How small businesses can benefit from strategic IT planning
IT or information technology is a crucial part of any business or company. Companies need to have a roadmap or an effective plan to follow because technologies are rapidly changing every minute. Also, there are conflicting priorities and the funding challenges that companies face every day.
Companies today need to have an effective strategic plan. The plan includes setting priorities for the projects and initiatives that will significantly benefit the company, especially if the resource and funding are limited.
One of these strategies is the IT Strategy, which defines how the use of information technology can support the mission and vision of a company.
What is strategic IT planning and how it can help small businesses?
Strategic IT planning is the process of aligning IT to the organization or company, and it involves creating a strategic plan.
A strategic IT plan is a document that describes the general technology-enabled business management procedures, which a company uses to manage operations.
Strategic IT Plan Components
The strategic plan must delineate the mission statement that tells what the company wants to accomplish. Also, it should state how the IT strategy identifies with the company’s overall business objectives.
Often, creating an effective strategic IT plan starts with evaluating the company’s strategic plan. The plan should help identify the areas where the application of technology can improve company operations.
The strategic plan must include a SWOT analysis. It can help in identifying any of the company’s technological resources, which might be a competitive advantage and that the company should think about investing in it.
Formulating the strategic plan starts with determining the company’s goals and objectives, vision, mission, and strategies.
Understanding the company through its vision and mission
The vision statement of the company
A vision statement is about looking forward and obtaining a mental picture of the ideal state that the company wishes to accomplish. It is about what every company wants to achieve in a specific time frame.
The vision statement must resonate with the members of the
company. It should make them feel excited, proud, and motivated, knowing that they are part of a company with a promising future.
The mission statement of the company
The mission statement is a brief explanation of why a business or a company exists. It explains the purpose and the general intention of a company. The mission should support and reflect the vision.
The mission statement exists to aid in the vision statement of a company. It serves to put across the purpose and direction to stakeholders, employees, vendors, and customers.
The company strategy
After a company has established its vision and mission statement, it should then describe what the strategies are. Strategies determine how a company intends to succeed in its environment. They are a series of ways of applying the company’s mission to achieve the vision.
Company strategies should cover both short-term and long-term goals. Also, the strategy should illustrate how to achieve those business goals. To move closer to achieving the goals and objectives, the company should focus on the immediate actions and the needed outcome.
Enter the CIO or the Chief Information Officer
The CIO is a high-level, often, an executive-level manager whose responsibility is to support the company’s vision, mission, and strategies by leveraging IT or information technology.
In other words, the job of a CIO is to bridge the gap between the IT infrastructure and the company’s business goals and then come up with a strategy of using IT infrastructure to support in reaching those goals.
Employing a full-time CIO is crucial for large corporations to stay updated about compliance demands, cloud computing, and the increasing threats to cybersecurity.
Why a CIO is not suitable for SMBs
A CIO is an executive-level position that could also be a member of the board of directors. He or she works with the company’s CEO and CFO to collect information about the company’s current status and pinpoint the areas that will improve through the use of technology.
For this reason, SMBs, especially those with a workforce of fewer than 250 employees, can not afford to hire a full-time CIO.
Enter the vCIO or Virtual CIO
A vCIO is, or virtual CIO is an outsourced IT service provider who performs the duties of a CIO. Most vCIOs are IT organizations whose services are paid on an on-demand basis.
Moreover, a vCIO can be paid for a set fee or by the hour. And, the cost of hiring a vCIO is only a fraction to that of a full-time CIO.
With a vCIO in place, business owners no longer have to worry every day about their company’s technology if it’s running the way it should.
Also, a team of employees who were assigned to manage the company’s technology can now concentrate more on their core responsibilities.
Furthermore, a VCIO can help in finding the best deals when procuring hardware and software.
Here are more advantages of using a vCIO:
1.Training and Experience
Keeping updated with the latest trends in technology is no need for concern as vCIOs are into it already. They are fully trained; they have the experience and are certified, professionals.
The vCIO is ready to begin at full speed. There’s no need for testing or having to wait for new in-house developed solutions to roll out.
Managing a business while also taking time managing the company’s technology is not an easy thing to do. Today’s technology is evolving rapidly, not to mention the increasing frequency of data breaches and hacking.
A vCIO can take those big headaches away as he or she assumes to handle several of a company’s compliance and security risks.
Managing a company’s big strategic technology questions is one of the vCIO’s role. On the other hand, the management team concentrates on the company’s core business operations.
With a vCIO, a company only pays for the services on an on-demand basis. Hiring a vCIO turns a fixed cost into a variable one.
A vCIO can assist in strategically mapping out a company’s technology for quick improvements and adequate growth over time.
Computer systems can continuously accumulate more and more information over time. A vCIO can transfer data, reduce redundancy, establish a storage plan, share data effectively, and minimize the risk of data loss.
