Wednesday, June 17, 2015

IT Strategy as Integral Part of Business Strategy

IT needs to go from supporting to engaging, IT Strategy is an integral part of business strategy.


The biggest challenge now is the increasing rate of change, and this isn't going to change! The objective of the IT strategy is not just to be aligned with business strategy, but the IT strategy is an integral part of business strategy. IT strategies, services, and solutions, absolutely need to be able to respond in an agile way and change themselves! In detail, how to craft a good strategy, and how to execute it effectively?
IT is not just to support strategy, IT strategy is an integral part of business strategy: The main problem is that business executive still limits their vision of IT as “IT supports a strategy,” CIOs role as C-level is to contribute to the formulation of the business strategy where new trends of technology will provide strategic business capabilities to the business that will enhance the competitive advantages of the organization. CIOs should have the knowledge and ability to demonstrate that IT capabilities as a strategic enabler of the business and CIOs to be part of the executives for articulating the business strategy. The main issue is the knowledge gap of business executives to the trends of new technology and its impact on the business. The main role of the the CIO is to demonstrate to the other executives the added value provided by technology using the business language (as businesses cases). CIOs should have a holistic view of the business from the business executive perspectives and to provide added value of technology. Now, Information Systems are impacting every business activities at the organization, CIOs should have the strong business knowledge to be able to communicate with the other executives.


At the end of the day, the organization must be centered on its clients. In the case of IT, the organization is "the client," as well as end customers. IT should be inviting the ranks of business professionals, C-level, directors, and managers to periodic review meetings that discuss the performance of various technologies. The role of IT is important, and the functional purpose of IT is still an enabler of business unit success. However, the IT Strategy can be a vague concept to the IT professional. Why? Because IT leadership needs to know the strategy of a business before any IT plan can be created to be an integral part of business strategy. The uncertainty of the business strategy will be the real challenge to the CIO as to design an IT Architecture which has the complexity due to the technology trends at the different layers while maintaining its agility for accommodating the dynamics of the business requirements. On the flip side - we need to look at IT as a business resource. The insight IT managers, Directors and CIOs gleam from various measurements of bits and bytes can be amazing. The help-desk team has a front row seat to organizational culture and behavior. The developer customizing web pages, customizing databases, or customizing applications across a global organization can speak to you in terms of lifecycle and bandwidth behaviors.


The business strategy lifecycle has for many business models progressively shortened. This is a process of evolution. At which point there is a need to re-brand 'IT Strategy' as 'Digital Strategy' is open to question; different departments or divisions within an organization have different speeds. And now it is the reality to run a bi-modal business with both industrial speeds for stability) and digital speed (for agility). In practice, even in the simplest organizations, the 'Speed' is not homogeneous across the enterprise (differences between 'front office' & 'back office,' enterprises with multiples businesses and associated business models). So many organizations will have to 'mix & match' at least two different speeds' with appropriate IT governance styles, accommodating the resulting different IT strategy cycles.  That makes the overall governance tricky since each department needs to align to its own speed in the market. So the point of view is that the group IT strategy need to focus on the fastest speed available - because that is the main threat to competitiveness. Also, it is necessary to understand that no department will suffer from being challenged too often. Challenging does not mean replacing strategy, but rather quality assuring the strategy.


IT Strategy and Digital Strategy are integrated into business strategy: A digital strategy is not just about the plan to design a pretty website or marketing strategy, it has a purpose of driving customer engagement and experience as cross-functional responsibility, uniting all silos to contribute to great customer experience. The IT Strategy is how to leverage the resources and assets of the IT departments to create the optimal business value - which in the next step, will generate revenue growth, brand or increased market shares. The IT strategy is the responsibility of the CIO and works as a foundation for driving business success. The two types of strategies can be integrated, but it is important to understand that responsibility, objectives and needed resources to be successful. It's the responsibility of the CIO. The CIO is not simply the leader of the enterprise's IT departments, The CIO role is an enterprise leadership & executive role who is the enterprise executive responsible for leadership of the information agenda, which includes driving customer engagement and experience as a cross-functional enterprise responsibility.


IT needs to go from supporting to engaging: IT is responsible for the information agenda from a provider’s perspective, but CIOs need to take more proactive approach cross-functional border to see things from business lenses, it is a differentiating point between digital IT as an innovation engine and a traditional IT as a back-office. IT is to provide accurate information and applications to store and allow modeling of information. But, departments such as marketing, finance, HR, and business - are responsible for applying the information to their businesses with an aim of generating revenue growth, motivated employees, customer experience and engagement. There are different departments, with different roles and ways of leveraging the data in the organization. The CIO leads on the provision of information, and that various functions across the enterprise are responsible both for deciding what they need and then using it strategically & operationally. The CIO and his/her people need to collaborate very closely with other functional CxOs and their people to ensure optimum outcomes. But in all such relationships, the CIO needs to have a very good grasp of the overall business, its strategy, marketplace, business model and competitive distinctiveness to ensure that the IT-enabled services supplied to the enterprise deliver maximum value at acceptable cost with optimum service.


Running a digital IT is all about Speed, Agility, and Innovation. IT strategy is an integral part of a business strategy which takes a more holistic approach (cross-functional) and describes how the company as a whole can create a superior customer experience, improve employee engagement; and help business build a full set of competitive capabilities for long-term prosperity.  

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