Welcome » IT Booklets » Management » IT Risk Management Process » Planning IT Operations and Investment » Strategic IT Planning
Strategic IT planning focuses on a three to five year horizon and helps ensure the institution's technology plans are consistent or aligned with its business plans. If effective, strategic IT planning can ensure delivery of IT services that balance cost and efficiency while enabling the business units to meet the competitive demands of the marketplace.
Strategic planning should address long-term goals and the allocation of IT resources to achieve them. Tactical plans outline specific steps and timetables to achieve the strategic goals. These should include hardware and software architecture, end-user computing resources, and any processing done by outside vendors. The strategic plan should address the budget, periodic board reporting, and the status of risk management controls.
The board of directors and management should consider a number of factors when planning the institution's use of technology, including:
All of these factors should also align with the organization's business plans. Well-implemented technology plans provide the capability to deliver business value in terms of market share, earnings, and capital growth to the organization. The information technology steering committee's cross-functional membership makes it well suited for balancing or aligning the organization's IT investment with its strategic and operational objectives. In fact, effective steering committees will constantly work to align the organization's information technology, both strategically and operationally with its business units. Typically, institutions that are better at keeping IT aligned with changing business goals and objectives are positioned to compete more effectively.
Some institutions will spend too aggressively on technology that business lines cannot fully utilize. Also, IT departments or business units can over invest in specific technology that provides inadequate enterprise-wide value, introduces new incompatibilities, or produces unnecessary excess capacity. On the other hand, institutions can spend too conservatively and delay investments in infrastructure or new products that business lines need to compete and maintain market share and profits. In addition, business units without a full understanding of the available technology can fail to update processes and products or to achieve productivity gains or increased revenues. The lack of knowledge may also result in increased security risks. To create the appropriate balance, institutions should link strategic and operational plans between IT and the business units.
The four key factors of IT planning that management should address are:
The board should oversee management's efforts to create and maintain an alignment between IT and corporate-wide strategies by: