Many IT directors feel they are outside the loop on devising a
business strategy, but they can focus on four areas to show the
business they have long-term success in mind.
Even in the most effective organisations, ownership of the IT
strategy rests at the highest level, rather than being the sole
preserve of the IT function.
Not a new idea you might think, but the reality of IT's strategic
contribution is very different. In a recent survey by Deloitte of
300 UK chief information officers, only 9% of the respondents saw
themselves as playing a leading role in the development of a
business strategy.
But how far ahead should IT directors plan? And how should they
structure their long-term strategy?
IT strategy has to have cyclical planning, based on three- or
four-year fixed timescales. Planning must be ongoing and more
responsive to changing business, technological or economic
circumstances. This flexible IT strategy should be based on four
key areas.
Business building blocks
The first area is the basis of any business - the software
applications that support and enable all business processes. IT
investment should be prioritised to focus on using business- and
value-oriented criteria to prioritise investment.
IT architecture must be flexible enough so that new, emerging
technologies such as radio frequency identifications tags can be
adopted and integrated easily with existing software at an
appropriate point in the future.
Financial investment
Every IT project needs up-front investment. The ongoing cost of
supporting IT needs to be optimised so that it does not drain
investment funds away from future strategy. This need not be overly
complex - straightforward demand analysis should reflect the
requirements of business plans and therefore support required and
future costs.
IT infrastructure
Technical infrastructure - datacentres, servers, desktops and
telecommunications services - should be the third plank of an IT
strategy.
Many CIOs are minimising costs for the business by using a shared
service centre to run IT and business processes for different
business units and subsidiaries, or by encouraging end-users to
carry out more administrative tasks themselves online.
Management decisions
The final component is deciding how a service should be delivered,
ideally taking advantage of low-cost sources of IT services and
resources.
With these challenges comes the need to adopt new IT governance
structures and processes. CIOs must consider how to embrace the
advantages of an offshore or outsourcing model without losing the
ability to control and manage the business.
For instance, a bank could set up its own offshore delivery centre,
purchase an existing facility, form a joint venture or outsource
part of its operations to a services supplier.
Choices made in each of these prosaic areas can have fundamental
impacts elsewhere. For example, how often should desktops be
renewed? This must be considered alongside the software demands of
the users, the ability to run appropriate up-to-date versions of
desktop software and the ability to support and maintain it.
A newer suite of desktops will allow automatic delivery and
updating of software and save costs through remote first- and
second-line support. But updating all desktops on a shorter
timescale will cost more.
All these areas are also inter-dependent, which is why it is so
vital to explore the bigger picture rather than being distracted by
the finer detail. CIOs have to make decisions increasingly quickly.
What seems a straightforward, tactical decision, such as renewing a
telecoms contract, can - in time - have profound, widespread
implications.
By adopting a strategic and rapid approach, IT leadership can give
you the ability to maintain a context within which these tactical
decisions can be taken.
Richard Porter leads the CIO services team at
professional services firm Deloitte