Forming an Information Strategy
I – General Strategy	II – Situational Analysis	III – Completing the Strategy

This article is the final of three which address how to formulate an Information Strategy. I have written a number of other articles which touch on this subject ^[1] and have also spoken about the topic ^[2]. However I realised that I had never posted an in-depth review of this important area. This series of articles seeks to remedy this omission.

The first article, Part I – General Strategy, explored the nature of strategy, laid some foundations and presented a framework of questions which will need to be answered in order to formulate any general strategy. The second, Part II – Situational Analysis, explained how to adapt the first element of this general framework – The Situational Analysis – to creating an Information Strategy. In Part I, I likened formulating an Information Strategy to a journey, Part III – Completing the Strategy sees us reaching the destination by working through the rest of the general framework and showing how this can be used to produce a fully-formed Information Strategy.

As with all of my other articles, this essay is not intended as a recipe for success, a set of instructions which – if slavishly followed – will guarantee the desired outcome. Instead the reader is invited to view the following as a set of observations based on what I have learnt during a career in which the development of both Information Strategies and technology strategies in general have played a major role.
 
 
A Recap of the Strategic Framework

I closed Part I of this series by presenting a set of questions, the answers to which will facilitate the formation of any strategy. These have a geographic / journey theme and are as follows:

1. Where are we?
2. Where do we want to be instead and why?
3. How do we get there, how long will it take and what will it cost?
4. Will the trip be worth it?
5. What else can we do along the way?

Part II explained the process of answering question 1 through the medium of a Situational Analysis. It is worth pointing out at this juncture that the Situational Analysis will also naturally form the first phase of the more lengthy process of gathering and analysing business requirements. For the purposes of the rest of this article, when such requirements are mentioned, they are taken as being the embryonic ones captured as part of the Situational Analysis.

In this final article I will focus on how to approach obtaining answers to questions 2 to 5. Having spent quite some time considering question 1 in the previous chapter, the content here will be somewhat briefer for the remaining questions; not least as I have covered some of this territory in earlier articles ^[3].
 
 
2. Where do we want to be instead and why?

My thoughts here split into two sub-sections. The second, What does Good look like?, is (as will be obvious from the title) more forward looking than backward. It covers reasons why the destination may be worth the journey. The first is more to do with why staying in the current location may not be a great idea ^[4]. However, one motivation for not staying put is that somewhere else may well be better. For this reason, there is not definitive border between these two sub-sections and it will be evident from the text that they instead bleed into each other.

2a. Drivers for Change

People often say that the gains that result from Information Programmes are intangible. Of course some may indeed be fairly intangible, but even the most ephemeral of these will not be entirely immune from some sort of valuation. Other benefits, when examined closely enough, can turn out to be surprisingly tangible ^[5]. In making a case for change (and of course the expenditure associated with this) it is good to try to have a balance of tangible and intangible factors. Here is a selection which may be applicable:

Internal IT drivers

• These often centre around both the cost and confusion associated with a fragmented and inconsistent Information Landscape; something which, even as we head in to 2015, is still not atypical.
• Opportunity costs may arise from an inability to combine data from different repositories or to roll up data to cover an entire organisation.
• There is also a case to be made here around things like the licensing costs that result from having too many information repositories and too many tools being used to access them.
• However, the cost of remediating such fragmentation can often appear in the shape of additional IT headcount devoted to maintaining a complex landscape and additional business headcount devoted to remediating information shortcomings.

Productivity gains

• Less number crunching, more business-focussed analysis. Often an organisation’s most highly qualified (and highly paid) staff can spend much of their time repeating quotidian tasks that computers could do far more reliably. Freeing up such able and creative people to add more business value should be an objective and should have benefits.
• At one company I estimated that teams would spend 5-7 days assembling the information necessary to support a meeting with one of a number of key business partners or a major client; our goal became to provide the same information effectively instantaneously; these types of benefits can be costed and also tend to resonate with business stakeholders.

