Many IT departments and CIOs fail to employ an IT strategy that is right for their organization. However, when these strategies are well-defined, aligned and executed, they can be very powerful.
Here are five signs that your IT strategy may not be working:
- Your current technologies haven’t been updated in the last decade. Our average client replaces their ERP systems every ten years. For some, even that is a few years too long. As a good rule of thumb, if you’re not replacing your major enterprise systems every decade or so, you’re falling behind your competition, and failing to leverage the exponential improvements in technology over time. It’s one thing to take a low-cost, low-risk, incremental approach by keeping your IT investments for as long as possible, but it can be a slippery slope of falling too far behind on technology.
- Your IT strategy isn’t aligned with your overall business strategy. Too often, CIOs and IT departments have good intentions that aren’t aligned with a bigger picture business strategy. For example, a company that wants to reduce capital costs, but implements a SaaS solution instead of an on-premise technology, will have conflicting priorities. During IT strategy engagements, we typically start by defining the company’s top five to seven strategic objectives, then define specific IT objectives that will support those overarching business strategies. This enables the recommended IT strategy to align with bigger picture and longer-term organizational strategies. Below is an example of a strategy articulation map that we often use to define this alignment:
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- You haven’t considered all of your technology options. Some think that an IT strategy needs to include a big, complicated and costly ERP implementation. However, ERP software is just one potential technology solution for your organization. Digital transformation, mobile, business intelligence, CRM systems and eCommerce are just a few potential technology alternatives. In addition, business process reengineering and organizational change management are two potential options that don’t involve technology. Whatever paths you explore, it’s important to objectively consider all of your options to develop the strategy that makes the most sense for you.
- You don’t have an actionable plan to begin upgrading your enterprise technology. You may have already completed steps 1 through 3, but your IT strategy is meaningless without an actionable and realistic plan to implement. Once you’ve defined your general strategy and direction, it is important to outline a multi-year roadmap for how you’ll realize your overarching vision.
- Your IT strategy doesn’t meet your organization’s ROI thresholds. Successful IT strategies should ultimately meet the minimum ROI thresholds defined by the organization. Strategies that fail often do so because they don’t meet these simple criteria. Your IT strategy should fit the cost, benefit and risk tolerances that have proven to work well within your organization. For example, we recently began a project with a very risk-adverse organization in a mature industry with very low margins. Based on these economic realities, we know that we won’t be recommending a high-risk or high-cost solution that compromises those already thin margins and risk intolerance. Ensuring that the cost-benefit of your strategy fits with your needs is an important aspect of a successful IT strategy.
If you haven’t thought about your IT strategy lately, it may be time to take a look. When the backbone of your organization isn’t adding value, your organizational goals become harder to attain.