IT strategy

What is IT strategy

In terms of modern management strategy is understood long-term (as a rule, long-term) as the action plan aimed at the development of the company and achievement of certain results of its activity, as a rule — these or those competitive advantages and financial performance (i.e. some target status of the company). The need for strategic planning usually arises because of fast changing of business conditions.

IT strategy usually is meant as the long-term plan of actions for information technology development in the company (i.e. its IT infrastructures, information systems, IT department). IT strategy is an important part of corporate strategy, however modern realities are like that that usually not enough attention is paid to its development, and only after a quantity of the made mistakes and for nothing the spent means the company management begins to think of strategic planning in the field of IT.

Approaches to development planning of IT

There are several different development approaches of IT strategy — from the most complete lack of precise plans and financing of IT by the residual principle before the weighed coordination of development plans for IT with development plans for business.

The most widespread approach is, perhaps, planning of accumulation of power of technical means without accurate determination of the purposes of similar actions. Without being the strategy literally of this word, the specified approach is more or less justified for the companies having stable and invariable processes and not facing threat of their replacement from the market of competitors (for example, for the state enterprises having monopoly for certain types of activity).

The approach which is also not strategic and based on attempts to implement the latest technologies without the real need for them and without planning as such is slightly less often applied. This approach can be very risky and expensive in implementation therefore only the few companies can afford it.

One more approach which was much more more weighed and less extreme, than previous, consists in identification of the most significant fields of activity of the company and in first-priority implementation of their automation. At the specified approach it is very important to select the most important areas (at the same time not always the company management has a full consent on this matter). The specified approach was widely adopted in some western countries at the beginning and the middle of the 1990th years. One of classical approaches to formation of IT strategy is its creation on the basis of already available business strategy. In this case for IT department, in the same way as well as for other divisions of the company, the plan supporting the strategy of all company is developed taking into account that the IT department is the auxiliary service supporting the main business processes of the company.

And effective the approach based not just on consideration of IT department as one of departments of the company, but also on taking note of information technologies on business development as the factor capable to provide to business additional strategic benefits is considered more progressive recently. This approach is recommended in books of ITIL Information Technology Infrastructure Library. Within this approach development of IT strategy represents the analysis of business processes of the company and need of their automation, the mission, the purposes and tasks of IT department and on their basis is formulated determination of the main directions of development in the fields of rendering IT services, IT infrastructures and business приложениq, the personnel structure and organizational structure of information service is made.

What gives to the company IT strategy creation

The lack of IT strategy most often leads to the fact that the IT department is engaged generally in project implementation not connected directly with strategic objectives of the company, with each other and solving highly specialized local problems and also "patching of the holes" (on it most often leaves the most part of the IT budget of many companies) which are formed as a result of already completed similar projects and the "zoo" of technologies created with their help. At the same time return from investments into similar projects as like those are executed without requirements of business development, can be more than doubtful. Besides, the similar situation causes negative and negligence of staff of the company to specialists of IT departments and their activity, and they whatever highly skilled were, begin to be considered as service staff, but not as full participants of business development.

Existence of the IT strategy presented in the form of the formalized document allows to develop effectively IT infrastructure on the basis of correct submission of requirements which should be implemented for successful business development of the company and also to execute in advance planned steps, progressing to achievement of the planned purposes. Strategy should be the instrument of adoption of the tactical solutions corresponding to business objectives of the company.

Let's note, however, that in the conditions of constantly changing market IT strategy can be also modified, at the same time it is also desirable to formalize this process.

In a similar situation in staff of IT department there have to be not only system administrators and developers, but also the business analysts capable to estimate current situation of the company, to predict development of its business, to describe business processes of the company, to offer methods of their improvement and on the basis of these data to formulate requirements to future IT projects.

