Creating an Effective Information Strategy (Part 1 of 2)
Information strategy development is often confused with tactical planning. This first article in a two-part series will help you develop an effective information strategy.
- By Troy Hiltbrand
- October 24, 2017
The term information strategy is often misunderstood. For some, it represents a plan for how they will manage their technology resources. For others, it is synonymous with a project plan for their data warehouse or a staffing plan for their business analysis competency center. In reality, these are tactical plans associated with implementing an information strategy, but they are not the information strategy itself.
To understand what an information strategy is, it is vital to understand the two words that comprise the term.
Defining Information and Strategy
Information is much more than just data. Data can reside in a data lake forever and never become information. Data becomes information when it is transformed in a way that meets a business need -- for example, when it can be consumed as part of the decision-making process.
In today's economy, information is a valuable asset for organizations. It has often been stated that information is to the digital revolution what oil was to the industrial revolution. It is a treasured resource that powers the digital economy; those who possess the right information can succeed, while those who do not struggle to survive.
The second word, strategy, can be defined as a shared organizational vision with ample resources applied to make it a reality. It is more than a brainstorming session where an executive team comes up with some great ideas for making the business better. It is a target future state the organization wants to achieve and is willing to commit limited resources to accomplish.
Combined, the term information strategy represents how an organization plans to utilize this valuable resource of information to achieve a future organizational state. This includes areas such as data creation, data integration, data management and governance, information architecture, and monetization of information assets. Every place that information can be leveraged to achieve organizational goals might be part of a cohesive information strategy.
The next question is what does this look like? In practical terms, an information strategy needs to define four major components: vision, impact, projects, and timing/costs.
The first and most important step in defining your information strategy is to identify what your organization is trying to accomplish using its information. This is the vision of the strategy. A vision statement is the anchor point of any strategic plan. It sets the tone and direction for the entire information strategy. All the other parts of the strategy should be tied back to this vision statement and feed from it.
The vision of your information strategy should be directly connected to the vision of your organization and needs to complement its competitive advantage.
In some organizations, the business strategy is fully defined and formally communicated. For others, it is part of its nature but is not explicitly stated, and it is up to your information management organization to extrapolate based on business objectives and targets.
In their book The Discipline of Market Leaders, authors Michael Treacy and Fred Wiersma describe three generic competitive strategies successful companies employ: operational excellence, customer intimacy, and product leadership.
Operational excellence: These companies optimize their operational rhythm to drive down costs and ensure a high degree of consistency and repeatability in their processes. They provide value to their customers by providing high quality at the lowest price possible.
Customer intimacy: These companies focus on understanding and constantly improving the customer journey. They strive to differentiate themselves by being in tune with customer needs and wants and proactively doing all that they can to ensure that the customer experience is optimized in every way possible.
Product leadership: These companies strive to have differentiated products or services from their competitors. Innovation becomes fundamental to their competitive advantage.
What differentiates your information strategy from your company's overall strategy is that it focuses on the specific asset of information in achieving its target.
Writing a good vision statement should follow some guidelines:
- Keep it short.
- Keep it simple enough for people both inside and outside your organization to understand.
- Make it ambitious to generate excitement and buy-in, but not so ambitious that it seems unachievable.
- Align it to the values that you want your people to exhibit as they perform their work.
- Make it specific to your industry and your company. Generic statements don't have the power to drive activity.
If your company has product leadership as its strategy, your vision statement might look like this: "Create a platform of innovative digital products and services that augment and enhance the company's corresponding physical products and service offerings and provide every customer with a superior experience."
For your information strategy to be effective, it must be tied to a demonstrable business outcome. The impacts of your information strategy are the direct and indirect benefits realized from the execution of your strategy. The business impact is the reason that organizational leaders will get behind the strategy and apply the necessary resources to turn your vision into reality.
The business impact can be represented in how the effective your use of information will achieve your organizational targets. High-level statements of business impact are a start, but where real momentum is achieved is when those benefits can be quantified. Measurable metrics, such as potential increased revenue or anticipated cost savings, provide context that helps your business determine which strategy to follow.
An example impact statement would be "increase market share by 20 percent through the development of a new information-based product offering." This ties a quantifiable target to the implementation of a specific strategic target.
With an effective vision statement and an understanding of the anticipated impact, you are ready to define the details of how you will achieve your information strategy. In Part 2, we will delve into identifying the right projects and quantifying timelines and costs associated with the execution of your information strategy. Read Part 2 here.
Troy Hiltbrand is the chief digital officer at Kyäni where he is responsible for digital strategy and transformation. You can reach the author at [email protected]