6 ‘I’s Of Strategic Decision Making

Strategic Decision Making is a continuous process. There are various models for strategy generation (My Strategy Generation Model). But still a question that bothers us is - "How do we formulate and decide a strategy?"

I propose the following model for Strategic Decision Making. I prefer to refer to as "6I's of Strategic Decision Making"

My 6 I's are:

1. Identification of problem: During this stage the problem for which the strategic decision has to be made is identified. he output of this stage would be the problem statement.
   
   
2. Information processing: This is the stage where data gathering is done and information is processed. Referring to my model of strategy generation, this is the Strategic Assessment stage/phase. We analyze all external and internal factors, conduct appreciative enquiry and arrive at various objectives.
   
   
3. Identification of options: The identified objectives will act as an input for identifying various options. From IT strategy perspective this would be the second phase of my strategy generation model, SITP Planning Process (rather even the 4th and 5th Is are related to it).
   Otherwise for identifying any strategic option, the objectives will be analyzed to identify the various ways or options by which it can be accomplished. The focus should be on identifying as many options that may be possible.
   
   
4. Isolating a choice: After identifying various available options, the best one needs to be identified. There are various qualitative and quantitative techniques that may be used to isolate the choice. These methods would be discussed in my next post.This would also give measurable targets for the strategy or objectives.
   
   
5. Implementation: After the choice has been identified/isolated, the implementation plan has to be formulated. Mintzberg's Plan and Pattern will act as an catalyst for formulating the Implementation plan. Thereafter, steps for implementation of the plan is performed, which would include allocation of required resources. Thus, resources and capabilities of the organization will enable in eventual implementation.
   
   
6. Improvement via feedback: This is the feedback mechanism. Whether the implementation is inline with identified measurable targets or not is determined with regular feedback, gaps and corrective actions identified and implemented. Eventually when the required target is achieved, it would mean that the strategic decision has been able to successfully resolve the IT/business strategic problem.

It should be noted that strategic decision making is a cyclic process. Also, it may be possible that a strategic decision making for a new problem has to be initiated when one for the other is already at any stage of 6I. In such a situation we can find parallel implementation of 6I.

My 6Is of decision making can easily be related to the PDCA or Deming Cycle. Also, it should be observed that the problem statement referred to in this post is more of the business or IT issue or need that is in hand for which a strategic decision has to be made.

IT Strategy Generation: Preparing For Execution

My model for strategy generation is in extension to the OGC's model. My model consists of following phases/stages:

Strategic Assessment:
We analyze the internal and external factors. We are conducting a SWOT analysis to identify our Strengths, Weakness, Opportunities and Threats. But at the same time the model focuses on SOAR. Thus, Weaknesses and Threats through analyzed and acting as an input to the assertive enquiry, yet there is not a major focus on the findings. These finding are more from the perspective of 'keeping an eye on'. This ensure that the benefits of SOAR is being realized along with not missing the concern areas during assessment and strategy formulation.

Based on the assertive enquiry, analysis of external & internal factors and the business strategy itself, the objectives are established.

Measurement and success criteria for measuring the successful implementation of these objectives are determined for each objective identified.

Strategic IT Planning Process:
This is the stage during which Strategic IT Plan (SITP) is prepared. This is based on the Mintzberg's 5 Ps of Strategy. OGCs model refers to only 4 Ps, but I have included the 5th P (Ploy) as well, since IT can act as a major enabler or creator of a Ploy.

Eventualy the SITP is prepared, which has all the required details about the IT Strategy. This acts as an input to Service Portfolio process of ITIL V3 as well.

Model For Intergrating IT With Business

We have come across with the shift in focus from Business - IT Alignment to Business-IT integration in ITIL V3. Service Strategy phase of the lifecycle, specifically Strategy Generation (or Strategy Management) process, talks about this integration.

But a query in a practitioner's mind is always there - How to achieve this integration? I am presenting below a model, Business - IT Integration Model, which can help us with achieving this integration.

