The Importance of a Long-Term Technology Strategy

Posted by Timothy Platt on Nov 26, 2017


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.

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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.

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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:

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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:

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).

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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.

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