Increasing sales / improving profitability

• All information programmes (indeed most any business activity) should be dedicated to increasing profitability of course. In some specific industries the leverage of high-quality information is more readily associated with profitability than others. However, with enough time spent understanding the dynamics of an organisation, I would suggest that it is possible to make this linkage in a credible manner in pretty much any industry sector.
• With respect to sales, sometimes if you want to increase say cross-selling, a very effective way is simply to measure it, maybe by department and salesperson. If there is some reliable way to track this, improvements in cross-selling will inevitably follow.

Mitigating operational risk

• More reliable, unbiased and transparent production of information can address a number of operational risks; what these are specifically will vary from organisation to organisation.
• However, most years see some organisation or another have to restate their results – there have been cases where adding two figures rather than subtracting them has led to a later restatement. Cases can often be built around the specific pain points in an organisation, or sometimes even near misses that were caught at the 11th hour.
• Equally the cost of checking and re-checking figures before publication can be extremely high.

It is also generally worth asking business users what value they would ascribe to improved information, for example what things could they do under new arrangements that they cannot do now? It is important here that any benefits – and in particular any ones which prove to be intangible – are expressed in business language, not technical jargon.

2b. What does Good look like?

Answering this question is predicated on both experience of successful information improvement programmes and a degree of knowledge about the general information market. There are two main elements here, what does good look like technically and what does it look like from a process / people perspective.

To cover the technical first, this is the simpler area, not least as we have understood how to develop robust, flexible and highly-performing information architectures for at least 15 years.

The basics are shown in the diagram above ^[6]. Questions to consider here include:

• What would a new information architecture look like?
• What are the characteristics of the new which would indicate that it is an improvement on the old, can these be articulated to non-technical people?
• What are required elements and how do they relate to the high-level needs captured in the Situational Analysis?
• How does the proposed architecture relate to incumbent technologies and current staff skills?
• Can any elements of existing information provision be leveraged, either temporarily or on an ongoing basis?
• What has worked for other organisations and why would this be pertinent to the organisation in question?
• Are any new developments in technology pertinent?

Arguably the more important area is the non-technical. Here there is a range of items to consider, some of which are captured in the following exhibit ^[7]:

I could spend an separate set of articles commenting on the elements of the above diagram; indeed I already have and interested readers are directed to the footnotes for links to some of these ^[8]. However it is worth pointing out the critical role to be played by both user education (a more apt phrase than training) and formal Data Governance. Also certain elements of information tend to work well when they sit within a regular business process; such as a monthly or quarterly review of specific aspects of results and future projections.
 
 
3. How do we get there, how long will it take and what will it cost?

3a. Outline an Indicative Programme of Work

I am not going to offer Programme Planning 101 here, but briefly the first step in putting together an indicative programme of work is to decompose the overall journey into chunks, each of which can then be estimated. Each chunk should cover a group of reports / analyses and include activities from requirements gathering through to testing and finally deployment ^[9]. For the purposes of an indicative programme within a strategy document, the strategist can rely upon both information gathered in the Situational Analysis and their own experience of how to best decompose such work. Ultimately the size and number of the chunks should be dictated by business need, but at this stage estimates can be based upon experience and reasonable assumptions.

It is important that each chunk (or sub-chunk) delivers value and offers an opportunity for the approach and progress to be reviewed. A further factor to consider when estimating these chunks is that they should be delivered at a pace which allows them to be properly digested by users; resource allocations should reflect this. For each chunk the strategist should consider the type and quantum of resource required and the timing with which these are applied.

The indicative programme plan should also include a first phase which relates to reviewing the plan itself. Forming a strategy involves less people than running a programme. Even if initial estimation is carried out very diligently, it is likely that further issues will emerge once more detailed work later commences. As the information programme team ramps up, it is important that time is allocated for new team members to kick the tyres on the plan and make recommendations for improvement.

3b. How much will it cost?

