The Importance of a Long-Term Technology Strategy

What is a technology strategy?

In this article, we’ll discuss a critical strategic planning component of your business – the technology strategy. First let’s define what it is. The technology strategy is a long-term roadmap by which the business will evolve its technology base and future tech acquisitions to improve the business’ ability to make money. When describing the technology strategy, we use the term “business” a lot and maybe redundantly, but this is for a very good reason. The single most important defining element is that is is driven by the business, defined by (or in conjunction with) the business, and the sole purpose of its existence is to meet business needs. In other words, the tech strategy is not to fulfill the IT staff’s need to dabble in the latest and greatest technology or to spend money randomly. Every element of the strategy must align with a business objective.

Does my business need a technology strategy?

If your company relies on technology for any of its business operations you need a strategy. It’s not a bold statement to say that in the year 2017, business of any and every size are utterly dependent on technology. Sales, marketing, purchasing, accounting and finance, production and operations, and human resources- all cannot function efficiently without their technology. Even businesses that spend most of their time “in the field” providing service in decidedly low-tech endeavors have a corporate or main office overflowing with technology, sales and marketing, and more as well. We’ve established you’ve got one or more important business functions dependent on technology – should they be using that technology in an inefficient and random fashion? No, they should not. There should be an understanding of what they use, and why, and where it falls short. The strategy may be short and sweet, or long and complex, but the principles apply to all.

What are the benefits of a technology strategy?

The technology strategy is a roadmap that lets you get from your starting place to a better place. Your business can have a guided path of actionable items to eliminate the shortcomings and pitfalls of your current state, remain aligned with budget, and pursue improvements over a time frame that results in a rate of change acceptable to your business and employees. That is the benefit of a technology strategy.

Important aspects of a technology strategy

At this point, if you are still reading, hopefully you are convinced that your business needs a technology strategy. Let’s discuss in more detail the key aspects of this strategy:

• Business Alignment – At the risk of being redundant, let’s once again underline this important point – the purpose of the strategy is to help the business fulfill their needs. First and foremost, this means that the goals and objectives of the strategy can be linked directly and unquestionably to business needs. Remember that without the business, there is no need for the technology. Later in this article, we’ll highlight some typical business driven needs.
• Roadmap – It’s a roadmap, a way to get from “A” to “B”. What does that mean? There are objectives, and goals. There’s a sense of how to change things to reach those goals. And there’s a sense of the timeframe that it will take to get there.
• Long Term Timeframe – We can’t the change world in a day and we may have more needs than we have available budget – so we’d better plan well in advance. There will be milestones and objectives, but maybe not a lot of specific dates. We’ll fill those in as we go, and as money (and time) is available to enable goals to be achieved. This will take time and we’ll plan around business-critical events – such as month end, year-end financials, etc.
• Future Focused – We’ll consider the future and ensure the technology you will need will be there when you need it. We’ll try and predict where your competitors will be (when that information is available) and ensure you can keep pace, or pass them up. If your strategy only encompasses one year, you aren’t planning far enough ahead. Maybe your company doesn’t plan that far, that’s OK, we can make reasonable assumptions. The far future level of detail and clarity of the specifics will not be as sharp and well defined – but as we’ll discuss further shortly – the strategy is a continuously evolving concept by design.
• Rationalized – Every item is created with a purpose and a goal, a goal that can be articulated to the business and those that need to know (board of directors, executives, managers, and employees.) When explained to management, they can clearly understand why the goal is important to the business.
• Business Needs – It’s got to fulfill specific goals and needs of the business. This is a long topic, we’ll go into further detail below.
• Balanced with Budget and Reality – The goals, and the methods through which the goals are achieved, must be within the budget and reality of timelines. It’s rarely possible to “rip and replace” entire systems or foundational technology without massive impacts to day to day operations. We need to maintain a realistic outlook in terms of timeline (the rate at which improvements can be realistically implemented) and in terms of budget availability. Budget availability can fluctuate according to the business cycle, of course.
• Updated regularly, but not that often – As the business year unfolds, there will be surprises and new or changing business requirements. Therefore, we expect to revisit the strategy quarterly, or twice a year. If you are making major updates to your technology strategy monthly, it’s either too granular, too detailed, or not well formulated in the first place.
• It’s never “Done”-There is no end date, no finish line. Your business and technology is evolving and changing every day – whether you realize it or not. Consider the following examples: business growth or contraction, regulatory and compliance changes, external challenges (natural, national or global), and of course, the constantly evolving direction of the business.

