The business world is shrinking daily. Customers are increasingly more tech-savvy and the instant gratification generation demands change and innovation now. This, combined with the upsurge in cloud solutions and distributed workforces, makes IT strategy progressively more important to all organisations – especially as businesses look to cut costs and operate more effectively.
What is it?
An IT strategy is an integral part of the overall organisational strategy. It is a comprehensive plan that guides organisations on how technology can help them achieve their goals, boost their competitiveness and increase their chances of success through technological innovation, cost savings and process automation. The IT strategy should consider all facets of technology management, including cost control, skills, hardware, software, risk management and other areas of enterprise IT, as well as how investments in these capabilities support the overall business strategy. An effective IT strategy should allow IT to be flexible enough to adapt to changing business priorities, available skills and budgets, new technologies and evolving user and customer needs.
IT strategies should be revisited often to ensure the business is making the right technology investments and that these investments align with the business strategy. IT environments that are properly planned, managed, maintained and secured are better able to support the current and future needs of businesses.
There are a number of factors to consider when developing an integrated IT strategy. Key to the process is understanding whose input is critical in developing meaningful outcomes. Bearing in mind that the primary customer of any IT function is the business it serves, it is imperative that the needs of the business be considered when drafting the strategy. By engaging with business stakeholders throughout the development of the strategy, and by asking them to represent the customers of the organisation, businesses are able to ensure that the primary needs of their core users are met.
Why is it important?
In the past, IT strategies were often drafted in isolation, with limited consultation with wider business stakeholders. This resulted in strategies that were operationally focused and not aligned to the needs of the business, leading to inefficiency and wasted time, money and effort. IT soon became an obstacle to business success rather than a strategic driver.
A meaningful, transformative IT strategy will help businesses to understand how they can operate more effectively and efficiently, and will expose issues and bottlenecks that may be tripping them up, while articulating a vision for technology as a transformational force for the organisation. It should detail how businesses can use technology to innovate, extend their offerings and differentiate themselves from competitors, while reducing unnecessary spend, optimising processes and improving compliance.
Defining an effective IT strategy can be complex. But if it’s well thought out and planned, businesses can notice massive, technology-driven changes.
Step one: Understand the business’ strategic drivers
A vital part of the process is to have a clear view of what the business needs and wants as well as the key success criteria, business processes, goals and business drivers. This requires in-depth business analysis to understand what the business does, how it does it and what success looks like, ultimately bringing IT and business into alignment. All stakeholders should be involved to establish their strengths and challenges and how these affect the overall business goals.
This process should also focus on discussing and understanding what the end-users need – it’s crucial that they get this step right the first time, as it will define all other areas of the project. Although the IT strategy should be agile and flexible, any missed opportunity could prove costly.
Step two: Understand the current state of IT
Gain an holistic understanding of how IT is supporting the business today to identify what is working, what isn’t and what could be done differently.
Key stakeholders and IT users should be engaged, using a structured process to understand what their expectations of IT are and how they feel IT is living up to those expectations. Staff and customers are essentially the end-users of IT, and should not feel that it prevents them from doing their jobs effectively or makes engaging with the business and using its services difficult.
Allow the stakeholders to guide the business. Acknowledge and understand the issues that arise out of these dialogues and brainstorm how technology can be used to overcome these.
Step three: Identify gaps, risks and opportunities for improvement
Businesses will now have a better understanding of the gaps that exist between where IT is and where the business strategy requires it to be, as well as between business expectations and IT delivery. They can then take a proactive view on how to mitigate future risk and take a strategic view of aspects such as regulatory compliance.
Technology should not expose businesses to unnecessary risk – and any risk that is identified should be viewed as an opportunity to improve processes. Compliance, for example, poses significant risks within most industries. IT should therefore include specific design steps around how compliance can be incorporated into new systems and process development.
Step four: Define the future state of IT
Forward-thinking companies are able to predict issues before they arise, putting them a step ahead of their competition. This means that they don’t focus only on current problems and opportunities and build a picture that talks to what ‘good’ would look like in three to five years – is it cloud-enabled? Is everything offered as a service? The IT strategy should focus on supporting businesses to meet their strategic targets and providing the flexibility to scale and adapt to future strategic goals.
With the vision and future state defined, businesses will then identify and document the strategic themes and priorities that will deliver this vision. The themes often align to important strategic themes for the business as a whole, while priorities tend to align to key IT programmes and initiatives – the point is to show what IT is working towards, what its key focus areas are, and how they align to organisational priorities.
Step five: Measure
An IT strategy is not complete without defined measures of and metrics for success. These allow businesses to track their progress towards success and make adjustments to get back on track where necessary.
Business stakeholders and IT managers who are closely involved in the planning of the IT strategy may start to develop tunnel vision, which is where IT strategy consultants can assist by bringing fresh perspectives and unbiased assessments of businesses’ IT strategies. They can also provide advice and guidance on how business architectures and roadmaps of initiatives can be optimised to meet goals.
A well-planned and effectively executed IT strategy can help businesses to become more transformative, effective, efficient and agile. By making the right technology investments, businesses will be able to diversify their offerings, uncover new revenue streams, save money, retain staff, and attract and keep customers – and that’s the ultimate goal of all organisations.
By Dominic Riordan, Principal Business Consultant at BSG