How to Implement an effective IT Strategy
Posted In: Business/Investment
(Information Technology Strategy or Technology Strategy or ICT Strategy or IS Strategy) is a plan of action to create an information technology capability for maximum, and sustainable value for an organization. IT Strategy helps create shareholder value. In other words, it helps maximize the return on IT investments.
IT Strategy creates IT Capability. The product of an IT Strategy is IT Capability.
IT Strategy creates, modifies, aligns, changes IT Capability not just “technologies” or “systems” as some have implied. However, this IT Capability is a means to an end: value.
The end or objective of an IT Strategy is to create value, shareholder, or stakeholder or business value. This objective is not met unless we “maximize” value i.e. use the least amount of resources, and risk to create the most returns. This objective also requires that this value is “sustainable” – short term or “ephemeral” value is not the objective of a strategy. On the contrary, it symbolizes a failure of strategy. Often, the term competitive advantage is used instead of value. Competitive advantage does create value but it does not encompass all means of business value – new market entry, process efficiencies etc. deliver value without competitive advantage.
The Importance of IT Strategy
Organizations that do not have an IT strategy in place are akin to clueless organizations adrift in the sea of the 21st century marketplace, rudderless, and directionless. Moreover, with technology becoming the norm rather than the exception, organizations cannot afford to simply have a basic IT strategy and instead, must actualize a comprehensive IT strategy that is aligned to their business and corporate strategies. With the rapid spread of IT (Information Technology) and the increasing interconnection and connectivity in the contemporary world, having an IT strategy is no longer a luxury for organizations and indeed, it has become the very necessity for survival. This means that for organizations to harness the power of IT, leverage the synergies between their business processes, and capitalize on the efficiencies of the economies of scale, they need a robust, coherent, and proactive IT strategy. Further, with IT become ubiquitous, it is no longer the case that business strategy alone is enough and the alignment of the business strategy with that of the IT strategy has become paramount. A typical IT strategy just like a corporate strategy must first perform an internal and external analysis, which would provide it with a guideline on the alignment between its strengths and opportunities and weaknesses and threats. The primary reason why organizations go in for an IT strategy is to reduce the operational bottlenecks, actualize economies of scale, and derive value from technology. A good IT strategy can ensure the successful outcome for all these objectives. Thus, it would be able to meet the external challenges such as increased competition in these markets successfully. A well thought out IT strategy can be a source of sustainable advantage as well.
The following these five practices can position IT departments to better understand and deliver on strategic goals.
1. Align with Executive Expectations: A growing number of executives consider business alignment to be the primary concern for IT leaders. Thus understanding and exceeding executive expectations should be a top priority for every IT team. As key decision-makers, executives are responsible for establishing and directing organization-wide initiatives that reinforce business goals. The onus is on IT leaders to develop tailored strategies that align with the executive direction, forging a supportive relationship between the enterprise and IT. Having executive support is helpful for multiple reasons. A mutual partnership between IT and management can be beneficial for securing crucial resources. When IT and executive teams are unified, stakeholders are more likely to accept transitions to new systems and processes that may disrupt the status quo. Finally, working with organizational decision-makers ensures that all IT projects serve a business purpose and support overarching objectives, for example increasing market share or outperforming competitors.
2. Listen to Enterprise Needs: All functional enterprise departments rely on IT to enable and drive day-to-day operations. So driving a successful IT strategy is highly reliant on an open dialogue between departmental and IT leaders.
When asked to evaluate the pace of technological change in the workplace, 63 percent of managers found progress to be slow, due mainly to poor communication regarding the strategic benefits of new tools. It’s important, therefore, for IT leaders to be mindful of how they communicate technical concepts with department heads by using language that emphasizes potential benefits improved customer service or smoother business operations, for example. As tech experts, IT leaders should address and define operational objectives with department heads and then design solutions for achieving those objectives with the rest of the IT department. On the other hand, when IT is delegated tasks from other departments without considering alternative approaches, businesses risk missing opportunities for improvement. One way to ensure that IT initiatives are aligned with stakeholder expectations is to create a framework for defining enterprise-wide strategies. In some businesses, this could be a SWOT (strengths, weaknesses, opportunities, and threats) analysis or the OGTM (objectives, goals, tactics, and measurements) method. Frameworks like this also enable IT departments to compare departmental plans to find common objectives and suggest consolidated solutions.
3. Examine Different Solutions: IT solutions are critical for driving innovation, value, and cross-functional business operations. After partnering with upper and departmental management on defining strategic initiatives, IT departments should consider which technologies and processes are best suited for meeting the needs of the enterprise.
For example, if a business is having challenges tracking devices, how can IT facilitate effective asset management? A small organization might only require basic tagging and inventory documentation. However, for expanding organizations, implementing a comprehensive Configuration Management Database (CMDB) provides device lifecycle visibility and automated inventory alerts, enabling scalability and longevity for future expansion. Similarly, if an employee needs IT assistance, what is the best way for he or she to connect with a technician? For a smaller organization with a lower frequency of incidents, it might make sense for employees to report issues through a ticketing software platform. For workforces that require more hands-on support, desk-side assistance or a walk-up help desk may be the best solution. If technicians notice recurring incidents, then it might be of interest to employ a service desk component for more strategic support. All three solutions offer unique advantages, so it’s important to consider multiple factors before kicking off formal implementation.
4. Design an Instructional Framework: Periods of change can be stressful for employees, especially when prompted by technology. Maintaining morale and productivity is key for a successful transition, so IT leadership and Human Resources (HR) should work together to design an instructional framework for training employees and addressing issues. Instructional frameworks vary by company culture. If a workplace is comprised primarily of early technology adopters, then a minimal framework for supporting and enforcing best practices, such as an online knowledge base, might be preferable to a robust training program. However, a different demographic of employees might benefit from a combination of visual, auditory, or experiential methodologies.
One effective approach for ensuring that employees successfully adopt new tools is to involve them in the installation and setup process. When stakeholders play an active role in implementing technology, they are better equipped to use it properly and recognize abnormalities.
It is important to consider the method of consumption for training programs. Will employees need to have access to instructional resources on desktops, laptops, smartphones, or all three? Who is responsible for ensuring a smooth flow of information across departments? In order to avoid chaos and boost confidence, IT and HR departments should create a detailed communication plan to clearly address all of these questions before introducing new technology to the workplace.
5. Analyze and Revise: No IT strategy is flawless. But in order to evolve, IT departments must be diligent about leveraging analytics to facilitate data-driven improvements and revisions. Outcomes of major IT programs should be evaluated against benchmarks defined by business stakeholders early on, such as the number of employees transitioned to a new technology or the amount of reduction in system-wide interruptions. If there is a discrepancy between results and expectations, then is there a key functionality that IT has overlooked?
Network Operations Centers or IT Service Management tools are effective mechanisms for gaining insight on fluctuations in business performance. Even by following basic practices such as tracking IT contracts or using standard terminology for components, IT departments have the opportunity to consolidate equipment, reduce spending, and achieve deeper technology knowledge.
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