IT strategy should take the long-term view

Many IT directors feel they are outside the loop on devising a business strategy, but they can focus on four areas to show the...

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

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