Welcome to the 7th âIT Strategy Mattersâ newsletter. Iâm delighted that you are on this journey with me.
Iâm conducting some research. If you have not done so already, please help me by sharing your views in the IT Strategy Matters survey at https://forms.office.com/e/MDZam3JjXN
It's anonymous, but if you leave your details, I'll let you know how your answers compare with your peers.
I believe that IT strategy matters! And what matters is how IT leaders and team members develop and deliver valuable strategies, how they work effectively with business leaders and end-users to do so.
So, whether you are an IT leader, IT professional, business leader or a user of IT services, your opinion matters!
Thank you for contributing to my research. Your input is valuable and much appreciated.
Can IT strategy lead business strategy?
Have you ever wondered how IT drives business growth? This is a question that I have puzzled over for much of my 25 year-long career. As 2024 draws to a close, and I look forward into 2025, it seems that now more than ever this is possible.
If youâre an IT leader, an aspiring CIO, or a business leader who wants to be sure to be leveraging the best of emerging technologies, then getting your IT strategy right will be more important in 2025 than ever before...
A change of focus and priorities
I started my career in the late 1990s. Personal computers were commonplace in offices, many business applications were hosted on servers within a LAN. Most businesses were connected to the internet, and we were about to experience the .com Boom!
These felt like exciting times, especially for someone at the beginning of their career. IT was very much still seen as a cost of doing business. At best, it was a key enabler of business strategy and efficiency, but often it was seen as a utility which needed to be procured and delivered at minimal cost.
The Millennium Bug overshadowed the late â90s as well. This classic example of technology debt drew budgets to avoid a double-digit date disaster, which meant that many organisations did not have budget for technology innovation and transformation.
The CFO was a common reporting line for the most senior âIT personâ in an organisation, and only in the most technology-focused industries, or the most enlightened organisations did that âIT personâ have a seat on the board.
That said, investment was being made into the wide-scale enablement of business process with technology. I started my career as an SAP consultant and at the time many businesses were transforming their physical operations and financial accounting by implementing ERP (Enterprise Resource Planning) systems such as SAP.
The changing importance of IT for business
Letâs take a look at how the importance of computing and IT has changed for business over the years:
Early Era (Pre-1950s)
Main Uses:
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Mechanical Tabulation Machines: Early computers like Charles Babbage's designs and Herman Hollerith's punch card machines were used for basic calculations and data processing, such as the 1890 U.S. Census.
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Telegrams: Facilitated faster communication across borders, aiding international business.
Shift in Priorities:
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Businesses began to see the value in automating repetitive tasks and processing large amounts of data more efficiently.
Mainframe Era (1950s-1970s)
Main Uses:
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Room-Sized Computers: Used for complex calculations, data storage, and processing large volumes of information.
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Automation of Business Processes: Early business computers helped automate tasks like payroll and inventory management.
Shift in Priorities:
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IT was seen as a tool to improve efficiency and reduce manual labour. However, it was still considered a significant cost centre.
Personal Computer Era (1980s-1990s)
Main Uses:
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Personal Computers (PCs): Became widespread in offices, enabling individual productivity and decentralised computing.
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Office Software: Applications like word processors, spreadsheets, and databases revolutionised business operations.
Shift in Priorities:
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IT started to be seen as a way to enhance individual productivity and streamline office tasks. The focus was on reducing costs and improving efficiency.
Internet Era (Late 1990s-2000s)
Main Uses:
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Internet and Email: Transformed communication and information sharing within and between businesses.
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E-commerce: Enabled businesses to reach global markets and conduct transactions online.
Shift in Priorities:
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IT became crucial for business communication and operations. The focus shifted to leveraging the internet for competitive advantage and expanding market reach.
Mobile and Cloud Era (2010s)
Main Uses:
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Mobile Devices: Allowed employees to work from anywhere, increasing flexibility and productivity.
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Cloud Computing: Enabled scalable and cost-effective IT infrastructure, facilitating innovation and collaboration.
Shift in Priorities:
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IT was now seen as a strategic enabler of business agility and innovation. The focus was on leveraging technology to drive growth and improve customer and employee experiences.
AI and Digital Transformation Era (2020s-2025)
Main Uses:
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Artificial Intelligence (AI): Redefining business processes, customer interactions, personal productivity and decision-making.
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Digital Transformation: Integrating digital technology into all areas of business, fundamentally changing how businesses operate and deliver value to customers.
Shift in Priorities:
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IT is now leading business strategy rather than being subservient to it. The focus is on using technology to drive revenue growth, innovation, and competitive advantage. IT leaders are increasingly seen as business leaders, responsible for defining products, markets, and strategies.
The trend over this time has been for IT to become more strategically important and less of a utility cost. Much like how the Covid pandemic accelerated the shift to hybrid work which was slowly happening, so the development of Generative AI has accelerated the slow progress of IT strategy to drive business strategy.
The fact that technology can now not only make the business process and strategy better, but can open up new revenue lines, customer bases and capabilities that business leaders did not know existed, really elevates the technology strategy and the impact that it can have.
So, as you look forward into 2025, itâs more critical than ever that you have a great IT strategy, and that this inspires and enables the business strategy.
âOur industry does not respect tradition â it only respects innovationâ
Satya Nadella â CEO Microsoft
Itâs your responsibility to drive that innovation for your organisation.
Your IT strategy needs to be:
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Consultative: We often consult widely on small decisions but make large decisions in isolation. This is completely the wrong way round. Your IT strategy is the most important decision that you will make, and it affects everyone in your organisation, so consult widely.
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Inspirational: Whilst user needs and pain-points are still an important foundation for any IT strategy, as we discussed above, it is now the responsibility of IT to inspire and lead the business. The best modern, strategies are a combination of business and user-led and technology-led.
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Implementable: A great idea that canât be implemented is worth nothing: Your plan to deliver is at least as important, if not more important, than the idea itself!
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Transformational: IT strategy must change things for the better and do so for as many people as possible. That wide consultation that you did recruited an army of supporters for you. Leverage them to power a revolution, not just deliver a project!"
Thank you for reading this edition of IT Strategy Matters. I hope you found it useful and informative. Please feel free to share it with your colleagues and friends who might benefit from it.
Until next time, remember: IT strategy matters!
Dan â The IT Strategy Coach
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