How you can benefit from not having an IT Strategy
If you don’t have an IT Strategy you are free to do whatever you want, whenever you want. Just don’t expect to be in a winning organisation.
In over a decade of helping organisations to develop their IT Strategy, the one thing has been conspicuously absent is… an existing IT Strategy!
This begs the question:
Do you even need an IT Strategy?
First let’s look at what I consider the top 5 reasons that drove those organisations I’ve helped to need an IT Strategy:
- Responding to a specific business challenge i.e. a risk, a market shift, regulatory change, increased competition
- A change in the leadership team that prompted a review of IT
- Relocation to new offices – opening up budget and providing an opportune time to review IT
- Technology constraints – either physical, such as running out of data centre capacity, or vendor driven, such as end-of-life technologies
- A view from business leaders that IT is either not adding value and is costly, or a view that they are missing out on innovation opportunities
The market sectors seeking an IT strategy have been just as diverse as the drivers. They’ve varied from global banks, to leading law firms, to sports governing bodies, and from the largest of NHS organisations to small start-ups.
So we can see that it doesn’t matter what the size of the organisation, or the market sector, there is generally a lack of strategic IT direction in organisations today.
So what is the impact of not having an IT Strategy?
Below I’ve listed the pros and cons from my experiences of working with organisations that did not have a strategy (please share your experiences, good and bad, in the comments section below).
- You can change direction at will – with no long-term direction you have the flexibility to change your mind
- You can respond to business needs immediately – there’s little more satisfying than giving people what they want, when they want it
- You can trial many different technologies – with no strategy to limit your choices the world is your oyster
- Without a strategy there is often little cohesion between or even within the different IT functions i.e. Operations, Development, Infrastructure, etc.
- Sometimes based upon ‘he who shouts loudest’, prioritisation is based upon local relationships. It’s typically putting out fires or responding to the whims of individuals. Rarely does it align with overall strategic business priorities
- IT investments can be high and/or return on investment low
- There’s limited cohesion across business units
On the surface, the pros appear quite desirable. However, the cons demonstrate that the perceived flexibility could actually have a damaging effect to the organisation as a whole.
How has the strategic role of the IT department changed?
In the late 90’s the IT department focused on ‘locking down’ the business. Preventing it from making its own choices in the name of security and control.
Thankfully this approach shifted in the early 2000’s, when the focus was on treating the business as the customer of the IT department. This gave rise to service management, with support from methodologies and best practice such as ITIL. This model of treating the business as separate from IT drove the trend in mega outsourcing deals, with some large businesses even spinning out their IT departments as separate business entities.
Currently, IT is experiencing a revolution through changes such as Agile development approaches, Shadow IT, BYOD and the proliferation of mobile apps. No longer will the business put up with being held back by the IT team. This trend is made all the more possible by the availability of cloud-based Software-as-a-Service (SaaS). The result of this revolution is another shift in IT where the focus now is on the IT department recognising that it is in fact part of the business, and its role is to become a trusted partner to each business unit. The only ‘customer’ is the one that is external to the organisation!
So what of the IT Strategy?
That has changed focus too! When I first started meeting clients to discuss their IT Strategy needs I would research the websites of technology vendors such as Microsoft and VMware. The IT Strategy was something that very much belonged to the IT team.
In the last 5 years I’ve prepared for such meetings by reading the client’s annual accounts and researching the challenges facing their industry. Today’s IT Strategy starts with the business, and it is for the business. That’s not to say that the traditional IT elements of the strategy – such as infrastructure, security, and the data centre – aren’t still included and important. However, they are presented in a way that brings business context and alignment.
For example, I recently helped a large insurance company to develop it’s data centre strategy. The IT team were faced with making a 15-year investment in an on-site data centre, yet the business only planned on a 12-month cycle.
Another example would be a global law-firm client. Their business strategy is to be the absolute leader in their field, yet the IT department focuses on minimising IT spend and continually reducing head-count. Such diverse goals aren’t strictly incompatible, but they do require an understanding such that they can be accounted for and planned around. These examples demonstrate the need to have a deep understanding of the business first.
The aim of today’s IT Strategy is:
- To identify technologies that can enable the business to overcome challenges, and create sustainable competitive advantage – an ever moving goal post
- Ensure technology investments are aligned to business priorities – which, we must recognise, also do not remain static
- Utilise technology to bring the business together – creating the connectives between marketing, sales, delivery and operations
- Balance security with risk to ensure business flexibility – so often IT staff don’t understand that an appropriate mitigation to risk is ‘acceptance’
- Manage vendors appropriately – whole-scale outsourcing is becoming a thing of the past as companies focus on speed to market, and IT solutions that bring innovation. This is driving a multi-vendor approach
- Control IT spend – whilst still allowing the business the flexibility to make its own choices
The key to an effective IT Strategy lies in the approach taken to its development. Your IT Strategy will be unique to you and your organisation at the moment in which it is created. It will be surrounded by the unpredictable nature of business, and therefore must be flexible enough to accommodate the level of volatility that your business experiences.
The IT Strategy must balance the strategic priorities of the business with the intrinsic IT priorities i.e. end-of-life hardware, managed services contract renewal, licensing, new operating systems versions, etc.
And most of all, the IT Strategy must be business driven. It can only be effective if it starts with a deep understanding of the business, its strategic direction, and its tactical challenges. Only then can you consider how technology will respond to those needs.
So can you benefit from not having an IT Strategy?
Given the pace of change in both the technology and business landscape, the benefits in not having an IT Strategy are very quickly outweighed. The question should really be – Can you afford not to have an IT Strategy?
Please share your experiences of having, or not having, an IT Strategy in your organisation in the comments section below.
For help in defining your IT Strategy get in touch. We’d be happy to share advice and guidance over the phone, or we can go a step further and provide a free consultation at your office.
For other relevant on-line articles see:
- CIO.com – The changing face of IT Strategy
- CIO.com – Enterprise IT crosses the chasm
- ZDNet – IT Spend is growing, but CIO’s just don’t get it
- Computer Weekly – RBS fined tens of millions for IT failure
Recommended further reading on strategy development:
- To assist in developing an IT Strategy, especially when the business strategy is less than clear, there’s good in-depth guidance in Peter High’s book: Implementing World Call IT Strategy
- For business leaders needing to determine strategy, another great book by Lafley and Martin is: Playing to Win
Sign-up to our newsletter to keep up to date with news, views and opinions from Camford.