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Implementing a bank-wide strategic planning process and introducing an information technology planning process to align with bank strategy |
In the late eighties the South African Reserve Bank launched an initiative to introduce top- down and bank-wide strategic planning processes. To facilitate the introduction of the processes, a strategic management business unit was established. The team worked primarily with the governors and senior management of the Bank.
Following the successful completion of the bank-wide strategic planning process the Information Technology function aligned its strategies and operations to those of the Bank, by introducing its own information technology (IT) planning process. The IT process leveraged off the strategic direction set by the Governors and respective Departmental Executive Committees.
The bank-wide strategic planning process
The initiative to implement strategic planning was aimed at creating a strategic framework for the bank and introducing strategic management disciplines to the bank.
Philip Tromp and a senior manager from the Human Resources area, Dr Francois van Pletsen, were assigned to set up a functional unit to design and implement strategic management in the bank. They acted as internal consultants empowered by the Governor.
The consultants adopted a collaborative approach, facilitating workshops with the Governors and the management teams of each department.
In essence the approach was to start with the fundamental question: What is the purpose / reason for the existence of this organisation, i.e. the bank / department or business unit? Thereafter brainstorming on the core values of the organisation, the functions, the strategic objectives, etc followed.
The results achieved were, inter alia, the following:
- An awareness, across the bank, of the role, objectives and value system of the organisation
- A new corporate profile – mission, values statement and logo
- A functional structure of the organisation
- Strategic directives for key business areas
- Departmental missions, value statements, strategic objectives, organisational structures and strategies
The revision of the strategic plans became an annual event and acted as trigger for the annual operational planning and budgeting processes.
The alignment of the IT function
The strategic management process introduced earlier created the ideal scenario for the supporting units in the bank to position themselves to serve the organisational goals in an optimal fashion.
The Information Technology function, in particular, used the opportunity to create an IT planning process to align its IT services with the objectives of the organisation.
In essence the process entailed using the strategic frameworks of the bank as a whole and each of the departments, to develop an IT plan for each department. The IT plan for each department consisted of –
- A departmental IT strategy indicating its main IT related initiatives.
- A projects portfolio consisting of projects in progress as well as new projects required.
- An equipment inventory as well as a list of new requirements.
- A services inventory plus new services required.
The costs associated with the projects, equipment and services were estimated and also provided as part of the plan. These costs also formed part of the departments' operational budget as the annual cost of its IT utilisation.
Once the IT plans of each department were accepted by their management, the bank-wide consolidation process started. In this process the IT plans of the various departments were consolidated into IT plans for the bank as a whole, namely -
- A projects portfolio
- An equipment inventory
- A services inventory
Taking the above into consideration the final step was to produce a consolidated infrastructure plan depicting the derived infrastructure requirements to service the requirements of the bank, as a whole. The capital and operational expenditure to implement the infrastructure plan was calculated, covering technology, people and services costs.
In order to prioritise projects, executives from the various departments participated in a joint project prioritisation workshop to argue the merits of continuing their current projects and commencing with any new projects, in competition with those of other departments. The meeting concluded with a list of projects that would be put forward as part of the bank-wide plan and the respective departmental plans were adapted accordingly.
In the process of finalising the IT plan and approving the operational budget, each department head had to justify his/her stated requirements and obtain authorisation from the Governors. The final decisions regarding the IT utilisation of each department were communicated back to the IT function for adjustment of the consolidated plans and budget.
The following results were achieved:
- The alignment of IT and the business objectives of the organisation
- An awareness of IT utilisation and associated costs and effort
- An appreciation of the value of IT to the organisation
- The involvement of line management in IT decision-making and prioritisation of work
- Improved internal management and planning in the IT department
- Justification for IT expenditure and IT function's personnel complement
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