My model is in extension to the Business-IT alignment Framework (Proposed by: Henderson & Venkatraman).

My model takes into account the fact that traditionally:

• Business Strategy drives Business Infrastructure
  
• Business Strategy drives IT Strategy
• IT Strategy drives IT infrastructure
  

This dependency of IT strategy on business strategy is resulting in the short term IT strategy and goals. In other words this is making it impossible to have a long term IT strategy.

Predominantly in many organization IT is still being treated as a cost center . 'Actual' value proposition of IT to business remains unexplored. This is so since IT is entangled with short term or immediate requests of business on a daily basis and is struck with playing a support role.

Value proposition of IT can only be realized when IT partners the business. This is where my model highlights that:

• Business Strategy and Business Infrastructure drives each other: Strategy could be deliberate or emergent. In case of deliberate strategy, business infrastructure will provide the current state assessment and the defined business strategy will drive the business infrastructure that will be required to support it. On the other hand, although emergent business strategy may drive the business infrastructure but more often it would be the existing business infrastructure that would drive the business strategy.
  
• Business Strategy and IT Strategy drives each other: We know that traditionally IT strategy is based on the business strategy. These IT strategies are short term. But having a long term IT strategy will enable effective business strategy. Whenever any strategy is defined various options are available and these options are to be evaluated. A well defined IT strategy can have a major influence during this process. This is where the business strategy would be driven by IT strategy.
  
• IT Strategy and IT infrastructure drives each other: In the same way as business strategy and business infrastructure drive each other, IT strategy and IT infrastructure also drives each other.
  
• Business infrastructure and IT infrastructure drives each other: Traditionally IT infrastructure is based on the requirements to support IT strategy and business infrastructure. This is where business infrastructure drives IT infrastructure. But when IT infrastructure is futuristic ,based on the long term vision of IT (or IT strategy), it would have the features to support the business which business itself may not have thought of. Thus, it would start driving the business infrastructure.
  
• Evolution of Business/IT strategy and infrastructure is a continual process: The overall evolution of strategy and the infrastructure is a continual process and the continual improvement can be triggered internally by any of the four quadrants or externally (eg. competition, law, marketspace, etc.)
  

Service Level Manager & Incident Management

I have quiet frequently come across queries where I have been asked "what would be the involvement of a Service Level Manager in Incident Management?"

Predominantly following two views were put forth to me:
1) Service Level Manager is accountable and Incident Manager is responsible for incident resolution.
2) Service Level Manager is accountable as well as responsible for incident resolution.

I have a different view on this.

Incident Management process is owned by incident manager. So ensuring timely resolution of incidents is the accountability of incident manager and responsibility of its resolution lies with various support teams.

Service Level Manager is accountable for reporting the SLA and ensuring that the SLAs are met. Responsibility of its adherence would lie with the concerned process managers.

Thus, in case of an incident following would hold true:
1) Service Level Manager is 'Accountable' for SLA adherence
2) Incident Manager is 'Responsible' for SLA adherence
3) Incident Manager is 'Accountable' for incident resolution
4) Functional/technical teams are 'Responsible' for incident resolution

The escalation matrix ensures that after a certain time, if unresolved, incident is escalated to service level manager as well. This does not mean that accountability of incident resolution shifts to service level managers. Their involvement is triggered because accountability of SLA being breached lies with them. Co-ordination of various teams and ensuring that incident is resolved is managed by incident manager. In such a situation Service Level Managers involvement is predominantly "Consultive".

However, since in most of the organizations, individual in a Service Level Manager role is senior to the individual in Incident Manager role in hierarchy, their involvement in incident resolution changes from 'consulting' to 'managing'. This does not mean that Service Level Manager becomes accountable for incident resolution. Actually, in such a situation that individual is wearing the hat of 'Incident Manager'.

Letter from the author

Dear Readers,

My first title "Tackling Roadblocks During IT Implementation" is now available.

