As a leader in IT or Data there is always more to do than time available. We prioritise deciding what moves onto the soon but not yet pile. I found that the IT Strategy or Data Strategy often got stuck on this deprioritised pile. Sometimes until it was too late. What should be driving the priority of the strategy to move it into the active todo list?
For me, I want to prioritise just in time for when the strategy will be needed. The key moment for the strategy has to be in the budget cycle. Using the arguments from the strategy to underpin our budget requests for the next financial year.
Why this close connection between strategy and budget? The strategy is a vision and perspective of where the department must get to with a plan of action to achieve this. The plan will both cost money to execute and impact the future operational costs of the department. It is unlikely the initiatives recommended from the strategy will be shared across business functions or capatalised. They will be seen as part of the department’s budgeted cost.
Having the strategy ready for the budget conversations protects the plan, by giving us the best change to get it funded. The strategy initiatives will be considered discretionary operational costs. Even at this budgeting stage an outline business case must justify the imperative of this work. The strategy should have already provided that, making budget drafting straightforward. Of course for large project or transformations there will still be more business case work done as we get closer to starting the initiative, but not normally for the budget submission.
The strategy is normally driving any step change in committed operational costs. The main focus of the strategy is the departments capability. Often that means skills and headcount, one of the key areas of committed operation costs and normally the highest degree of critical review during the budget submission. The strategy and it’s analysis provide the arguments to justify these changes in committed spend. Having this in time for our budget submissions means we have the resources to fulfil the strategy vision.
Budget submission always seems to be earlier that I expected. The expectation setting of the budget is often incredible early in the year. Certainly by the time we are thinking about the second half forecast we are already shaping out what the following financial year will look like. Then generally early in the final quarter the review of budget submision and finalisation is done. Our strategy should be ready for the second half forecast in the fith month of the year, if we are not to misout on the opportunity.
To hit a target of the fith month of the financial year I would start updating the strategy at the start of the second quarter at the latest. This depends a little on your bandwidth and the approval cycle for the strategy. I have worked in one organisation where it took me four months to get through the reviews of the strategy with the leadership and stakeholders. That is an exception. We should be able to update the strategy in eight to ten weeks.
Major changes to strategy come along from time to time. These are going to require more conversation, research and time. Perhaps it is the first strategy the department has had in a few years, or the business has gone through a major restructure. In these situation we might start the strategy work at the beginning of the financial year to be ready for budget cycle.
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