> IT Strategy 101: What Your Company Needs to Know
IT Strategy 101: What Your Company Needs to Know
Computers and information systems are essential parts of every business today. Every business needs to invest in technology to compete. It forms the cost of doing business and creates the opportunities to do more business. The questions that every business must ask when building and growing their department is clear: the who, what, when, where, why and how of setting up and arranging a successful, functional IT strategy.
The basics speak for themselves:
Establish a well-defined IT infrastructure strategy and roadmap.
Collaborate effectively to provide IT solutions to support your business needs.
Use your IT function to broker the right technology services for the organization.
Collect, analyze and document your performance measures.
When you ask the why, you ask the first key question. Why are you doing this? Why are you working to build up a strong IT system and what will come from this technology? The obvious is to reach more potential customers and develop a better working business relationship with them and your partners/investors. Without them, there is no business. The basics continue on:
Streamlining operations, reduce costs, improve efficiency, maximize profit, minimize waste, and devote talent to the core business instead of overhead.
The next question follows: how much can my business spend? Established businesses outside the technology industry typically spend between ½ percent and 10 percent of their annual revenue on technological infrastructure development, depending on how their industry is doing.If you're at the low end of tech spending, you may be missing out on some key benefits technology can provide: real-time data collection, large-scale analytics, increased speed to market, enhanced productivity and a better customer experience. If you're at the high end, you may be spending more than you need to on proprietary solutions, or you’re a leader in your industry, provided you made some smart strategic investments.
So, what do you spend your IT budget on?
This is big because it defines your IT infrastructure. These are what you need to pay attention to:
Initial cost – hardware and software are based on your corporate need, which could come with overhead should not only the system need updating but the IT department, staff and the building itself. On top of all of that, everyone must be trained, regardless, in the technology’s use.
Ongoing cost – maintaining the system, whether through a comprehensive IT staff or a third party servicer, can be expensive. Other ongoing costs include licenses for any proprietary software, hosting, and support, as well as, 24/7 help services, insurance and warranty protection.
Upgrade cost – as your business grows, so does the need for inevitable upgrades. There is also the added costs from both the expected and unexpected lifespan of systems, equipment and upgrade frequency.
Value proposition – there’s always the added cost, non-monetary, of time. How much employee time will the projected system save? How much new business could the system generate?
Opportunity cost – on the flip side, how much potential revenue is lost by not implementing this system? How will your business fair against your competitors?
Risk – risk exists, no matter what. Those should be analyzed and evaluated before any system is implemented. What could those risks be? What will it cost to mitigate those risks?
The where and when go hand in hand. Should you spend most of your technology budget on infrastructure, hosted applications, custom line-of-business applications, or what? When should you do it? Can you make the full changes immediately or will it take time? There's a fine line between too much and not enough. Spend too much on technology, and it will consume your time and budget, leaving you ill prepared to do anything else on your business. Spend too little and your competition may improve their business to the point that you can't compete.Finally, you need who, as in, who will help implement these tech decisions into your business. You can do it yourself, buy an off-the-shelf product or free software to get you started. You can spend money on a programmer for customization, use a hosted IT system or hire a consultant to plan it out for you.
The safest, long term decision is to hire a consultant or IT adviser to help your business use the best quality software and equipment services to help grow your business.
The answer, ultimately, depends on your industry and your vision of growth. Following and interpreting these steps to fit your model can aid your business to reach its highest, and most profitable, potential.