To unravel the mystries behind successful or failed IT implementation projects, buy my book today (Click Here)

I had been busy speaking at various forums to promote my book and hence there has not been any post from my side for quiet some time. I had a very interesting session at Project Management Institute, where I had delivered a session on "Managing ITIL/Process Consulting Engagements". I felt it would be something of relevance even in this forum. Thus, I am planning to come out with a series on what I had covered at PMI.

There has been some other interesting sessions at Computer Society of India, UKA University and Symbiosis.
Will be soon back with the next series for all of you.

Regards,

Sumit

Tackling Roadblocks During IT Implementation

Please promote the facebook page - Alethia Publishing. Kindly click "like".

Many IT implementation projects that organizations undertake get delayed. Some fail to meet the required objectives. No effort is made to identify the reasons behind the success or failure or delay of such engagements. This book unravels the rationale behind successful implementation as well as decodes the principle reasons for failure of IT projects. It covers detailed identification of key roadblocks faced during IT implementation projects. Consulting experience across a broad spectrum of industries is used to describe each of the roadblocks. The book has been written in four parts.

First part provides an introduction to the case on which the second part is based, along with the basic explanation of roadblocks and concerned parties.

In the second part, the book focuses on the case of a management institute along with relevant sample cases from various industries covering consulting, software and related IT/process implementation projects. These cases have been used to cite various roadblocks and the way they were addressed.

Third part has two case studies – one of a premier management institute for whom the ERP implementation was done and other of a Government organization for which a Personal Information System was implemented.

The fourth part provides an Ideal Implementation Model, which can be used as a base to implement any IT or consulting engagement across any industry. This part addresses key aspects like:

• Qualities of a good consultant
• How to constitute a consultant or development team
• Way a consultant can gain faith of the sponsor
• Issues related to implementation
• Sponsors should do to ensure a successful IT implementation and,
• He organizational change to ensure the same

This book is an attempt to unravel the rationale behind successful implementation as well as decode the principle reasons for failure of IT projects.

Characteristics & Attributes of a Process

Process Characteristics
Manageable
Measurable
Effective
Efficient
Triggered by a specific event


Process Attributes
Process will have following attributes:

• Goal (achieve a desired outcome)
• Activities
• People and/or machines
• Interaction between groups, people and/or machines

Process

Process
A process can be defined as a connected series of actions, activities, changes, etc. performed by agents with the intent of satisfying a purpose or achieving a goal.

A common misconception that people have about processes is that the processes are dependent on the tools. People from different quarters have put forth their concern related to the ‘dependency that process has on tools’ to me a number of times. Couple of them even argued to put forth their point. And this misconception existed even in the most experienced of the lots. On all these occasions it took quiet an effort from my side to make them understand that the processes are not dependent on the tools.

To put this misconception to rest I would repeat that Process is not dependent on tool. But on the contrary the tools are dependent on the processes. Tools acts as process enablers and they follow a certain defined process. A process can exist even without having a tool in place but a tool, whatever functionality it provides, will always be following a process.

Elements of a process:

• Process Agent: In order to deliver desired outputs reliably, process agents may include roles & responsibilities, tools, activities, procedures and work instruction.
• Process Enabler: Resources & capabilities required to perform the process.
• Process Control: Planning and regulating a process with the objective of performing the process in an effective and efficient way.

"What Is" And "What Is Not" A Process

Organizations do ‘things’ to achieve its objectives.

Example:

• Managing and handling IT support
• Handling procurement
• Designing new products and services
• Handling recruitment
  
• Others

‘Things’ are:

• Formed by logical and consistent set of organizational activities
• Focused on achieving a desired outcome
• Significantly large

Outcomes of the above example could be:

• Managing and ensuing that the issues/complaints are resolved within the defined time-lines (SLA) efficiently and cost effectively
• Getting the financial & technical details for an item required, identifying & finalizing the vendors, approval for procuring it, and finally procuring it from the selected vendor
• Identifying the new products and services for the market space, its key feature & customer requirements and designing the same
• Respond to the resource needs of the organization by identifying the candidates with right skill set, experience, capability and attitude

These ‘Things’ are processes.


