Business-Driven Technology Strategies
Business technology executives have different notions about what comprises a technology strategy. Most of these notions are wrong.
For some, it means high-level summary statements about the direction of technology. For others, it consists of a tactical set of plans around a major application suite, such as an integrated enterprise resource planning application. These limited views represent the conventional wisdom across most industries and within most organizations. They have little or nothing to offer when it comes to creating and sustaining true alignment (let alone synchronization or convergence) of business and technology.
Business strategy must start at the top, with the board of directors, executive committee and office of the CIO being the key stakeholders. Without this level of involvement, management teams are far more likely to experience business technology-related failures, and then to focus more on the symptoms than on the root cause. When you hear that “technology just doesn’t understand the needs of the business” or “they don’t deliver” or “what they’re giving us we don’t need,” you’re seeing symptoms of an organization without a business-driven technology strategy.
Such a strategy begins by articulating capabilities necessary to achieve the business strategy, and then the technology needed to enable those capabilities. Intimate knowledge of the business architecture, operating models, capabilities and processes will provide actionable inputs for an astute business technology management team. In fact, a true business-driven technology strategy incorporates three critical elements: enterprise business strategy, enterprise technology strategy, and technology function strategy.
Identifying Required Business Capabilities
A business-driven technology strategy begins by articulating the capabilities necessary to achieve the business strategy, and then the technology needed to enable those capabilities. Intimate knowledge of the business architecture, operating models, capabilities, and processes are actionable inputs for an astute business technology management team. In fact, a true business-driven technology strategy incorporates three critical elements: an Enterprise Business Strategy, an Enterprise Technology Strategy, and a Technology Function Strategy. They each cover:
An Enterprise Business Strategy outlines the strategic goals, imperatives, and initiatives that the company is pursuing, including specific business capabilities that make it all happen. There may be an overarching business strategy for a group of business units (for example, shared services across multiple business units); however, each business unit is likely to be pursuing strategies specific to its segments as well.
An Enterprise Technology Strategy outlines the strategic direction for business technology. It specifies a plan for deploying the technology to meet business capability needs and support the business strategy, and can even help shape the enterprise business strategy when enabling technologies are available to create sustainable competitive advantage.
A Technology Function Strategy outlines how the technology function develops, deploys, operates, and supports the systems needed to deliver business technology. Consequently, both the Enterprise Business Strategy and the Enterprise Technology Strategy drive it. In turn, these higher-level strategies may be limited or enabled by the capacity and abilities of the technology function. The function level includes those assets that support processes and infrastructure across multiple organizations and locations, including both centralized and satellite technology groups, as well as, individuals performing technology roles in the business user areas.
In thinking about business technology investments, a basic four-step process should be followed. That process begins by defining a enterprise’s strategy and goals, and then determining the business capabilities it needs to realize those strategic objectives. These are the most critical decisions an enterprise can make with regard to business technology investments. Next, selecting the highest priority capabilities is also a very complex undertaking, requiring a thorough analysis of the business in order to finally choose which investments to make.
Working through analyses of these various areas and assets increases the overall knowledge of what is taking place across the board. It is only after establishing its current state, that an enterprise can effectively set the course for its future state.
Faisal Hoque is the founder and CEO of BTM Corporation. A former senior executive at GE and other multi-nationals, Faisal is an internationally known entrepreneur and thought leader. He has written five management books, established a non-profit research think tank, The BTM Institute, and become a leading authority on the issue of effective interaction between business and technology. His next book, The Power of Convergence, will be available in May 2011. © 2011 Faisal Hoque