At CGI, we don’t believe in mainstream IT strategy. Even using that phrase can sometimes set organisations on a dangerous path towards investments which may bring little or no business benefit, despite their intuitive appeal.
That danger originates in our profession’s ingrained impression that IT is somehow different, and therefore warrants its own strategy, written along different premises to that of the wider business.
We need to stop thinking that way, and remember IT’s purpose. For most organisations, technology is primarily an internal investment which must pay back by enabling the organisation to meet its business goals. More on this later.
Conventional “IT strategy” is the natural consequence of outdated IT thinking.
Decades ago computers were only used to automate human tasks, making those tasks faster and cheaper to execute. Computers were an operational efficiency measure - nothing more - and because they were largely unintelligible to anyone outside the Data Processing department, only the experts could be expected to know how to maximise that efficiency. Those experts crafted a new discipline called “IT strategy” which usually resulted in a long-term plan of technical upgrades and enhancements, with precious little alignment to business direction.
This restricted view went largely unnoticed in the 80s and 90s when business strategy was also largely focused on efficiency. The Japanese led the charge towards everimproving prices and quality… and the rest of the world followed.
Nowadays strategic thinking has moved on, and most companies plan how they’ll reach and sustain a well-differentiated market position.
Critically, IT can play its part here too. Technology can be used to reach customers in new ways, speed time-to-market, broaden product portfolios, and even support entirely new business models (think Apple, Facebook, Amazon, but also Tesco, GSK, Barclays). Today’s IT has the potential to bring more value in the front-office than in the back-office.
Unfortunately the dominant IT thinking hasn’t moved quickly enough. Instead efforts have remained focused on optimisation, with ever more sophisticated models for governance, procurement and systems architecture. A paper by Peppard and others expresses this phenomenon succinctly: “organisations are too preoccupied with manipulating the denominator – reducing spend, and are failing to focus on how deploying IT can create business value.”
As a result most long-range IT planning is still founded on trying to do things cheaper, faster or more reliably, so most IT strategy still fails to demonstrate proper alignment with business direction. It’s great for the CIO to save 20% on IT costs over five years, but if IT represents just 3% of total expenditure, then it may not be the real priority. CIOs and other IT leaders must discover what really is important, then bring their plans in line. Only then can they credibly claim to make a strategic contribution in the eyes of the wider organisation.