CIOs must position information and technology at the heart of the overall business strategy.
Noah Rosenstein, research analyst at Gartner
The CIO of a large renewable energy producer does not create an “IT strategy.” Instead, he contributes to the overall business strategy of the organization. But getting to this point was a considerable journey.
When he joined the company, IT needed to renew “pretty much everything,” so he created a roadmap in support of the business strategy. After almost four years of laying the technical groundwork and building IT’s credibility, the CIO no longer merely reacts to the business strategy; he has become part of the business leadership team that creates it. “As the CIO,” he says, “my job is to make sure that we use the right experts from the IT domain to actually look at the opportunities that technology provides and the threats that it creates.”
His journey reflects that of a growing number of CIOs and business leaders, who understand the need for information and technology to be embedded in the business strategy, rather than an afterthought.
Good strategy is hard work
Strategy has long been a considerable challenge for CIOs and their enterprises. Many CIOs and their C-level peers devote significant time and resources to developing strategies, yet end up producing documents that gather dust on a shelf. Some have grown cynical of the idea of strategy and would prefer to abandon it altogether.Simply put, strategy is “how we succeed.” In the private sector, it describes how an enterprise will compete and win in the long term, including how information and technology will be used to achieve business success. In the public sector, the focus is on how the organization will achieve its mission. Regardless, there should be only one strategy: the business strategy.
In Gartner’s 2018 CIO Survey, only 23% of respondents rated their organization as effective or very effective at business strategy and planning, and only 29% rated their organization as effective or very effective at IT strategy and planning.
Developing strategy is hard work, but doing it well is especially important during periods of rapid change.In the digital business era, CIOs and other business leaders need to not only ensure that they have a sound strategy but also rethink how they develop it.
3 ways CIOs approach strategy
While fully embedding information and technology (I&T) in the business strategy represents the target state, few CIOs are in this situation today. In interactions with clients, Gartner typically sees three scenarios.
- No formal business strategy. The absence of a formally documented or clearly articulated business strategy is both a major challenge and an opportunity for CIOs. If the business strategy has not been documented or clearly articulated, then I&T strategy should include a draft of assumed strategic business outcomes to be validated by the leadership team.
- Separate I&T and business strategies. When business and I&T strategies are separate, CIOs need to show the value of information and technology. The I&T strategy must be created in close collaboration with business leadership, communicatedand used to inform the business strategy.
- Single business strategy with I&T embedded. When the only strategy is the business strategy, the enterprise has already acknowledged the importance of information and technology, and the CIO will typically already be involved in shaping long-term direction. However, even with I&T embedded in business strategy, there are pitfalls for CIOs and their enterprises to avoid on the digital journey. For example, the enterprise might respond too slowly to opportunities, or lose track of business outcomes.
When addressing any of these three scenarios, CIOs must keep in mind that operational excellence and credibility are the foundation for a voice in strategy. CIOs who neglect core delivery may jeopardize the digital ambitions of the enterprise.
Good strategy is worth the effort
Developing strategy is a daunting and difficult task, and in the digital era it needs to be approached as a continuous and iterative process to be able to respond quickly to the accelerating pace of change. Many CIOs and IT teams spend so much time and energy focusing on operational challenges that they find it difficult to think about strategy even once a year, let alone on a continuous basis.
Like any other skill, you only get better at strategy by practicing frequently. Don’t worry about getting it right the first time. Take a page out of the agile development playbook and focus on getting started with a “minimum viable strategy,” knowing you will iterate and improve as you go.