Think you don't need an IT strategy? Think again

Many enterprises have reacted to these challenges by separating and assigning digital-technology responsibilities to the chief marketing officer or establishing new roles for digital operations – without CIO guidance, and sometimes without a proper IT strategy.

Why take these responsibilities away from CIOs? This is often because IT is considered too slow to keep up with new business developments, or a lack of business knowledge, while technology has become readily available in the cloud. The approach might seem feasible in the short term, but in the longer term there are significant associated risks due to uncoordinated approaches. 

Looking at individual business cases, it might seem better to introduce new solutions, but operational costs due to increasing complexity are often overlooked. IT complexity is a silent killer of IT, with increasing costs and risk of failure.

Actually, however, with a comprehensive and business-aligned IT strategy, technology can be used to manage baseline costs as well as to drive top-line revenue. 

Therefore, CIOs should embrace this opportunity and work with the business to improve IT value through strategy planning. 

What are the criteria for a successful IT strategy?

1. Clear understanding of what technology can do for the business

In order for IT to be seen as capable and responsive, technologists need to understand in detail the business outcomes and what IT can do to enable them. CIOs should also take the opportunity to act as consultants to the business and push and pull information into the first phase of an IT strategy discussion.

2. Complete assessment of the current technology landscape 

No technology strategy starts from scratch; there is always existing technology in place that needs to be incorporated into the solution. The important part in the assessment for a holistic IT strategy is not to stop at the border of what is currently controlled by the IT department, but to consider also technology managed by a third party or elsewhere in the business.

3. Assessment of key trends, regulations and competition

Looking outside and assessing circumstances in the market is another key process. Trends assessment should not be limited to traditional competitors, but also new start-up competitors and players in other industries, where there are various technology aspects that must be assessed as to whether they can support the business. Last, any technology-related regulations need to be identified and considered.

4. Strategic themes defining priorities

Based on the steps above, IT strategic themes must be defined to highlight the priority areas that need to be focused on during the detailed target-state development, and must build the connection between the detailed technology activities and the business strategy.

5. Ability to think like entrepreneurs

Traditionally, the target state was often driven by detailed architecture diagrams. As the architecture diagrams are often changed because of the changing role of IT, this approach has become cumbersome and slow. CIOs now must think like entrepreneurs; build flexible and interchangeable solutions that can be easily dropped once proven not to be useful. This should include technical and non-technical aspects like people, processes and governance.

6. Value cycle starting and ending with the business 

An IT strategy starts with understanding the business expectations and ends with a well-defined path for achieving the business’s expected outcomes. Defining a road map with executable and prioritised initiatives that deliver against the business timeline is paramount to a successful alignment of business and IT. 

Finally, Deloitte’s recent work in this area has shown that seldom will a time horizon of more than three years be valid for an IT strategy, given the pace of change in technology. The target state also needs to be financially feasible by taking into consideration a high-level understanding of the costs as well as available skills. 

To manage all this, a comprehensive and business-supported IT strategy is mandatory for overall success.

 

Eric Peffer is director and technology advisory lead and Dennis Trawnitschek senior manager and IT strategy lead, Southeast Asia Consulting, Deloitte Consulting Ltd.