A big element of cost estimates will be a by-product of the indicative programme plan, which will cover programme duration and the amount of resource required at different points. Some further questions to consider when looking to catalogue costs include the following:

• What are baseline costs for current information provision?
• To what degree to these need to be incurred in parallel to an information improvement programme, are there ways to reduce these legacy costs to free up funds for the central programme?
• What transitional costs are needed to execute the Information Strategy?
  • Hardware and software: is change necessary?
  • People: what is the best balance between internal, contract and outsourced resources, to what degree can existing staff be leveraged without compromising their current responsibilities?
  • How will costs vary by programme phase, will these taper as elements of older information systems are replaced by new facilities?
  • Can costs be reduced by having people play different roles at different points in the programme?
• What costs will be ongoing once the strategy has been executed?
• How do these compare to the current baseline?
• Sometimes one aim of an Information Strategy will be to reduce to cost of ongoing support and maintenance, if so, how will this be achieved and how will any transition be managed?

A consideration here is whether the most important thing is to maximise speed of delivery or minimise risk? Things that will reduce risk could include: initial exploratory phases; starting with a small number of programme resources and increasing these based only on success; and instigating appropriate governance processes. However each of these will also increase duration and therefore cost. In some areas a trade off will be necessary and which side of these equations is more important will vary from organisation to organisation.
 
 
4. Will the trip be worth it?

Answering parts of question 2 will help with getting a handle on potential benefits of executing an Information Strategy. Work on question 3 will get us an idea of the timeframes and costs involved. There is a need to combine the two of these into a cost / benefit analysis. This should be an honest and transparent assessment of the potential payback of adopting the Information Strategy. Given that most Information Strategies will take more than a year to implement and that benefits may equally be realised on an ongoing basis, it will generally make sense to look at figures over a 3-5 year period. It may be possible to draw up a quasi-P&L statement showing the impact of adopting the strategy, such an approach can resonate with senior stakeholders.

Points to recall and questions to consider here include:

• Costs will emerge from the Indicative Programme Plan, but remember the ongoing costs of maintaining existing information capabilities.
• As with most initiatives, the benefits of information programmes split into tangible and intangible components:
  • Where possible make benefits tangible even if this requires a degree of guesstimation ^[10].
  • Remember that many supposed intangibles can be estimated with some thought.
• What benefits have other companies seen from similar programmes, particularly ones in the same industry sector?
• Is it possible to perform “what if?” scenarios with current and future capabilities; could better information could have led to better outcomes? ^[11]
• Ask business people to estimate the impact of better information.
• Intangible benefits resonate where they are expressed in clear business language, not IT speak.

It should be borne in mind here that the cost / benefit analysis may not add up. If this is the case, then either a less expensive approach is more suitable for the company, or the potential benefits need to be looked at again. Where progress can genuinely not be made on either of these areas, the responsible strategist will acknowledge that doing nothing may well be the logical approach for the organisation in question.
 
 
5. What else can we do along the way?

Finally, it is worth noting that short-term tactical deliveries can strongly support a strategy ^[12]. Interim work can meet urgent business needs in a timely manner. This is a substantial benefit in itself and also evidences progress in the area of improving information capabilities. It also demonstrates that that the programme team understands commercial pressures. This type of work is also complementary in that it can be used to:

• Validate some elements of the cost / benefit analysis.
• Round out requirements gathering.
• Highlight any areas which have been overlooked.
• Provide invaluable deployment and training experience, which can be leveraged for the implementation of more strategic capabilities.

It can also be useful make mistakes early and with small deliverables, not later with major ones. For these reasons, it is suggested that any Information Strategy should embrace “throw away” work. However this should be reflected in the overall programme plan and resources should be specifically allocated to this area. If this is not done, then tactical work can easily overwhelm the team and prevent progress on more strategic areas from being made; generally a death knell for a programme.
 
 
A Recap of the Main Points

1. Carry out a Situational Analysis.
2. As part of this, start the process of capturing High-level Business Requirements.
3. Establish Drivers for Change, what benefits can be realised by better information, or by producing information in a better way?
4. Ask “What Does Good Look Like?”, from both a technical and a process / people point of view.
5. Develop an Indicative Programme of Work with realistic resource estimates and durations.
6. Estimate Current, Transitional and Ongoing Costs.
7. Itemise some of the major Interim Deliverables.
8. Create a Cost / Benefits Analysis.

