes can result in the ROI your organization is seeking – to achieve operational and reporting needs that the organization sought by implementing the new system. Everyone investing in the integrity of the data in the new system means everyone can trust the data, especially when you get that phone call requesting a report and you click a few buttons, have the report and can trust it is correct – such trust becomes priceless.