IT Strategy

The importance of having an IT strategy is inarguable.  Intuitively we all understand the need for one. Although surprisingly, a recent survey we conducted of 100 Fortune 500 CIOs across the U.S. found that majority didn’t have a strategy that was ratified, aligned with business objectives and funded.

We know that strategic management is critical to organizational development as it aligns the mission and vision with operations. So why is it that some CIOs do not have a formal strategy? Our respondents overwhelmingly told us, their inboxes were filled with email subjects like: “Website is slow”, “Project behind schedule”, “Security breach…”, and the infamous “Budget overruns”.  And that is just a sampling of the 400 or so emails they receive each day.  That’s not counting the endless vendors who want just ten minutes of their time to talk about cloud, unified communications, and architecture consolidation.  No time for strategy!

If marketing and sales are handling an increasing amount of customer data, IT can start planning for how they will handle that by either increasing data storage on site, moving to the cloud or boosting the capabilities of the data analytics team. If these sorts of data storage and analysis faculties are found to be lacking, then plans can be made to either shore them up internally or to look for an outside IT consultant that this task can be outsourced to.

As 2014 came to an end, every functional area of a company developed and presented its plan for 2015.  They outline the strategies and tactics that they will implement into core business goals for 2015. IT is no exception to this.  What we have found is that IT strategies are not typically aligned with the corporate objectives, business development and EBITDA.  But rather tied to more tactical goals such as, capital refresh to the infrastructure, network upgrades, enterprise software upgrades, and the occasional capital line item for new technology innovation (that typically gets cut in the final budget approval).

IT has taken on an increasingly integral role in the way all other parts of the company operate. Every department from marketing to sales to human resources relies on IT to provide day-to-day support of their applications and overall access to the company’s IT infrastructure.

When developing the IT Strategy:

  • The CIO must not only chart IT’s path, but chart the paths of every other department along with it. IT must start earlier, understanding the business’ needs from the bottom up and getting a head start on implementing them.
  • The IT strategy must be tied to business drivers otherwise it is not “if” there will be a catastrophic failure but “when”.
  • CIOs can’t just think of IT strategy in terms of technological solutions. They must think in terms of business goals and opportunities.

We are also seeing CIOs being replaced with CMOs and CFOs who will direct technology development and innovation based upon business goals and financial objectives. What is going to be the economic and operational consequence of this? CIOs must figure out how to become relevant and become a contributing partner with business operations.

Next week we address the economic and operational impacts of not having a stated strategy.


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