Small businesses are vulnerable to cyber threats. A vCIO helps to ensure that a company’s computer network is secure. Also, he or she will create a backup and disaster plan for the data and operations.
Companies need an IT strategy.
What is an IT strategy?
The information technology strategy or IT strategy is a full-scale plan that defines how IT and the company’s business goals are met using technology.
The strategy should consist of all aspects of technology management, which also includes:
- vendor & risk management
- Hardware & software management and
- Human capital management
The execution of the IT strategy will require the strong leadership of high-level managers, which are the CIO and the CTO or chief technology officer.
The CIO and CTO must closely work together with the business, budget, and legal departments to achieve its success.
Validating the IT strategy is done through a written document or what’s known as the balanced scorecard strategy map.
The documentation and the plan itself should be highly flexible to change to respond to new:
- organizational circumstances
- technology advances
- core competencies and available skill sets
- business priorities and objectives
- market and industry conditions and
- user needs
The importance of an IT strategy
If a company doesn’t know where it wants to be in the next 3 to 5 years, how does it ever stand a chance of getting there?
Strategic planning is an activity that drives companies to set goals and objectives. It makes companies think about setting up priorities. Most importantly, it allows companies to create a tool for obtaining what is important.
Strategic planning provides a system for decision-making
Managers find it difficult to get their employees to think the same way they do. But, a strategic plan gives managers a way to tell their teams what they’re thinking. A strategic plan allows employees to decide for themselves and move initiatives forward.
Encourages companies to respond to change
There are many instances of businesses that failed because they did not embrace change, which is especially true when we are dealing with IT.
Strategic IT planning allows companies to plan in many ways so they can do their best to ensure that they remain successful. It encourages companies to prepare for unexpected changes.
The basics of an IT strategy
The strategic IT planning should start in the company’s business strategic plan.
For instance, if Digital Transformation is what the company’s business strategy wants to invest in, IT must interpret what that means for existing operational processes, architecture, governance, skills, sourcing, and culture.
A robust IT strategy should present a layout to show how technology supports and shapes the overall business strategy of the company.
The strategic goals must reflect the business projects (or business alignment) and should consider the needs of stakeholders, business partners, employees, and customers.
The strategy should offer a glimpse at the company’s current technology posture and give an idea of where IT is heading over the next 3 to 5 years.
Although information technology is a technical subject, the IT strategy should be more of a business document rather than a technical one. The paper should have no technical jargon and must be written clearly and concisely.
Strategic IT planning best practices
1. Start with the company’s business strategy
Strategic IT planning should start with the business strategy.
The strategic plan should consist of a roadmap to boost compensation, reshaping the IT department’s culture to assist the company more effectively and interact with the customers and stakeholders directly in a global technological change.
2. Strategize without delay
Even if the strategic IT planning is important, the time to develop it shouldn’t be too long.
There should be no delay in developing the strategic plan to prevent scope screep, loss of focus, relevance, and diminished currency.
Set up the metrics of success
Key Performance Indicators or KPIs are essential to the strategic planning process. There should be a tight integration between KPIs and the business strategy.
Measuring and reporting of KPIs should be done once a month. But it would be better if tracking is done more frequently.
The 6 stages of strategic IT planning process
The strategic planning process consists of steps every company goes through to determine the:
- Vision-the direction of the company
- Mission-what the company is going to do and for whom
- Goal-how to formulate the strategy to get the company where it wants to be
Several methodologies can guide a company when it comes to the strategic IT planning process.
Here’s a basic template comprising of the main steps of the process:
1.The planning process overview
The strategic IT planning process leaders must establish a long-term vision and then create the company’s mission statement.
2.The company’s long-term vision
It is necessary to explain the real objectives and the strategic guidelines that a company wants to achieve. Therefore, a company needs to analyze the human resources and technology that it already has.
Also, the company should analyze market trends and future technological environment where the company plans to accomplish its planning objectives.
3.Identification of gaps for the strategic IT process
To identify the gaps and recommend the necessary steps, the process leader should study all of the company’s systems, technology assets, and operations.
And then, the outcome of the study should be compared with the long-term business prospects, which are described in the preceding steps.
4.Schedules and budget
Building an effective strategy plan includes a “roadmap,” the investment plan, and budget.
5.Strategic IT planning process implementation
Based on what was defined by the company, several decisions can be made to attain agreed-upon goals and objectives. The planning process comprises training, system integration, vendor and selection of software, and hardware procurement.
When the implementation of the planning process is done, it is crucial to evaluate the results, which should be compared with the company’s objectives defined in the preceding phases.
Strategic planning processes can directly affect how well a company performs in the long run. A company has so much to gain, especially if the creation of the IT strategic plan is lead by a consultant or a vCIO. If you want to know more about how your business can benefit from strategic IT planning, contact us today!