Process is not

• Marketing and sales team
• Finance department
• HR department
• Procurement department
• Others

These are the organizational functions that contribute towards performing a process or an activity within a process.

Calculating SLA: Incident Management

Calculating the SLA adherence percentage for incidents seems to be a very simple task. But organizations struggle when they have to report on the same. One has to consider the open tickets, closed/resolved tickets and tickets that have breached the SLA.

Organizations have adopted different ways to calculate the SLA.

APPROACH I:

In Some organizations SLA is calculated based on the tickets they have resolved for the period. For example they have 10 tickets they have resolved of which 1 has breached the SLA, for them the SLA adherence would be 90%, i.e. they use the formula:
What they miss out here is that as a customer one would expect the breach to be reported in the report when the breach has actually happened and not when the breached ticket has been resolved. In this case SLA reporting gives all green whereas the reality is something different. This would also mean that in case one does not resolve the ticket that has breached the SLA, the SLA report will never reflect the same.


APPROACH II:
Another approach that organization takes is that they calculate SLA adherence based on the tickets resolved within the SLA and number of tickets created for that period. They use the formula:
In this approach although the SLA breaches are factored, yet the real picture is not presented as there would be tickets within the SLA that have not been resolved.


APPROACH III:
In yet another approach organization's calculate SLA adherence based on the tickets resolved within the SLA and number of tickets resolved for that period. They use the formula
In this approach although the SLA breaches are factored, yet again the real picture is not presented as there would be tickets that has breached the SLA and has yet not been resolved. Such tickets are not factored in the denominator.

Approach II and III will show a negative picture of the delivery as in both cases denominator tends to have a higher value.

There are other approaches similar to the ones discussed above used by organizations.

RECOMMENDED APPROACH:
When calculating SLA adherence, one has to factor the number of open tickets for a period, number of tickets that has breached the SLA and number of tickets carried forward from the previous reporting cycle. Considering these factors, I recommend the following formula:


In case one as to calculate SLA adherence for a particular period, start and end dates for the required period can be used instead of that for the week.

Strategic Management & ITIL

Previous posts have helped us in understanding Strategic Management.

We know that Strategic Management helps in shaping or defining the organizational strategy. Today business is dependent on IT. So the actual translation of organizational strategy into business benefits for any organization will happen only when its IT is able to support the same. This is where Service Strategy phase of ITIL V3 becomes important. Thus, there is a very strong link between Strategic Management and ITIL.

Strategic Thinking

Strategic thinking means asking, "Are we doing the right thing?" It requires three things:

• Purpose or end--a strategic thinker is trying to do something.
• Understanding the environment, particularly of the opponent, or opposing forces, affecting and/or blocking achievement of these ends.
• Creativity in developing effective responses to the opponent or opposing forces.

Successful Strategic Planning - Benefits

Some of the benefits of a successful strategic planning are:

• Leads to action
• Builds a shared vision that is values-based
• Is an inclusive, participatory process in which board and staff take on a shared ownership
• Accepts accountability to the community
• Is externally focused and sensitive to the organization's environment
• Is based on quality data
• Requires an openness to questioning the status quo
• Is a key part of effective management

Review of Strategy

You must keep the strategy under constant review, as part of the continuous task of monitoring organisational performance. You should consider:

• Is our 'vision' for the organisation still valid? Does our view of the desired future for the organisation match the pressures on us, the way our business is developing, and the changes that have taken place – and are likely to take place – in our business environment?
• Are the themes of our strategy still appropriate? Do we need to consider additional themes which should be added to the agenda for change, because of changed business circumstances, new technologies, pressures from the environment or changes in corporate capabilities? Are any of our strategic themes no longer relevant to the organisational agenda for change?
• What progress are we making in our strategic themes, and do we need to re-prioritize or replan to ensure that the rate of change meets our business requirements?

