You are on page 1of 2

C Vision Tactical vs. Strategic ?

By: Rick Spair – Principal C Level Advisor

Knowing when a project has strategic implications makes the difference between meeting
business expectations and project failure. This inability to differentiate is a key contributor to
the rampant misalignment of IT and business in small- to mid-sized enterprises (SMEs).
Improve IT’s success ratio by understanding from the outset whether a project is tactical or
strategic in nature.

Strategic Awareness Is a Manager’s Responsibility

Every business has a strategy, even if it is not formally documented. The projects that a
business engages in offer a clear reflection of strategic intent.

Most SME businesses lack the time and resources required to capture and document a
majority of the management decisions being made. The management team is too busy to get
involved in most departmental project decisions. This puts the onus on executives and
managers in every area of the company.

Successful companies are run by a management team that understands project decisions
required to keep the company moving in the right direction. Unfortunately, most IT decision
makers are so caught up in day-to-day operations they cannot distinguish the difference
between tactical and strategic projects.

Strategic vs. Tactical

Although few SME businesses can hand their IT managers a three-to five-year strategic plan,
most will have a list of prioritized projects. The IT decision maker needs to obtain this
information and understand the business drivers for each. This awareness helps IT add
business value by:

 Identifying technology solutions that satisfy multiple business objectives.


 Minimizing future costs by addressing additional functionality and scalability.
 Leveraging a project to introduce new ways of automating processes.

Once the CIO has a list of projects and understands the business driver of each, he or she will
have a good idea which are strategic and which are tactical. In general, strategic projects are
long-term and drive the business forward, while tactical projects are short-term and maintain
or improve current operations. The table below provides a rough blueprint for project profiling.

Project Type Strategic Tactical


Project Goal  Competitive advantage  Business continuity
 Decreased costs  Satisfy regulation
 Increased revenue/profit  Security
 Launch new product/service  Strategic components
 System upgrades

Time Frame 3 to 24 months 1 to 6 months


Complexity High Low to medium

Page 1 of 2
Case Study: Expanding ERP Functionality

A prominent manufacturer recently deployed a large Enterprise Resource Planning (ERP)


upgrade. The upgrade included the addition of accounts receivable and accounts payable
modules, multi-currency handling, and integration with a Web-based, client-facing e-
commerce solution.

The project started when the CEO gave the green light to the finance department’s request for
an accounts receivable module. Instead of immediately putting his nose to the grindstone and
finding the best solution for the organization’s existing ERP system, the IT manager asked
senior management about the project driver. Senior management revealed its plans to double
revenue in the next two years. It would do so by expanding its product line and moving into
foreign markets. It also wanted to provide clients with the opportunity to purchase items
through the Web site.

The strategic implications of the finance department’s project request were clear – automated
invoicing would allow the enterprise to increase the number of transactions it could process
without increasing head count. The IT manager realized that this ERP project was much more
complex than adding an accounts receivable module. He posed some serious questions to
senior management:

 What if the current ERP system cannot handle the transactions required to double revenue?
 Should the company use this opportunity to automate accounts payable?
 Will the move into foreign markets require multi-currency handling?

This was a strategic project, and the IT manager had the ear of senior management. He
recognized three important ways IT could add substantial value to the business:

 Upgrading the overall ERP system would satisfy multiple business objectives.
 Adding an accounts payable module and multi-currency handling would give the
organization leverage with the vendor and save costs.
 Integrating the ERP system with the Web site.

The senior management team was pleased with these synergies and the IT manager had little
difficulty obtaining executive buy-in. Once IT received commitment, he broke the project into
a series of smaller, manageable components. The strategic project became a series of tactical
projects. In addition to addressing compliance, security, and disaster recovery, tactical
projects provide the subset of milestones required to complete a strategic project. While ERP
expansion was a long-term strategic project, IT would employ the following tactics to complete
the project.

 Complete a feasibility study of the current infrastructure to decide whether to upgrade the
current system or buy a new system.
 Develop a project plan.
 Complete a Request for Proposal (RFP) and send it to the appropriate vendors.
 Implement the upgrade or the new ERP system.

In Summary

Knowing the difference between a tactical project and a strategic project increases IT’s value
to the business.

Page 2 of 2