The IT Strategy Balancing Act
By Peter Jarrett, Head of Operations
It is essential that an IT Strategy be aligned with the goals of the business to create and sustain competitive advantage and yield true value. These days, business and IT strategy are more intertwined than ever. As organisations face increasing pressure to adjust course or pivot quickly to meet new market challenges, there is a knock-on effect on the supporting IT Strategy and its ability to maintain alignment.
Gartner defines IT strategy as the
“discipline that defines how IT will be used to
help businesses win in their chosen business context”.
It can be a challenge to develop and deliver an effective IT Strategy given the increasing pace of change, constant cost pressure, resource scarcity and the rapid emergence of new technology. With today’s volatile environment, a three year IT Strategic Plan can get stale quickly unless it is frequently reviewed.
Keeping it Fresh
Finding the path to keep your IT Strategy fresh and relevant requires a blend of organisational agility and disciplined long term thinking which can be a delicate balancing act.
There are plenty of frameworks and methodologies out there which can help guide the IT Strategy development process and align it to business requirements — such as those discussed by Serge Thorn from the Open Group, the IT Value Matrix from the CIO Executive Council or the IT-CMF framework from the Innovation Value Institute to help evaluate your maturity.
The trick however, is in the wise application of this
process to the situation of a specific business,
which is where the balancing act kicks in.
When developing or reviewing your IT Strategy, key considerations to balance include
- Serving the customer of today or tomorrow: Having an in-depth understanding of the value your business provides to the customer and how their needs are changing will guide how quickly you may need to re-orient your business and IT Strategy. Picking up the weak signals that your customers are changing their expectations and behaviours quickly needs to be fed back into your planning process or your audience may have moved on before your strategic change efforts are complete and you will miss the mark.
- Short term vs long term time investment horizons: Is your business driven by the next quarterly report to the market, or blocking the next competitors move and needing to constantly orient around an OODA loop-like strategy, or does it have the ability amidst a changing environment to hold to its North Star? Personally, I would love to see more focus on building businesses using some of the longer term Japanese management practices as outlined by Peter Drucker in 1971.
- Risk taking vs risk avoidance: What is the risk posture and risk appetite of your business and how will it influence your strategic thinking? Both postures have strengths and weaknesses, but understanding why your business takes this stance and whether it is still valid in today’s environment can significantly impact your IT Strategy planning and approach to execution.
- Traditional or agile organisation: Assessing whether your business has a more traditional structure or is evolving toward a more agile organisation will impact the way in which your business needs to respond to its environment, how to apply your IT Strategy and the approach to change management. I love the comparison between these two models from Mehmet Yitman on Scrum.org.
- Technology early adopter, middle of the road, or laggard: Once you have a clear view of your customer, investment horizon, risk appetite and organisational culture, you should consider how your business views technology as an enabler. Do they chase the new shiny tech leading them down technology cul-de-sacs or unstable business operations; do they stick to the undifferentiated middle of the pack; or “sweat the asset” and continue to treat IT expenditure as a necessary evil? Your technology stance will influence the path and pace of your technology roadmap.
- Buy, build, or consume: These days consumption models are de rigueur, with cloud and as-a-Service models dominating many parts of the technology stack. The key question from an IT Strategy is, if everyone is using the same platform, where is your unique point of difference? What special sauce do you need to retain for competitive advantage? And carefully consider the costs benefits of a consumption stack rather than continual legacy investment models.
- Insource, outsource or embrace the “gig economy”: Based on the above decision of how you intend to procure your technology, consider how this will affect your capability development. What skills do you really need and what is the most effective engagement style to deliver and sustain the competitive advantage of your business? Consider how to craft your workforce to flex your business to match supply and demand.
- Data rich insights vs privacy and security: While data is often espoused as the new oil, yielding greater business insights and more personalised customer experiences, there is an increasing hurdle of compliance and accountability that is running in parallel and requiring you to invest in processes to treat this data appropriately. The old adage of “the more you have, the more you have to worry about” holds true here. And you need the resources and the technology to consume the vast quantities of data and interpret it rather than hoard it “just in case” it might be useful in future — until you are breached and need to report it to the market!
- Integrate or separate: Today it’s quite common to have loosely coupled architectural solutions enabling the lumbering legacy back-end systems to stay on life support while the digital front-end races away to meet the user experience needs of the market (pains of a bi-modal world). The trouble is, that one model is pressuring the other, and at some point this rubber band will snap unless your architecture is prepared for an evolutionary leap impacting your core technology. You also need to commit to hold on to certain functional bundles or decouple them so that they can be performed by trusted specialists in the broader ecosystem outside of your business.
- Simplicity vs complexity: There are always new and elegant ways to leverage technology across business functions, however expanding the ecosystem of solutions within and outside the organisation can lead to technology bloat or sprawl, shadow IT, and numerous hand-offs between systems resulting in technical debt and increased risk that can lead to a greater attack surface, excessive cost and support requirements and increased complexity to manage and troubleshoot.
How do you keep your IT Strategy fresh? What factors do you find yourself balancing as you refine your strategy? Feel free to share your views.