You must keep all these levels of strategy and planning under constant review:

• The strategic 'vision'.
• The route chosen towards the vision (the 'themes' of the strategy).
• The detailed plans for implementation.

Strategic Decisions

What constitutes a 'strategic' decision? 

A decision is likely to be strategic rather than tactical or operational if:

• The decision has major financial or other resource implications – for example, on staffing or equipment.

• The decision will involve a significant amount of change in the organisation.

• The decision will affect the whole organisation or a large part of it.

• The decision constrains or commits the organisation in significant respects for a long period of time.

• The decision will have a major impact outside the organisation – for example, on customers or other bodies.

• The decision entails significant risks to the business.

• The decision will involve major changes in the business of the organisation, such as the products or services it offers.

• The decision is related to other important decision areas, and raises issues of complexity and 'cross-cutting' interactions.

• It will be difficult or impossible to reverse the consequences of the decision.

If the organisation has to take a strategic decision unexpectedly, the decision will be taken and the strategy updated in parallel. A strategy is a guide to action, not a straitjacket; you should remain open to the need for changes in strategy when the business requires them.

Principles of Strategic Management

The strategic issues facing the organisation and its response to them will call on the organisation's skills in strategic management – its ability to recognise and deal successfully with strategic issues. In the public sector, these will include:

• Addressing the needs of the citizen, not the convenience of the organisation
• Greater efficiency and value for money
• Improved and innovative service delivery to the public
• Joined-up policy making
• Increased communication with customers and partners
• Greater local-central government coordination
• Improved performance and the implementation of Public Service Agreements
• Realisation of the government's e-government strategy (an enabling framework of key principles such as interoperability and supporting technical standards)

Although the strategy process may incorporate timetabled events which fit in to the wider management processes – such as the cycles of financial planning in the public sector – strategic management is a continuous process. Managers at all levels in the organisation may need to make decisions on business issues at any time, and some of these decisions could be regarded as 'strategic' – even though they may not appear so at the time. Any business-focused strategy must be flexible enough to accommodate the demands of continuous change.

Stakeholders in Strategic Management

Key Stakeholders are:

• Senior executives and business managers - they need to seek out opportunities for new ways of working that will help the organisation to realize the agenda for change in the public sector; they also need to be aware of the implications of realignment if the strategic direction is changed.
• Senior management responsible for reviewing and redefining the requirements for delivery of core services, and for acquiring the means to deliver them.
• Staff responsible for developing and reviewing the business strategy in their organisations; they need to appreciate the wider business context partners and other stakeholders affected by the strategy.

Effective Strategic Management

Characteristics of effective strategic management include:

• A clear business strategy and vision for the future.
• A strategic direction endorsed by senior managers, taking account of partners and other stakeholders.
• A mechanism for accountability (to the citizen in meeting their expectations, as well as to the centre in meeting policy targets).
• A framework for governance at several levels (government-wide down to internal reporting arrangements) that ensures you can coordinate everything (multiple goals) even when there are competing priorities and different goals.
• The ability to exploit opportunities and respond to external change (turbulence) by taking ongoing strategic decisions.
• A coherent framework for managing risk – whether it is balancing the risks and rewards of a business direction, coping with the uncertainties of project risk or ensuring business continuity.

Importance Of Strategic Management

Organisation need to be able to respond effectively to challenges – both problems and opportunities – as they arise. For example, the citizen has increasing expectations of service standards and availability. In response, organisations are working towards an outward-focused view of the way services should be provided - a fundamental shift from the traditional focus on internal concerns. At the same time, major opportunities for improvement may arise from developments such as new information and communications technologies, and the availability of additional financial resources such as the Invest to Save Budget. In many cases the response to the problem or opportunity will:

• Require the continuous attention of senior management.
• Affect most or the entire organisation.
• Have long term implications.
• Require substantial resources.
• Be interconnected with other issues and developments.

