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Don’t forget about IT strategy in your business expansion plan

iRonin IT Team

Can information technology be a leading driver of corporate growth? Yes indeed, if it is embraced as an integral part of strategy, rather than shoved aside as a back-office function. In this article, we’ll briefly review the business life cycle, the essentials of business strategy, and then turn to the importance of IT strategy in supporting the goals and objectives of business strategy.

Business life cycle

In the startup stage of the business life cycle, a company is in its infancy. To have a chance at success a company needs to craft a strategy to distinguish its products or services to a small number of customers. Any profit is reinvested so that the company can establish market position and seek additional growth opportunities. If demand increases and profits become steady, the company may move into a growth stage.

A common central goal of growth-stage marketing efforts is to sharply differentiate product offerings from industry competitors. This effort requires additional capital, as does necessary investments in marketing, design, process improvement, and human resources.

Growth and expansion

At this stage, staff is in place to manage functions that the business leaders no longer have time to manage, and the business is well established in its industry. At this point it might be time to think about a serious expansion of your offerings into new segments or geographical regions.

Businesses in this stage often experience fast growth in cash flow, revenue, and profit—but it’s important not to get too comfortable. There is much risk in embarking on a careless expansion. The best possible chance of continued success will come with meticulous planning and strategy development.

To properly support the strategy for business expansion, it is vital to craft and implement an information technology (IT) strategy.

IT Strategy

IT strategy is a set of goals, tactics, and metrics that helps companies (or various departments within a company) to achieve their goals. One way to think about it is as a set of objectives: business needs, reducing infrastructure costs, or maximizing customers’ lifetime value by providing a better experience through improved performance. These can be translated into practical tasks, like reducing average loading time for the product index page to 200 ms or reducing the monthly cost of maintaining an IT infrastructure by 30%.

The next layer is tactical. To build it, answer questions like “how do I achieve this goal?” Analyze and review the current state of affairs, diagnose existing technical and organizational problems. You should end up with a list of tasks to achieve. For each of them, you should create a metric that will help you track your progress and assess the situation. It’s not always obvious at first glance whether a task has been achieved, e.g. with security-related goals.

Information Technology strategy is integral to business strategy, so it must engage other business units in advance to collaborate and help shape the plans for those units. After understanding those plans, it’s time to craft an IT-specific strategy that complements the strategies of the other business units. Because the IT department must enable many aspects of the strategies in the other functional and business units, it’s very important that IT becomes well-embedded into the narrative and objectives of each of those plans.

Lamentably, too many executives neglect the critical importance of IT strategy. It’s abundantly clear that the role of IT in the support of executing business strategy has grown significantly as more and more organizations are participating in and reacting to the large, global digital transformation movement. Because business can grow so much more rapidly as a result, it is more important than ever for business and IT leaders to put solid effort into crafting, executing, and tracking against an IT roadmap that is fully in alignment with the business strategy.

One important specific strategy is how to manage technical debt — both the debt that a company has now and will continue to accumulate in the future. Technical debt is the cost of additional work needed to maintain a software solution or an inefficient IT infrastructure. It can be acquired when unsustainable solutions have been used for initial development. The only way for your organization to succeed in reducing and minimizing technical debt is to manage it proactively.

Consequences of a poor IT strategy

All too often, many IT strategies are not strategic—at all. To repeat, this is likely because many executives neglect the importance of information technology. An effective strategy contains a clear set of definitions and long-range plans for the company. A solid IT strategy will also include clear statements on the information system requirements for the organization and also the approach to evaluation and adoption prior to any implementation. Despite the strenuous effort of hard-working leaders, many strategies don’t materialize into a productive implementation because they lack this clarity.

Successful implementation of IT strategy

While developing your IT strategy, ensure that it’s practical to implement and keeps costs down. Identify all essential KPIs (key performance indicators) and define key metrics so that you have a clear view to benchmarking and analyzing IT performance. Other benefits of solid IT strategy include:

  • Improved data security — Servers are protected and monitored against intrusions; your data is protected and backed up.
  • Continuous service access — Services are highly responsive and available with minimal outages.
  • Solid user retention levels — All factors and components of your IT solution contribute to a positive user experience, thus sustaining your user base.
  • Lower infrastructure costs — Often there are better alternatives to existing processes and technologies, but a company is unaware of them—or they don't know how to leverage it. Business leaders need external expertise to help find a way forward. iRonin offers a breadth of experience that helps their clients lower infrastructure costs.
  • Navigate compliance issues more easily — During a growth stage, technical debt is likely to accumulate, which can make it difficult to maintain and modify project artifacts. A solid IT strategy can help leaders avoid scrambling to remedy various compliance issues such as clear process descriptions and data flows, disclosure of special procedures, and the introduction of necessary protection standards.

After creating an IT strategy, it will be necessary to update it as the business undergoes change. There is much to gain from investing the effort to crafting thoughtful IT strategic plans, even if it must change considerably following a leadership review.

Need help in crafting or implementing your IT strategy? Let us know! Our IT experts will work closely with you to develop a solid plan to improve your IT environment, processes, and software solutions.

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