Hidden Profits Blog

Finding the Gold in Your Business

Hidden Profits Author:

Lynda J. Roth

As the president and founding partner of Woodland Hills-based LJR Consulting Services, Lynda advises clients on ways to improve profitability and productivity through both technology and business processes. She also works with companies and private equity firms on the role of information technology in mergers and acquisitions.



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IT Strategy Embedded In Business Strategy

Google alerts are Great!  I found a great blog by Steven Romero at CA Technologies on the importance of IT Strategy. 

I have discussed IT strategy here based on the concept of aligning the IT Strategy with the Business Strategy.  Steve discusses embedding IT into the business strategy discussion.  This is a subtle yet a very important difference.  When an IT Strategy is merely aligned with the business strategy it implies that the IT Strategy comes after the business strategy as support.  While just creating an IT Strategy is a major step forward for your company, it is still only a partial solution.  By embedding IT Strategy and thus the CIO in the Business Strategy process, you now are in the position to take advantage of advances and trends in information technology to influence your Business Strategy. 

So how does that help you? 

Well let’s look at some companies that have used Information Technology to change their industries.

  • Amazon.com completely changed the book retail industry by making technology the business focus. 
  • Dell is another example of a company that embedded technology in their business strategy to completely change an industry. In fact it so changed the industry that many people don’t even realize how difficult it was to purchase computers before Dell.   They leapfrogged over some of the biggest competition in the world, IBM and HP. 
  • To a lesser extent, Vistaprint has changed the printing industry.  You no longer have to find a printer to create business cards and stationary.  You go online create your look and the products are printed and shipped directly for a fraction of the cost. 

All of these examples are focused on the internet but that is not the only way that technology can be a game changer. Other technology options might include:

  • Mobile devices for customer facing applications, executive dashboards, and source data entry
  • Document management to reduce paper and copies
  • Electronic workflow to replace manual routing of paper forms, such as PO, expense reports, capital authorizations etc., for approval
  • Electronic marketing

 By including the CIO in the business strategy process, you open your business to experiencing significant leaps in productivity, profitability and customer loyalty!  And just as importantly you reap tremendous value and success from your investment in Information Technology.

For more information on this topic read Steven Romero’s blog    Read Steve’s blog 

Prior posts on IT Strategy

How an IT Strategy helps control IT Spending  http://www.hiddenprofitsblog.com/how-to-manage-it-spending

What is IT Strategy  http://www.hiddenprofitsblog.com/what-is-an-it-an-it-strategy-or-it-roadmap-and-why-do-i-need-one

If you would like  help with your IT Strategy, contact me at 818-709-6583 or email info@ljrconsultingservices.com

What is an IT an IT Strategy or IT Roadmap and Why Do I Need One?

Filed under: IT Roadmap, IT Strategy, Information Technology, Information Technology Strategy, finance department — Lynda Roth at 10:24 am on Friday, August 6, 2010

At some point you have probably heard the quote, ‘If you fail to plan you are planning to fail’.  And with that individuals create goals and plans for their careers, life, vacations and companies create corporate strategies, annual plans and budgets etc.

However, how often does a company create a strategy for Information Technology.  I’m not talking about an IT budget although there are plenty of companies that don’t even have those.  An IT budget just defines how much of the corporate funds that IT department is allowed to spend and on what products/services.  What I am referring to is a strategy on how the company will utilize information technology to create competitive advantage, to open new markets, to brand the company and to support the operations of the business.

What do I mean by an IT Strategy or IT Roadmap?

An IT strategy or IT Roadmap is a detail plan that defines how and where information technology will be utilized in the company.  It identifies areas where management believes IT can be used to:

  • Improve productivity and reduce cost
  • Create a competitive advantage
  • Improve intra-company communication and cooperation
  • Improve financial controls
  • Increase market share and open new markets
  • Provide new opportunities for customers, partners and vendors to interact with the company 

It defines the priorities of the opportunities/initiatives, assigns responsibility/ownership and defines date and timeframe for each initiative. 

Like most plans it should encompass both short term and long term goals.  So it should include a vision of what the company would look like with all the desired functionality implemented over a 5 year time frame.  Then each initiative should be prioritized and placed on a 5 year, 3 year or 1 year schedule.  Finally a detailed 18 month plan should be defined that includes initiatives, projects, timelines and estimate cost and resources.

Why do I need to have an IT strategy or IT roadmap?

IT is no longer just about how to document the business transactions so it can be accurately reported to the IRS, the bank and other outside entities that need a picture of the financial status of the company. 

IT impacts every part of the business.  As a result there are many competing priorities from all areas of the company.  At one time accounting was the primary consumer of IT services, however, today IT touches everyone in the company, customers, vendors and partners.  So needs must be assessed, solutions identified, costs estimated and priorities set for all those competing interests.  In addition a path needs to be defined on how to get from where you are to where the company wants to be.  One of Dr. Stephen Covey’s 7 Habits is ‘First Things First’.  This is critical to define in an IT strategy.  Every IT initiative requires infrastructure, systems, and resources.  If those are not addressed in the correct or most logical order, the result is a failed and/or significantly over budget project.  A good IT strategy will define prerequisites and enable you to put the initiatives in the correct order for success.

To get more information regarding creating an IT Strategy, contact Lynda at 818-709-6583 or email info@ljrconsultingservices.com