Strategic Management Process

PART - III

Organizational analysis can also be thought of as fourfold. How is the firm organized? What is the structure of the organization, who reports to whom, how are the tasks defined, divided and integrated? How do the management systems work, the processes that determine how the organization gets things done from day to day – for example, information systems, capital budgeting systems, performance measurement systems, quality systems? What do organizational members believe in, what are they trying to achieve, what motivates them, what do they value? What is the culture of the organization? What are the basic beliefs of organizational members? Do they have a shared set of beliefs about how to proceed, about where they are going, about how they should behave? 

We know, thanks to Peters and Waterman’s In Search of Excellence, that the basic values, assumptions and ideologies (systems of belief) which guide and fashion behavior in organizations have a crucial role to play in business success (or failure). What resources does the organization have at its disposal – for example, capital, technology, and people?

Management’s role is to try to ‘fit’ the analysis of externalities and internalities, to balance the organization’s strengths and weaknesses in the light of environmental opportunities and threats. A concept that bridges internal and external analyses is that of stakeholders, the key groups whose legitimate interests have to be borne in mind when taking strategic decisions. These can be internal groups, such as managers themselves and employees, or the owners of the firm, shareholders. They can also be external groups: the stock market if it is a quoted company, banks, consumers, the government.

Senior management’s task is to try and align the various interest groups in arriving at its chosen strategy in the light of the creation of an appropriate strategic vision for the organization. Increasingly important here is the issue of corporate responsibility, how the organization defines and acts upon its sense of responsibility to its stakeholders. The broad responsibility to society at large is important here in, for example, such areas as ‘green’ (ecological) issues. Sometimes the various interest groups may be at odds with each other and management will have to perform a delicate political balancing act between them.

Having chosen a strategy, there is the issue of implementation. Very few schemes go totally (or even approximately) according to plan. The business environment changes, new issues emerge – green ones, for example. Some demand to be taken on board so that in many, perhaps the majority, of cases emergent strategy asserts itself to the extent that the realized strategy differs markedly from the chosen/planned strategy. In time, the realized strategy becomes a part of the firm’s strategic history . . . and the strategy process continues.

Strategic Management Process

PART - II

If change is the order of the day, then two issues need to be addressed: environmental (external) analysis and organizational (internal) analysis (This is the ideal way of proceeding. In practice, managers may adopt only a partial solution and analyze only external or internal factors.). For a change of strategy to work there must be alignment between internal capability and external opportunity.

This is described as ‘strategic fit’. The ideal situation is where there is a fit between the environments, a business need arising out of that environment that is strongly felt by a firm that has the sense of purpose (mission) and a management system that enables it to respond to this need with a coherent and practicable strategy. The potential to act in this way depends upon managerial judgments, managerial skill to exploit windows of opportunity and management ability to motivate other employees to support and commit themselves to the firm’s new strategic objectives. 

The analysis of the environment can be segmented into four interactive elements. There is the issue of the firm’s general environment, the broad environment comprising a mix of general factors such as social and political issues. Then there is the firm’s operating environment, its more specific industry/business environment. What kind of industry is the firm competing in? What ‘forces’ make up its ‘industry structure’? Having examined its business environment, the issue then arises: how is the firm to compete in its industry? What is to be the unique source of its competitive positioning that will give it an edge over its competitors? Will it go for a broad market position, competing on a variety of fronts, or will it look for niches? Will it compete on the basis of cost or on the basis of added value, differentiating its products and charging a premium? What is the range of options that managers have to choose from? How are they to prioritize between these options? Does the company have strategic vision, a strong sense of mission, a ‘reason for being’ that distinguishes it from others? If change is necessary, what is to be the firm’s direction for development? Having identified the major forces affecting its environment, how is the firm to approach the future?

(Cont...)