 
Bringing everything together

There is a need to take the detailed work described over the course of the last three articles and the documentation which has been created as part of the process and to distill these down into a format that is digestible by senior management. There is no silver bullet here, summarising screeds of detail in a way that preserves the main points and presents them in a way that resonates is not easy. It takes judgement, an understanding of how businesses operate and strong analytical, writing and often diagrammatic skills. These will not be acquired by reading a blog article, but by honing experience and expertise over many years of work. To an extent, producing relevant and cogent summaries is where good IT professionals earn their money.

Unfortunately, at the time of writing, there is no book entitled Summarising Complex Issues for Dummies ^{[13], [14]}.

This article and its two predecessors have been akin to listing the ingredients required to make a complex meal. While it is difficult to make great food without good ingredients or with some key spice missing, these things are not sufficient to ensure culinary excellence; what is also needed is a competent chef ^[15]. I cook a lot myself and, whenever I try a recipe for the first time, it can be a bit fraught. Sometimes I don’t get all of the elements of the meal ready at the same time, sometimes while I’m paying attention to reading the instructions for one part, another part boils over, or gets burnt. These problems with cooking tend dissipate with repetition. In the same way, what is generally needed in developing a sound Information Strategy is the equivalents great ingredients, a competent chef and an experienced one as well.
 

Forming an Information Strategy
I – General Strategy	II – Situational Analysis	III – Completing the Strategy

 
Notes

[1]	These include (in chronological order): Scaling-up Performance Management Developing an international BI strategy “Involving users in Business intelligence Strategy key for success” – Christina Torode on SearchCio-Midmarket.com A single version of the truth? A bad workman blames his [Business Intelligence] tools
[2]	IRM European Data Warehouse and Business Intelligence Conference – November 2012
[3]	Where this is the case, I will of course provide links back to my previous work.
[4]	Some of the factors here may come to light as a result of the previous Situational Analysis of course.
[5]	I grapple with estimating the potential payback of Information Programmes in a series of earlier articles: Measuring the benefits of Business Intelligence   – this is one of the most frequently read articles on this site   Using historical data to justify BI investments – Part I Using historical data to justify BI investments – Part II Using historical data to justify BI investments – Part III   – this series of articles presents a specific example drawn from Insurance, but the general approach can be adapted to fit other industry sectors
[6]	This is an expanded version of the diagram I posted as part of Using multiple business intelligence tools in an implementation – Part I back in May 2009. I have elided details such as the fine structure of the warehouse (staging, relational, multidimensional etc.), master data sources and also which parts of it are accessed by different tools and different types of users. In a severe breach with the traditional IT approach, I have also left some arrows out.
[7]	This is an updated version of an exhibit I put together working with an actuarial colleague back in 2001, early in my journey into information improvement programmes.
[8]	These include my trilogy on the change management aspects of information programmes: Marketing Change Education and cultural transformation Sustaining Cultural Change and a number of articles relating to Data Governance / Data Quality, notably: Using BI to drive improvements in data quality Who should be accountable for data quality?
[9]	Sometimes the first level of decomposition will need to be broken up into further and smaller chunks with this process iterating until the strategist reaches tasks which they are happy to estimate with a degree of certainty.
[10]	It may make sense to have different versions of the cost / benefit analysis, more conservative ones including only the most tangible benefits and more aggressive ones taking in to account benefits which have to be somewhat less certain.
[11]	Again see the series of three articles starting with Using historical data to justify BI investments – Part I.
[12]	For further thoughts on the strategic benefits of tactical work see: Vision vs Pragmatism Holistic vs Incremental approaches to BI Tactical Meandering Incremental Progress and Rock Climbing
[13]	Given both the two interpretations of this phrase and the typical audience for summaries of strategies, perhaps this is a fortunate thing.
[14]	I did however find the following title:
[15]	Contrary to the image above, a muppet (in the English sense of the word) won’t suffice.

 

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