3 Reasons an IT Strategy is Just as Important as a Business Strategy.

by | 12 Jun, 2020 | Article

You have a business strategy, but not an IT strategy? Here’s why you’re missing out.

In the business world, having a business strategy is a must. Today, IT and business strategies are inseparable, together providing a critical tool in assuring businesses are poised and prepared to deliver value to their clients.

What is an IT Strategy?

An IT strategy is an integral part of your business strategy that aims to align technology and operations with business goals. It clearly sets goals and objectives for how those technologies will be implemented and used, as well as articulates how the technology strategy supports key business objectives. By having this strategy in place, everyone within an organization knows and understands that as business needs change, technology must evolve as well. An IT strategy enables business outcomes, competitive differentiation, and customer value.

In fact, if you don’t have an IT strategy, you risk being unable to provide the level of service to the business required to fulfill business objectives. This creates a gap between business demands and IT — which may, in turn, lead to an adversarial relationship between lines of business and IT. Think of it this way: most of today’s IT organizations are reactive. They solve IT problems as they happen, such as calls into the help desk, new equipment set up, access issues, etc. So many human and technological resources are required to handle these everyday problems, that there’s not much time left to look ahead.

An IT strategy can help alleviate this: it gives IT the opportunity to have a seat at the table to discuss business plans up front and eliminates the fire drill that would happen without this foresight. It gets IT recognized as an overall contributor to business development and aligns IT staff with the company mission.

Of course, having a strategy is one thing; making sure it is efficiently implemented and able to evolve are equally essential. Here are some important ways we’ve seen businesses benefit from a fully formalized – and evolution-ready – IT strategy:

#1: An IT Strategy Assures You’re Leveraging Technology to its Fullest

Nearly any business operation – from retail to health care to manufacturing – has a heavy component of technology that assures their operation flows and gets things done. Yet, that’s not enough.

Historically technology was used by organizations to improve employee efficiency. For example, a point of sale system that calculates change for a transaction enables associates to service greater numbers of shoppers in a shorter period of time while at the same time reducing errors. Technology choices were limited, and businesses were easily able to revert to manual processes should supporting technology become unavailable. Today’s landscape is significantly more complex – consumers are interfacing directly with corporate systems and data analytics. The resulting information often has more value than the products you sell, and loss of IT systems can directly reduce your revenue. In addition, IT systems now operate in real time with performance being a key differentiator between two competitors.

Organizations spend a large amount of time analyzing how a new or emerging technology might help achieve a goal. The objective is to make IT proactive vs. reactive. With an IT strategy in place, IT establishes itself as a contributor to the business plan vs. reacting to it.

This isn’t always easy. It’s hard for IT organizations to allocate the time needed for technology research and discovery because they are too busy or consumed with day-to-day operations. It’s impossible to look out because you are so busy looking in. This is where outside resources can help assess the big picture: what’s happening both outside AND inside.

#2: An IT Strategy Gives You a Differentiator Over Competitors

A critical element of an IT strategy is that it must be valuable both to the core technology team and the business in general. The strategy must be clearly aligned with how not only your organization operates but also how your users consume. This gives businesses an advantage to grow and be more profitable, since their technology is often more streamlined, nimble and efficient. It can give companies a competitive advantage.

Think about this in relation to your own business or the businesses around you. For example, it’s possible that just three to five years ago, you determined how much computing resources you needed and bought them. If you needed more – even if for a short window of time for a busy season – you had to buy those too. Today, companies can take advantage of consumption- based capacity on demand. You only pay for what you’re using: dial it up during peaks or dial down during lows. Taking advantage of on-demand services like this, if executed properly, can not only improve cost efficiency but decrease time-to-market and improve performance during peak times providing a better experience for clients consuming the on-demand services.

Leveraging a consumption-based model may be what you need. But extracting value from such an approach can be complex and it needs to be part of your strategy. This demonstrates to senior executives and other stakeholders that you’re planning for the future while being mindful of the business bottom-line benefits.

#3: An IT Strategy Assures You’re Meeting – And Driving – Business Needs

By going through the process of developing an IT strategy, organizations will have a clear understanding of the current state of IT from a financial management perspective. They’ll understand their current technology capabilities. They’ll have a roadmap of where that technology may be going. This can create an awareness of possible gaps and areas of consideration.

Why is this important? Today, IT is seen as a capital investment from most business leaders. They align budget numbers with those tangible items they can see: what is IT’s resolution time? Are they on or off budget? With an IT strategy, this point-of-view can change.

To shift this thinking, you also want to shift how you’re communicating the strategy. The best IT strategies look at IT from a non-technologist’s perspective to provide insight into how well IT is performing for the business. The business isn’t interested in speeds and feeds – they don’t care about whether you’re in the cloud or not – they care that you are meeting needs and creating value.

It’s important to present information in meaningful and manageable chunks. When you can articulate to non-IT leadership that IT is a key part of enabling critical value streams as opposed to a necessary cost, then you can start to project out.

Putting Your IT Strategy in Place

The first step in the strategic planning process is to understand your current state and immediate needs. What do your financials and approach to service management look like? What are your immediate technology needs? It’s also good to take a closer look at your technology triggers: both the external and internal factors that affect IT. External factors can be items such as industry changes or market fluctuations. Internal factors can be things like acquisitions, specific growth targets or other planned events. Then consider your organizational structure and how IT runs with the business – is it a cost center or a contributor? Finally, look at all of the different technologies used within your organization – both inside IT and outside “rogue” technologies that are used by other business units.

Sometimes it’s hard to assess your own work in a transparent and honest fashion. But it’s critical to ask yourself, ‘Why did we do X? Why did we do Y?’ This gives you a baseline of the current state, so you can plan for what’s ahead. The ultimate goal is to create a target for where IT is headed , a target that aligns directly with where the business is headed. 

Learn more about implementing an IT strategy in your organization.