Strategic Management Process

PART - I

If a firm chooses a particular strategic direction and it works in the way that very successful firms like IBM or, on a smaller scale, Body Shop have, the fact that it is successful does not mean that the choice of strategy was optimal and that it was the best. There might have been another strategic decision that could have led to even greater success. Conversely, if a firm makes a choice that leads to disaster, this does not necessarily mean that it could have made a better choice (though, with better decision making, it hopefully could have averted the disaster). The environmental conditions in its industry might have been such that this was the best choice, but that no choice, given its size or history, or the power of its competitors, could have changed its fate.

Current strategy has its roots in the strategic history of a firm and its management and employees. Both management and employees has been mentioned here because, though in many cases senior management is the source of strategic decisions, it is the employees at the point of production or delivery of a product or service who are responsible for the actual implementation of a strategy. (Of course, in the final analysis it is management who are ultimately responsible for the performance of employees.) Current strategy is the result of the interaction of intended strategy and emergent strategy. The organization’s actual strategy (its realized strategy) can be the direct result of strategic planning, the deliberate formulation and implementation of a plan. More often it is the outcome of the adaptation of such a plan to emergent issues in the environment. In some cases actual strategy can be very different from the strategy as planned or the firm may not have a very clear plan in the first place. In such cases the strategy can be described as emergent in the sense that strategy emerges from an ongoing series (sometimes described as a pattern or stream) of decisions.

Managers can decide that they are happy with their current strategy. They can take this decision in two ways. In a proactive sense they can scan their environment and the potential for change within their own organization and decide that to carry on doing what they are doing and what they are good at is the best way to face the future. In a less active, and far less satisfactory, way they can proceed on the basis of tradition – ‘This is the way we have always done it. It has worked so far. That’s good enough for us’ – or inertia. Or management may decide that change is necessary. Again this can come about in a variety of ways. They may scan their environment and decide that there are major changes occurring in their business world to which they have to adapt. Or they might decide, through internal analysis, that they have the ability to develop a new way of doing business that will redefine the nature of the business they are in. Another stimulus to change can be the new manager appointed to a senior position who wants to leave his or her mark on the company and changes strategy primarily for this self-centered reason.

(Cont...)

Understanding Strategic Management

Strategic management is a dynamic process of aligning strategies, performance and business results; it is all about people, leadership, technology and processes. Effective combination of these elements helps in providing strategic direction and successful service delivery. It is a continuous activity of setting and maintaining the strategic direction of the organisation and its business, and making decisions on a day-to-day basis to deal with changing circumstances and the challenges of the business environment. In other words strategic management can be defined as the application of strategic thinking to the job of leading an organization. 

As part of strategic thinking about advancing the business, one has to set a course for a particular direction, but subsequent policy drivers (such as new performance targets) or business drivers (such as increased demand for services) could take the organisation in a different direction. There could be implications for accountability when one has to decide whether to take corrective action to get back on course or to go with the new direction. Similarly, there could be implications for governance if relationships between the partners/directors change.

We can say that strategic management means continually asking the question, "Are we doing the right thing?" Strategic management is focused on the future within a context of a changing, but relatively predictable environment. 

Strategic management consists of the following three activities and decisions:

1. Formulation of the future mission of the organization in light of changing external factors such as regulation, competition, technology and customers;

2. Development of a competitive strategy to achieve the mission; and

3. Creation of an organization structure which will deploy resources to successfully carry out its competitive strategy. 

That is, it requires attention to the "big picture" and a willingness to adapt to changing circumstances.

What is 'Strategy'?

The term ‘strategy’ proliferates in discussions of business. Scholars and consultants have provided myriad models and frameworks for analysing strategic choice. The key issue of strategy is a clear sense of an organization’s objectives and a sense of how it will achieve these objectives. It is also important that the organization has a clear sense of its distinctiveness.

