Get An IT Strategy
But developing that strategy more often is seen as an academic exercise than something that actually can have day-to-day relevance for the business, so it tends to remain an amorphous concept rather than a practical reality.
Richard P. Skinner is out to change that mindset. With more than 40 years in the IT business, including heading up IT at organizations with around $100 million in revenue, Skinner has up-close and personal experience with the struggles smaller businesses have as they attempt to grow and to have IT support and scale with that growth.
Hes seen and driven change at IT shops that were working just fine until they were faced with sudden growth, in one case from about $12 million in revenue to more than $100 million.
Twice during my tenure the IT department stopped functioning properly, he says. It wasnt keeping up with the business and aligning with the business. We all worked harder and more, but the same things werent working.
With external assistance on IT strategy being slim in the small-business market, Skinner and his management team at that organization began developing their own principles, which he further developed throughout his career.
I have been able to prove that I can take the strategy and drive it into tactics, and managing individual employees, and make strategy have meaning on a daily basis, he says.
bITa Planet recently caught up with Skinner, whos sharing his insight into IT strategy for smaller enterprises through two self-published books, IT is About the Strategy and IT Tactics.
bITa Planet: Is there a misunderstanding of what constitutes an IT strategy?
Skinner: No one I have worked with yet has come up with a strategy they can name and tell me what that strategy means. IT people say they align business with technology, or they do creative outsourcing, maybe software as a service. They name the fairly high-level tactical things that they do. But theres a huge void in strategy in SMBs.
I think that a lot of CIOs are successful without a strategy because you throw a lot of money at technology and it works. And a lot of the tactics do work regardless of having a strategy or not. For example, software as a service is a good tactical move, but it doesnt have to fit under any kind of strategy to be successful.
[And] the business leaders are very guilty of not knowing good IT from bad IT. They hire a guy [to lead IT] that can talk technology, bits and bytes. That person runs IT for a long time, but the business people dont know how to evaluate what they are getting out of IT spend and the IT department. You can get by with a lot of bad IT, with making a lot of bad IT decisions, without having a strategy, and be somewhat successful, because the yardstick for what is good and bad IT and a successful IS department is not there.
There are a lot of small businesses spending too much on technology without knowing they can spend less, and being forced to rebuy because they make bad technical decisions and bought stuff that doesnt scale or grow. And they build a lot themselves. They build a LAN using freeware and shareware, they have pretty creative solutions but 90 percent of them wont scale. Then you hit a wall at some point because you brought in a lot of the wrong technology and IT doesnt work well, and you spend all your time on day to day support and not making any progress and customers start to suffer.
bITa Planet: So the business has to take responsibility here?
Skinner: The business leader has to get it. I wrote the book (IT is About the Strategy) originally for business leaders. Until they understand IT, the technology people dont have a chance. And I dont believe many of technology IT leaders will make the transition (from being a technical head of IT to a strategic head of IT). Small businesses plateau at $75 million or $100 million and they cant grow because they wont change out leadership. That IT guy got them there, but now hes standing in the way of the business because he or she usually isnt strategic and not always able to make that transition. The business leader probably has to make a tough decision: Who got you there probably wont get you to the next level.
Whats your proposition for an IT strategy?
IT Tactics is about how a strategic approach drives down into tactical maneuvers, and drives that down into performance measurements and job descriptions that make sense for employees. When I did this [at one company], I had low turnover because they understood tactically why they were doing what, at individual level performance metrics that mattered, and everyone knew what they needed to do to perform well, and get raises, and how that tied into tactical and strategic things. A lot of companies expect high turnover in IT, they expect some tactical efforts to work and some not to work. They are not as successful ass they could be, in my opinion.
Lets take the business process strategy that is the largest one I talk about. Most IT organizations are not organized properly. They always organize around technologies server group, network group, telco group. And only in the larger organizations, really large like JP Morgan, do they organize around process.
Almost all small businesses at a certain size need to organize around process. There shouldnt be a server group; there should be a server engineering process, a server support process, and in breaking out from a process perspective you get responsibility for servers in several places service desk, second-level support group, and engineering, which is responsible for design and research and configuration of servers. You build performance metrics based on responsibility for some part of the server support process.
My second strategy is technology focused. This is needed a lot when companies have reached a plateau, and things are working well, and theres a good customer base, but you have problems growing the business. Usually IT is part of the problem we cant add new customers or lines of business because our technology group cant support that. We dont have the right systems or infrastructure in place. Its a business model strategy that is very much technology-focused. First, you lay out your business model in a flow chart, from looking for customers, to serving customers and getting them to pay you. Then you lay technology models on top of the business models. If you take a look at the technology model over the business model, with a bit of work you can identify those strategic technology areas that are impediments to the business.
In the book I use an example of mail-order medical supplies. To ship products we needed doctor and patient signatures, which was a very manual effort. It didnt take much work to say document management was a key inhibitor for the business, and to grow the business we had to solve the document management problem, and make that a strategic area of focus. This was compared to what was done previously, which was spending several million dollars in marketing and customer handling projects that didnt fit with any strategic plan and were not helping the business. A strategy forces you to focus on the right stuff and lets you go back to the business and stop projects that are not in a strategic area of focus.
Then theres the business layer strategy. The business layer strategy says stop being good at infrastructure. Theres no reason you need LAN or WAN experts in a small IT department. Theres nothing you can do in infrastructure to give you a competitive edge. Outsource that as much as possible. Build it like a commodity. If a small business leader has to think about network bandwidth speeds, thats a problem.
How do CIOs who want to succeed as strategists practically embrace these models?
Unless the IT department is really struggling and the business recognizes it, they are not open to discussing it, to planning ahead for the next barrier. But its very important for the CIO or IT director to get in the face of the business people and say, Heres what I think you are trying to do and heres how Im going to try to service you. The IT persons job is to push the business into strategic thinking of some sort, or else it feels like the IT person doesnt have a chance.
This article appears courtsey of bITa Planet.com.