A key part of my job role is helping existing IT staff, whether internal or external, to re-align themselves with Business Strategy. Gartner suggest that 80% of IT resource (time, money and people) is ‘wasted’ on managing and securing the network. Only 20% of the resource is directed at Business Growth strategies. With IDC estimating that a typical SMB spends 5-10% of their annual turnover on their IT budget this means you could be spending 8% of revenues for no competitive advantage.
Whilst not always the case, this can have the effect of the IT team being seen in a negative light – as a cost centre, a necessary evil. The departmental managers (Head of Sales, Head of Marketing and so on) see IT as a functional body that is necessary for running the business, but really they only interact with them when they have a new starter needing a laptop, or Exchange has gone down “Where’s my email!!!”
I help IT teams to better align themselves with the business strategy by outsourcing the repetitive and non-differentiating tasks (like running email) and to focus on the Business Growth strategies – perhaps increasing the attachment rate of products per client, or increasing the number of new clients, or reducing the debtor days for invoices. It is now that I must rise up and make a stand for IT Departments around the world.
How many of your employees could tell me your Business Strategy?
If I walked into your office, and stopped four random employees, perhaps someone from marketing, a new operations employee, a customer support exec and your Legal counsel, how many of them would be able to tell me, “Our business strategy revolves around 4 key tracks…..increasing new customers, increasing attachment rates etc etc.”
Now it might be that in the board room you don’t know what the key strategies for the next 18 months are, and in that case there are bigger problems afoot, but it is likely that if I asked you or your Exec team you would have a very clear idea of what your strategies were and how you were applying your resources to achieve them.
The problem that I have come across in many businesses is that this strategy is not being effectively filtered down through the business. It’s almost as if the Exec just assume “well of course everyone knows what the plan is.” However unless there is a formal communciations strategy – perhaps a regularly updated intranet, posters around the offices, quarterly calls updating on the progress, an internal YouTube channel hosted on Google Apps, a Summer or Christmas party rewarding employees for progress against the strategies, then what is very clear in your head can become very, very vague in your employee’s heads.
Bringing this back to your IT team, and indeed any of your functional teams – sales, marketing, legal, finance or operations, if every individual in every team has a different idea of what they think the strategy is, then they will all be pulling in slightly, or very different directions – ultimately making it less likely you will get to your Business Growth goal.
For example – in your mind you have a strategy to reduce your cost base in these times of austerity. Because you haven’t been clear about what you mean your IT team see this as a budget reduction exercise and push their existing suppliers to reduce prices and save 5% across the board. Excellent work. However, had you communicated better they would have understood that IT could spend a little more, and implement some new solutions that would save much greater costs across the business.
Perhaps a transfer to a new CRM package that automatically nurtured leads from lead to opportunity meaning no requirement for a telemarketing team. Or perhaps a transfer to a new Cloud accountancy package that automatically linked into your CRM system and Bank account removing the need for a data entry book-keeper.
Without a clearly defined business strategy for all departments to follow, teams will just make up their own, and it will make it so much harder for you to take the business where you want it to go.