The question before us is this: Is information technology an enabler of business strategy? In order to answer this question I have done extensive research into the work and opinions of Nicholas Carr, Bill Gates, Peter Weill, and others. I then combined this research with my own experience in leading and improving IT and software development processes. The result of this extensive analysis is the following, definitive answer to the question:
“It depends.”
Wait — before you accuse me of weaseling out of the question, let me explain.
In some cases the strategy of the business is such that IT can be an enabler of that strategy. In other cases, IT is not a strategic enabler; rather it provides only that which is needed to keep operations going and enable the company to do business. In many cases, the IT portfolio of projects will include projects that enable strategy and projects that are strictly tactical. It is essential that an organization find out how IT relates to its strategy. If IT can be a strategic enabler but is not, the company might sub-optimize its strategy and miss market opportunities. If IT is not a strategic enabler but is treated as if it were, the company will over-invest in IT and business process capabilities that do not generate business value. To further complicate our “It depends” answer, market dynamics and technology might change IT’s strategic role over time, requiring the organization to regularly assess and reassess both strategy and IT’s strategic role. In this article, I offer proven frameworks for determining business strategy and IT’s strategic role. The process I use to sort through the decisions and options is:
• Determine, with strategic intent as a guide, the organization’s business strategy by identifying what brings it a sustainable competitive advantage.
• Use collaborative leadership and collaboration methods to ensure the quality of strategy and to disperse strategic decision making throughout the organization.
• Use business purpose to make strategy immediately understandable and usable. Competitive Advantage
The prerequisite to sorting out my “It depends” answer is to determine business strategy. This is not easy to do, and many companies struggle with it. Sometimes the business has defined its strategy but does not use the strategy to make choices or does not communicate a usable version of its strategy throughout the organization. For many years IT-business alignment has ranked as a top issue among business and IT leaders. The consequences of a poorly defined and implemented strategy can be catastrophic, particularly in today’s global, technology-driven markets. The landscape is littered with companies that hit a home run with a process or product that it could not turn into a sustainable competitive advantage. Getting strategy right is critical not just to answer the question about IT’s role as strategic enabler, but also because a well-defined, well-communicated strategy allows the organization to thrive and lead in an increasingly dynamic and chaotic marketplace.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.