5 But Don't Bronze the Plan Either
(Do Create Flexibility Through Scenario Planning and Frequent Review)

Plans are necessary, but plans change. Medtronic is in acquisition mode - absorbing as many as 11 companies in four years - and CIO Balagna's strategic plan covers only one year (tied to the budgeting cycle). Even at that short span, he says, "I tell my people, don't bronze the plan. Five-year plans? Oh, that my crystal ball would work so well."

Bain's Rigby says that contingency planning and scenario planning are two underappreciated and necessary steps in writing an IT strategy. "Contingency plans, both short term and longer term, have to be worked out in advance with the business heads. You have to say, 'Here's how I would rank-order our expenses, so if the CEO says we have to cut by 30 percent, these are the ones I would drop - what do you think?" says Rigby. He says the process helps cement business alignment and support, or at least that the CIO can "tease out weaknesses in your budget beforehand" instead of being blindsided in a downturn. "If you don't prioritize investments, someone else will do it for you," he says.

Scenario planning is equally important and seems to be a bit of a lost art after a decade of continuous economic growth, according to Rigby. Scenario planning simply means creating plans for reacting to specific possible future events outside the company. Hon Industries does scenario planning for what it calls "game-changing events," but these possible events are the sort of detail companies are unwilling to discuss, for competitive reasons. However, Rigby notes two common events that nearly every company should plan on. One is competitive mergers and alliances: What happens if you're the industry's number one, and number two merges with number three? Rigby notes that the first company in this scenario will want to pay particular attention to its CRMCRM plans; the merger of the smaller competitors frequently gives them the ability to combine their separate customer views and "triangulate" to determine which customers are most profitable, for example. Rigby's other common scenario planning need is for possible supply chain disruption in the post-9/11 world. Alles zu CRM auf CIO.de

At Medtronic, Balagna relies less on scenario planning and more on his organizational model to create an ability to respond quickly to changes of fortune such as mergers or industry upheaval. Balagna's organizational model includes a global technology council, made up of the IT leaders from each of Medtronic's business units around the world. The council meets roughly every two months to review the appropriateness of the company's ongoing strategy, make adjustments if necessary and also make sure current projects are being executed as planned. Balagna can also call emergency meetings if necessary. Balagna says that plans can't be changed instantaneously, "but we can reprioritize very quickly with this model," he says. The global makeup of the group also helps keep changes in the right perspective.