Naturally, for IT strategy implementation the IT department needs understanding and support from company management. The main problem in this case is that implementation of IT projects is very often perceived as the next ejection of funds for wind, any errors of staff of IT departments are noticed at once by other employees whereas in the presence of successfully working IT infrastructure and business applications the work which is carried out on their support usually remains unnoticed. Justification of the IT budget and that is more essential, the proof of real return of investments into IT, is considered nearly the art available not to each head of IT department now. Criteria for evaluation of success of this or that IT project often are badly formalized, and it increases their subjectivity — correctly to estimate a deposit of information technologies as such to success of all business not always it is obviously possible.

What should be defined in IT strategy

First of all in the document reflecting IT strategy the purposes should be formulated and tasks of business of the company implemented using information technologies on their basis should be defined long-term goals and the directions of information technology development in the company and functions of IT department. Conceptual approaches to implementation of different strategic tasks should be reflected in the same document (for example what of tasks are given on outsourcing). At last, on the basis of the analysis of the current state of information technologies and IT department it is necessary to define the plan of achievement of their target status and to formulate criteria for evaluation of success of implementation of stages of this plan.

At the same time it is worth noticing that IT strategy is a conceptual document which should not contain unnecessary technical details as its audience are not only IT specialists. All technical details of project implementation, the description of organizational procedures, specifications of technical means can contain in annexes to IT strategy or in other documents^[1].

In conclusion we will note that costs for development of IT strategy irrespective of, it is executed by the staff of the company or specialists of third-party consulting firm, are much lower, than the expenses on problem solving connected with its absence. However development of IT strategy hardly makes sense without participation in this process of the Chief information officer and company management. It is senseless and in the absence of business strategy — in this case, perhaps, it is worth being limited to the approach considered at the beginning of article based on planning of growth of computing powers or the choice of the most priority spheres of activity for automation.

Chronology of events

2020: Abbyy: more than a half of the Russian companies changed IT strategy in 2020

On December 18, 2020 ABBYY, the world developer of solutions in the field of intellectual processing information and the analysis business processes, announced completion business processes the Russian of the research "As Changed the Companies in 2020". By its results it turned out that within a year of 57% of the companies were forced to change IT- strategy. 65% of respondents noted that increase in business performance will become the purpose of the majority of the innovation projects in 2021, and 51% emphasized importance of involvement of new clients and sales increase. At the same time, despite the declared digital transformation, most the companies use traditional methods for preparation for implementation of technologies: 54% of respondents poll employees. Only 9% of the Russian companies use the intellectual analysis for this task business processes. Most of all such respondents – among representatives banks and telecommunications.

What main objective of your IT projects in 2021?
Source: ABBYY 'As business processes of the companies', changed 2020.

Survey of respondents was conducted in November, 2020, heads and employees more than 300 industrial enterprises, telecom operators, banks, retailers and other companies participated in a research. Robotization of business processes (Robotic Process Automation, RPA) was one of the most perspective technologies. More than a half of respondents reported that they already implemented robots or are going to use RPA in the nearest future. It corresponds also to results of a global research of ABBYY according to which 46% of staff of the large organizations use robots not less than 2 hours a day for problems of document classification and information processing. At the same time 30% of respondents of ABBYY of the companies note that one of key obstacles for implementation of robots is the impossibility to estimate potential efficiency of the project.

Events of 2020 significantly changed priorities of the Russian business. Increase in number of clients, creation of new channels of service became the main task for many companies which pushed similar projects the background earlier. Robots began to implement in harder and harder processes gradually to reduce dependence on presence of employees at offices. Therefore I assume that in 2021 our customers and other market participants will select technologies which guarantee them fast increase in business performance. It is visible also according to answers of participants of a research. Estimate projects and potential changes of processes from robotization heads will be more carefully, relying not only on opinions of employees, but also on researches using intellectual Process Intelligence technologies, – Dmitry Shushkin, the CEO of ABBYY Russia comments .

Despite the increased role of technologies in all business processes, the heterogeneous nature of digitalization of the Russian companies is noticeable. So, more than 32% of respondents announced plans for development of CRM systems, and another 22% – ECM systems. Most of all such respondents were among representatives of small and medium business. The large companies noted as the priority solutions RPA, the solution based on NLP, corporate search and the Process Intelligence platforms.

Notes