A business-aligned technology strategy

Business - IT Alignment Series

This post is the 3rd installment in our blog series on Business - IT Alignment. In the last post, we established that the starting point for Business - IT Alignment is to have a business strategy. We also noted that with a business strategy in place, it becomes easier to craft a technology strategy to enable and support the business.

What exactly is a technology or IT strategy?

A technology strategy is a document that articulates how the IT function will enable the realization of business objectives, inform business - IT alignment, and provide value to the business. The technology strategy attempts to answer questions such as:

• What are the aspirations of the business? What are the expectations of business leadership from IT in order to realize these aspirations?

• What are the key business trends identified in the business strategy? Along with these, what are the IT trends that will create value for the business?

• What are the key business initiatives? What are the implications for IT?

• Considering the current state of IT, what are the key opportunity areas? Where can IT create value?

• What is the long term vision for IT to enable and support the business?

Why does a business need a technology strategy?

We have established that a technology strategy is necessary to achieve business - IT alignment. But what are the other reasons why we should care about having an IT strategy? Without an IT strategy:

• It will be a challenge for the IT function to operate in a coherent manner, often leading to internal misalignment and the rise of shadow IT functions

• A business may be reactive and make opportunistic decisions regarding their IT needs

• Over time, such unplanned decisions will result in higher technology spend due to frequent optimization

• The need to continually optimize due to prior poor decisions could quickly make IT a burden to the business, rather that a value-adding partner

• All considered, the technology function may actually be a hindrance to achieving business objectives.

The absence of a business-aligned IT strategy could impact the business qualitatively in the following ways:

• The lack of a well-thought out plan to invest in technology enablement for the business could result in ’misses’ which only results in an increase in technology spend and the business tries to correct these ‘misses’

• Sub-optimal utilization of technology would impact the long-term competitiveness of the business

• Depending on how a business uses technology, it may either introduce risks or not address existing technology risks, leaving the business vulnerable

Having a properly documented business-aligned IT strategy will not only spare the business from the challenges highlighted above, but will also position the technology function to effectively enable the business, and be a partner for success.

How to document a technology strategy

How then can one document a technology strategy which effectively positions IT to enable the realization of business needs and as a partner to the business?

• Like every strategy articulation effort, documenting a technology strategy starts with analysis:

  • Internal Analysis: taking business information (i.e. business strategy, scope of business, business indicators and targets, etc.) as input, the technology strategist analyzes the business baseline and identifies business imperatives. The strategist also reviews the current technology landscape i.e. applications, technology, IT capabilities, operating model, etc. to determine how well technology can support realization of business objectives.

  • External Analysis: alongside an internal review, the strategist also reviews external factors such as technology trends, industry dynamics and development, the competition’s use of technology, etc.

• With the completion of the analysis phase, the strategist now has enough information to:

  • Define a vision for IT,

  • Identify technology imperatives of earlier identified business imperatives, and

  • Identify opportunities to create business value within the technology landscape i.e. applications, technology, IT capabilities, operating model, etc.

• With a clear vision for IT, and technology imperatives and opportunities that are agreed to by key stakeholders; the strategist then proceeds to define the target state of the technology landscape. These would include:

  • Target technology capability map

  • Target application architecture, technology architecture, operating model, etc. based on the target technology capabilities.

• Every strategy document should clearly identify the projects and initiatives that are required to bring the strategy to life. The technology strategy is no different. With a clear vision of the future of IT, the strategist should proceed to define the projects required of IT to support the business. Ideally, these should be quantified to ensure there is a rough order of magnitude estimate of the scope, duration and financial implication of the identified projects and initiatives. A business case should also be developed to support the proposed spend.

• The final activity required to complete documenting the technology strategy is to translate the list of projects and initiatives into a multi-year roadmap, highlighting start dates, dependencies and linkages, etc.

When should an IT strategy be documented?

Many small businesses believe they do not need a technology strategy because of their size. They believe that technology strategies are more for midsized businesses or larger enterprises. We however opine that every business, regardless of size should be desirous of realizing the gains and benefits that a business - IT aligned strategy provides.

Ideally, a technology strategy should be written alongside your business’ multi-year strategy. The technology strategy is a living document however, and should be updated regularly, including but not limited to during annual planning and half-term reviews.

A business-aligned technology strategy is necessary for a business to get maximum benefits from their technology investments and should be considered by all businesses irrespective of size.

This is the third post in our blog series on Business - IT Alignment. Join us next week for the next post in the series where we continue the discussion on Business - IT Alignment.

Are you considering documenting a technology strategy in order to get started on your organization’s Business - IT Alignment journey? Contact us to discuss or schedule a free consultation.

If you are wondering about how well your business and IT are aligned, consider taking Virtro's free, high-level Business - IT Alignment Assessment.

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