We embed technology into the business strategy by first earning trust, credibility, and respect through IT Value Creation.
IT and Business Strategy
We’ve been discussing how IT doesn’t just suddenly align with the rest of the business. Rather, IT must demonstrate the value it creates and earn the trust, credibility, and respect from the business. That leads to IT being invited to do more strategic work, which then necessitates IT representation in the business strategy and ultimately results in full alignment.
This doesn’t happen overnight. Previous articles explained how to tell the signs of misalignment and understand the root causes, followed by explanations of the IT Value Journey and the 8-Step IT Value Creation Process. We saw how the IT strategic plan shifts from primarily maintenance to keeping up with enhancements to support the rest of the business and, ultimately to a state of leading business transformation.
In the Maintain state of the IT Value Journey, technology is at best an afterthought in the business strategy. In the Enhance State, some technology initiatives may be specified in the strategy. As we emerge from Enhance to Transform, technology becomes a foundation – or at least a key element – of the business strategy.
Let’s explore how we embed technology in the enterprise strategy.
Phases of Embedding IT Into Business Strategy
As IT proves the value we create for the rest of the business, technology initiatives begin to appear in the business strategy. Typically, the CIO must drive this process and it evolves in three phases.
Phase 1: List IT initiatives in the enterprise strategic plan
As we emerge from the Maintain phase of the IT Value Journey to the Enhance phase, we have established strategic IT metrics and are starting to measure continuous improvement. This is an ideal time to occupy a small space in the business strategic plan. Specifically, we can set a strategic objective to “Measure the value created by IT.” Goals associated with that objective might look like “Improve IT customer satisfaction by 10% while reducing TCO by 8%” or “Deliver 80% of technology enhancements on time, on scope, and within budget”.
This objective and these goals are to demonstrate how IT impacts the bottom line and increases shareholder value. They are simply a starting point for bolder technology objectives in the future.
Phase 2: List business technology initiatives in strategic plan
As the IT Value Journey takes us from Enhance toward transform, we can state technology objectives in the enterprise strategy, along with specific, measurable business outcomes. One objective may be to “Apply technology to improve business outcomes.” Goals may include “Enhance the order processing system to save workers 15 hours per month” or “Improve the customer experience with a new user interface for the e-commerce system”.
While we should continue to measure the value created by IT from Phase 1, we are adding to that value proposition by measuring specific, technology-based initiatives. These projects may be enhancements or new technologies. The key is that a business sponsor is signing up for the value proposition and we are tracking the cost and the ROI through the management of our strategy.
Phase 3: Technology is the strategy
As we reach the pinnacle of the IT Value Journey, the Transform state, IT has proven our value and demonstrated continuous improvement. We’ve gained trust, credibility, and respect form the rest of the business. And we are looked upon to transform the business. At this point, technology is the strategy, or at least a major component.
The key strategic objective, which should be driven by the executive team, is to “Leverage technology to create a sustainable competitive advantage.” Goals may include “Increase revenue per customer by 12% by applying artificial intelligence” or “Reduce order processing time by 40% through robotic process automation”.
Here, we are looking at technology objectives to transform the business by creating a differentiated customer experience. Technology is the strategy.
Trust, Credibility, and Respect are earned through IT Value Creation. As IT demonstrates more value, we earn the privilege of participating in a more strategic and, eventually, transformational role in the business. As this occurs, we embed technology in the business strategy in a phased approach that parallels our IT Value Journey.
For the final article in this series, we’ll discuss the critical importance of living with a spirit of continuous improvement.
We purposefully keep these articles brief and aim to provide high level guidance and trigger ideas. As always, if you want more information or don’t want to wait for the upcoming articles, email Emily Ford at Emily@WolffStrategy.com and she’ll set up a complimentary 30-minute consultation with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management, Digital Transformation, IT Leadership, and Executive Coaching. Larry has served as CEO, COO, CIO, Chief Digital Officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.
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