For the leading strategy guru, Michael Porter (1996), strategy is about achieving competitive advantage through being different – delivering a unique value added to the customer, having a clear and enactable view of how to position yourself uniquely in your industry, for example, in the ways in which Deccan Airways had positioned itself in the airline industry as a low cost airlines.

To enact a successful strategy requires that there is fit among a company’s activities, that they complement each other, and that they deliver value to the firm and its customers. The Deccan Airways example just mentioned illustrate that industries are fluid. It came to prominence by taking on industry incumbents and developing new value propositions. Also, one must reckon that success is not guaranteed.

While there is much debate on substance, there is agreement that strategy is concerned with the match between a company’s capabilities and its external environment. Analysts disagree on how this may be done. 

John Kay (2000) argues that strategy is no longer about planning or ‘visioning’ – because we are deluded if we think we can predict or, worse, control the future – it is about using careful analysis to understand and influence a company’s position in the market place. 

Another leading strategy guru, Gary Hamel (2000), argues that the best strategy is geared towards radical change and creating a new vision of the future in which you are a leader rather than a follower of trends set by others.

We can say with certainty that: "winning strategy = foresight vision"

Key ITIL Processes For Cloud Computing: Service Provider Perspective (Internal Facing) - Request Fulfillment

ITIL and Cloud Computing Series - Part 17

Request fulfillment is the process responsible for fulfilling service requests. Such requests are simply provisioned. These requests does not go through a formal change approval cycle.

But in cloud environment, the requests for addition, modification or deletion/removal of the existing capacity or resource has to be done in real time. Such requests are raised by the customer and provisioned without any change approval cycle. The request fulfillment team has to ensure that such requests are received in a complete manner and all required approvals, if any, from the customer side is provided along with the request.

Key ITIL Processes For Cloud Computing: Service Provider Perspective (Internal Facing) - Financial Management

ITIL and Cloud Computing Series - Part 16

With cloud computing the 'Unit' of charging has to be defined as charging is based on resource utilization, transactions, etc. Cost has to be properly allocated to different customers to ensure effective accounting and charge-back. Also, effective budgeting process would be required as all investments has to be strongly justified. The process has to be capable to provide details on return on investment (RoI) and total cost of ownership (TCO) of cloud services.

Key ITIL Processes For Cloud Computing: Service Provider Perspective (Internal Facing) - Capacity Management

ITIL and Cloud Computing Series - Part 15

In the previous post I had discussed about the sudden surge in demand. The sudden surge in demand has to be fulfilled. Thus, the service provider has to ensure the availability of sufficient capacity. Not only that they have to maintain a balance between the utilized and excess capacity. Excess capacity would mean wastage of investment while the over utilized capacity reflects a potential threat for performance degradation. So capacity management and forecasting becomes a very complex and critical activity.

Capacity management has to be tightly integrated with supplier management process.

Key ITIL Processes For Cloud Computing: Service Provider Perspective (Internal Facing) - Demand Management

ITIL and Cloud Computing Series - Part 14

In a cloud environment there can be a sudden surge in demand. The probability of the surge will be much higher in public cloud. The provider has to be ready to provision such demands. Thus, effective mapping of demand trend and patterns of business activity (PBA) for every customer is required. The analysis of PBA and trend analysis will help in addressing the change in demand pattern. Also, this will help in identifying the ways to influence demand. A close linkage with capacity management and financial management is needed.

Key ITIL Processes For Cloud Computing: Service Provider Perspective (Internal Facing) - Service Asset & Configuration Management

ITIL and Cloud Computing Series - Part 13

Friends, first of all I am extremely sorry for being 'offline' for a considerable amount of time. I am continuing this series from where I had left.

SACM can be said to be the "heart" of ITSM. Any IT organization is dependent on accurate CMDB and Configuration Management System (CMS) for information. Each IT component of a cloud infrastructure has to be registered in the CMDB along with a well defined relationship. These IT components would be responsible for supporting many customers of the Cloud service Provider. So a failure of a single component has the potential to have a severe impact on many customers and thus the service provider.