Example Business Needs

There’s no cookie cutter template that can applied to your business. The items that determine your starting point include where you are at, how well managed the technology is, and lastly, where the business is headed directionally. With that disclaimer out of the way, here are some example business needs:

• Basic “fit for purpose” of foundational technology – Making sure technology provides the basic function it’s supposed to do, at a level of quality that makes it useable. For example, if dropped phone calls are causing a loss of potential sales revenue, a plan can be put forward to find a cost-effective solution for a better phone system. This need is representative of any sort of shortfall in the current foundation, and will probably be prioritized high in the strategy.
• Business Continuity – Addressing deficiencies in the process and control for important functions is very typical in a long-term roadmap. The process and redundancy to maintain continuous business operations in a disaster is a prime example of where the technology must meet the business need. Not sure what the business continuity need is? Map out an initiative to discover that, before implementing.
• Security – The challenge of cyber security is evolving every day. Increasingly business partner requirements and government compliance needs are driving more security, as opposed to less. These are core, foundational aspects that might not map direct to revenue, yet need to be addressed. Demonstrable evidence of a plan to improve security are frequently requested by business partners or clients.

How do I create a technology strategy?

As with any good set of roadmap directions, first we must understand where we are at. The current state of technology, what is used, how it is used, and how it falls short of the needs. Secondly, we incorporate the goals of the business – what’s not currently in place that is desired? Those items are not deficiencies of the current environment but improvements or completely new capabilities. Once that’s well understood, we can take a stab at a set of priorities – which are most important to the business. With a prioritized list, we can then formulate a high-level set of resource estimates – labor and costs – as a “rough order of magnitude” estimate. This helps produce a Return on Investment (ROI) when the business goal can be equated to revenue, but if it can’t be linked to an ROI, priorities can still be established. With this information, we can work with the business to finalize a list of priorities stretching over multiple budget and business cycles to achieve the objectives. This is the map that tells us how we get from “A” to “B”. Lastly, people often have issue planning for the long term – the human need for precision and detail is opposite of the ability to foresee precise conditions in the future. Therefore, it’s important to understand that a 3 or 5-year plan isn’t going to be excessively detailed – especially in the far end of the time scale. As timelines proceed and budget becomes available, we’ll revise the strategy by adding finer details and spinning up projects as needed to implement (or change the roadmap as needed).

What is the role of the Chief Information Officer (CIO)?

Given that the strategy is a long-term plan, it includes the biggest and most important initiatives. These are significant investments for the business – in terms of real money, labor, and opportunity cost. Therefore, there’s got to be a sense of what the best technology options are. The technology chosen must provide a useful lifetime of multiple years to the business. Throughout this whole process an expert leader is needed that can incorporate a long term, deep understanding of effective technology and fuse that with a true understanding of the business rationale and goals. That person is the CIO. The CIO is the primary technology leader within the company. He or she helps elaborate the vision, helps formulate the goals, builds support and champions within the business, and lastly, applies their vast knowledge of technology and business to ensure the roadmap is right. The CIO is a leader and inspires and leads the implementation teams to a successful outcome. Lastly, consider that “CIO” is a role and a function. It sounds like a lofty title, but it’s really the idea of a strategic technology leader that can bridge the gap between IT and the business. In our experience, this role is always needed, in every business.

Does every company truly need a CIO?

Nobody can show up at your site and produce a business aligned technology strategy in an hour’s time (and unless your business is trivial – probably not in 8 hours’ time or even a week’s time). It requires a deep and continuous understanding of business need and challenges. In our experience, much of this tribal knowledge can only be extracted from living it, it’s not written down, and even if it is, it’s not going to be in a format a total outsider can truly use. Given this, and the fact that the very definition of the strategy is that it’s a continuously reviewed and evolving document – it makes the sense to have an ongoing presence and involvement for the best chance of success. And therein lies the challenge to small and medium size companies – there’s a continuous, ongoing need, for a technology leader who is in step with the business, but not a full time need. We can help.

The Orlando IT Company that Cares About Your Small Business

Virtual Operations is the Orlando IT company that cares about your small business. The computer support partner you choose can make all the difference. Our Managed IT Service offering provides the expertise and proactive care required to ensure your technology works for you. We are Orlando’s top small business tech support, and that is the advantage that Virtual Operations provides.