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The Importance of Strategy

Posted in by on January 17, 2014 and has no comments yet

As most of us are now back to work after the recent festivities, it is a natural time to look at the year ahead and make some key decisions about what we want to achieve in the next 12 months. In a business context, we might refer to this as our ‘strategy’. While personal strategies or ‘resolutions’ such as getting more exercise or eating less junk food often fall by the wayside by Australia Day, our businesses cannot afford to be so relaxed about sticking to goals. In this post, we’ll be looking specifically at the importance of your organisation’s IT strategy.

Lots of business-related concepts are often taken out of context and misunderstood. IT strategy is one of them. With the recent convergence of digital technology, such as cloud, social media, mobility and analytics, IT has become more of a strategic weapon than a functional unit supporting the business.

This development not only offers a new set of strategic options but also poses new questions for executives:

By broadening the role of IT to exploit technology trends, how can we help deliver sustainable competitive advantage?

How can we make IT a significant driver of innovation while maximising the benefits of business innovation?

At the same time, some traditional questions remain critical:

How do we align IT and the business while ensuring that the IT strategy is flexible enough to adapt if necessary?

How can we focus the IT project portfolio to ensure optimal resource allocation and alignment of IT investment with business needs?

With so many explanations of IT strategy, which one is relevant? 

On the one hand, some people venerate the term and use it with admiration, where IT strategists are placed at the upper end of the payscale compared to other IT professionals, such as developers or DBAs, thus maintaining a level of mystique that feeds its own success. On the other hand, IT strategy is trivialised and treated as if it were a commodity.

Anyone between analyst and CTO is a strategist and has an opinion on IT strategy. It’s akin to everyone thinking of him/herself as an excellent driver, contrary to the evidence we experience on our roads everyday.  Yes, everybody holds a definition of IT strategy, so there is little surprise that there is general confusion about what the field of IT strategy actually consists of and how it contributes to business outcomes and success.

In reality, there is no agreed definition of IT strategy, which leaves us to come up with a definition that everyone can work with.

So, what is IT strategy?

  • IT strategy is an cyclical process to align IT capability with business requirements
  • It is a process, not a point-in-time event
  • It is iterative; success comes after multiple trial and error cycles

The key is the alignment of business and IT capability rather than designing IT to address business requirements:

  • IT and the business need to drive each other; they are interdependent and one cannot be established without the other in place
  • Business strategy requires IT input at the conception level to be effective and competitive in a digitised world

IT strategy sets the direction for the whole IT function in an organisation:

  • Ensuring that maximum IT budget is spent on value creation activities inline with the business strategy
  • Ensuring that the IT budget maximises a return on the investment

IT strategy is about how IT will help the enterprise to win business and to succeed in an increasingly competitive and dynamic marketplace. Business and IT leaders must sync their strategies to achieve the speed and agility required to meet these market expectations and at the same time remain focused on the cost effectiveness of IT initiatives. This breaks down into IT guiding the business strategy, and IT delivering on the business strategy.

It can be challenging to bridge gaps between business units and the IT department and to unite them around a shared vision that powers the business. In other words, companies must fuse business and technology. Although some or all tasks involved in creating the IT strategy may be separate, and there are normally separate documents, IT strategy it is an integral part of the business strategy.

We at Asq, are uniquely positioned to facilitate the conversations that fuel the new partnerships, mindsets and governance models that are needed so that business and IT strategic planning can co-exist. Our business and technology expertise spans industries, disciplines and all types of technology. We understand how to address market pressures, leverage core and emerging technologies and align employee talent to seize business opportunities and to solve problems. Our solutions are custom designed to transform your business and drive distance between you and your competition. Contact us for a chat about your strategy.

About the Author

Anton Wiesmann

Anton Wiesmann

Anton Wiesmann’s knowledge and expertise is based on his 20 year career as a senior manager spanning the airline, healthcare and consumer industries as well as global IT service providers. His key interest covers business strategies around competitive dynamics, core competencies and knowledge management and the related changes in the competitive landscape that are unfolding in a post globalised and digitised world.

Anton provides businesses with insights of the dynamic capabilities necessary for organisations to succeed in an environment of hyper competition, unprecedented customer choice and global collaboration. His academic research and publications are predominantly concerned with the systematic identification of organisational components that hold the potential for sustained competitive advantage.

Holding a Masters in Information Technology from RMIT, Melbourne, Anton also graduated with a Bachelor of Applied Computing from the University of Tasmania.  He also holds a Graduate Diploma in Management Research and a PhD with the University of South Australia, researching competitive advantage and strategic management.

Anton has written a Master Dissertation on Scale Economies in Outsourcing.  A white paper on “The Specialized Enterprise” is available upon request. 

Connect with Anton via Asq or via the Asq LinkedIn group.

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