For decades now, companies have been trying to figure out what was the best IT strategy for their business. With the increasing demand of cost reduction, the large spread of service best practices (ITIL, CoBIT, CMMi, etc…), the development of strategic sourcing in IT, the consolidation of Enterprise Solution Vendors (Oracle, SAP, etc..) , we can argue that companies do not have much choice in term of strategic directions for Information Technology. So moving forward, will companies still need an IT strategy?
It could be useful, to come back for a moment, of what we mean by IT strategy. Leaders are today expecting from IT, the promise to deliver value thru a specific set of tactical guidelines such as:
• IT must be aligned with the business strategic directions
• Enterprises need to standardize technologies and solutions as much as possible to leverage economy of scale, and reduce cost.
• IT departments need to develop continuous improvement program to deliver best in class services, enhance customer satisfaction, limit environmental impact, and better manage the return on assets and its cost.
• IT departments must strive for simplification of system and technology footprint to limit the hidden cost of the company: Duplicated entries, redundancy of critical information and their related maintenance etc…
• IT department must excel in the make or buy decision and the management of its vendors
• IT department must offer a resilient security & risk framework, protecting Enterprise assets, its employees, partners and shareholders.
• IT departments need to excel in delivering, on time, on cost (IT related) projects. See “Project Documentation – Value for money?”
Most of IT leaders will recognize that these statements are today part of a foundation which is necessary to develop any business in the world thru Information Technology. Although these management expectations seem relatively simple, IT departments are fully dedicated to create and sustain this capacity. Subsequently they are using dashboards to monitor their performance toward the achievement of these key principles. Making strong governance, project management discipline, supplier management, Enterprise architecture and risk management the cornerstones of a performing IT organization.
Does it constitute an IT strategy? If this is the case, we have to admit that all businesses should follow essentially the same approach, and therefore the uniqueness of the strategy does not define a competitive advantage anymore, but rather the simple fact to address a barrier to entry. (See “CIOs – Create your Blue Ocean Strategy“).
We could see in IT strategy other aspects more focused on the selection and prioritization of appropriate technologies, and delivery models for the Enterprise. For instance the selection of a standard ERP solution, the off shoring of developments, the use of open source technology etc… We can conceive that this critical competency could be integrated in the Supply Chain function with a specific expertise in Information Technology. It could then challenge again the specificity of an IT strategy.
Another fundamental of IT covers the ability to address new customer requirement and develop unique competitive advantage by revamping the business model that the company operates under. This characteristic encompasses the capability to innovate in the marketplace, and required the full engagement and dedication of different functions and competencies. We see here that it can not be the sole responsibility of IT, but rather the commitment of senior management to develop such capacity as the whole for their business. Therefore having a pure IT strategy on innovation could fail to deliver on its promises.
Understanding what we mean by IT strategy and the necessity for this function to be fully integrated within the business, lead to challenge its own existence, and subsequently the very nature of the CIO position in the future.
There is no question here about the utility of IT in organizations as running a business without it, is nowadays merely impossible. But the positioning of IT in the Enterprise is and will continue to be the subject of a lot of discussions in the future. We can see already today that more and more CIOs are reporting to Supply Chain, Finance or Operations functions. Does that constitute really a trend? Whatever the answer to this question is, CIOs should be ready to discuss their positioning and forge their own mind. That could constitute the true nature of IT strategy in the next decade.