There is a very simple textbook process on how a strategic decision becomes reality:
- “The business” defines the business strategy
- A smart person in IT translates it into an IT strategy
- “The IT” is implementing a solution that moves the company towards the strategic target picture
- Done!
In reality this is what one might get as a high-level strategy definition:
Our strategy is to develop new innovative products across all regions so that we excite our customers with new experiences at a low cost point.
While this sounds nice it will be difficult to implement a target picture based on this statement. Why is this statement so weak and so hard to implement?
There are many reasons and the statement would fail most of the 10 timeless tests of strategy but there is an event simpler test to start with: Is there a viable alternative to this statement? Let’s try it out and formulate the exact opposite of the statement above:
Our strategy is to develop no new products, close all but one region and make sure our customers neither like our products nor our price point.
Clearly no one would ever consider this to be a valid alternative.
In order to make this a useful statement that helps with implementation we have to consider tradeoff decisions:
- Is our competitive advantage cost or innovative features? Which one is more important?
- How do we measure customer excitement?
- How do we gain more insights about our customers and competitors?
- What is the portfolio of features that improves the experience? Are the resources for these initiatives in place?
When answering these questions one can come up with a statement that has a real, viable alternative. Here are two specific statements (clearly not yet a full strategy) that are real options:
- Our strategy is to beat competition by focusing on innovative products and customer service that makes us one of the top 3 players as measured by NPS. We create high quality products that are more expensive than the average in our industry.
- Our strategy is to be a fast follower of new features at a low price point. We excite our customers by the high value they get for little money and are the cost leader in our industry.
Both of these are valid statements and would have different implications on the overall landscape, governance and business operations.
Finally a reminder: What is true for strategy should also hold for Enterprise Architecture. “Upgrade the ERP or the world will come to an end” is also not a valid decision proposal. Whenever we come to present an architecture decision there should be a next-best option that might not be desirable but should be feasible.