Most organisations have a business strategy agreed at the highest level. This usually includes sub-strategies in areas like marketing, sales, R&D and investment. Far fewer have a comprehensive technology strategy that goes beyond a “keeping the lights on” approach.
CIOs can advance their company, and themselves, by developing long term strategies built around using technology to drive the business forward. Drawing on the courses we teach at The Open University, I will outline here how you might go about doing so.
Technology planning for strategic position:
The first thing to consider is the relationships between technology and competitive position – where you can get an edge over your competitors. Doing so usually means either creating something of greater value or offering something comparable at lower cost.
Technology has a huge amount to add in both of these cases. It is essential to developing innovative products and services which could win new customers or launch you into new markets. Meanwhile, increased efficiency through technology can reduce the cost of delivering your offer.
What is technology innovation?
Any business with long term growth plans will have a focus on innovation. Technology always plays a role, but can often play a much more strategic one.
Technology innovation means a number of things. Firstly, if your product is technical then the technology strategist should be involved in examining how it can be improved to stay ahead of the game or adapted for new markets.
Secondly, you may be looking at innovating to improve your offer. For example the legal and banking industries – known for their conservatism - are seeing established players challenged by new entrants with innovative delivery methods which harness modern communications, data analytics, and even wearables to offer a smoother, cheaper and more personalised experience.
Finally, it may be about enabling the R&D process through technology. Companies developing pharmaceuticals or vehicles, for example, can benefit from technologies that support innovation such as bespoke modelling software and high performance computing.
Taking an entrepreneurial approach:
The actions above can frequently involve processes of discovery and exploitation. Risk is inherent and it will inevitably include some failures as you experiment with different ideas. The job of the company, via its technology strategists, is to create an environment and culture which encourages innovation that fits the business whilst creating a safe place to fail.
One of the first things to bear in mind are ‘systems of innovation’ - the contextual factors that promote and enable innovation. Where does your company sit competitively? What is your unique selling point? What resources and skills do you have? Who are your customers and potential customers? What are your competitors doing? And more broadly, what systems are relevant to your organisation? How do these systems interact with each other? What do you - or could you - gain from them?
You must also consider the wider world – what changes are taking place that you can take advantage of or that might cause problems. A good example is ‘sustainability’, where government action, market advantage and altruistic motives are all major drivers of business and consumers. This presents both opportunities and challenges.
Once you have considered opportunities and threats, you need to create time and space to experiment with different technological approaches to achieving your overall goal. You should also look at different approaches to innovation - open innovation for example allows you to bring in more parties – internally and externally - and benefit from their experience and perspective, but must be carefully managed to ensure intellectual property is kept safe.
Managing all this requires setting up the systems to support this process. For example, you will need to set up and communicate shared guiding principles, dedicated physical and online collaboration spaces, and regular reporting processes to assess progress.
The other side of your technology strategy relates to improving efficiency – and thereby reducing the costs of delivering your product or service.
This is the more traditional preserve of IT and the opportunities to improve efficiency through better technology are well documented – from supporting mobile working to integrating CRM and personnel software. What is less common is a strategic approach to implementing these technologies.
This involves looking at technology in the context of your organisations goals. Look at each step in your company and examine where inefficiencies lie. Look at the core operational processes- how people work, how customers engage, how suppliers are managed, how finance is handled – and see where there is room to improve efficiency within or between these processes.
Working with your team, make sure you appreciate the range of the available technologies and where you have capabilities to modify and integrate them, and match those to your overall business goals, not just your immediate needs.
Planning for implementation:
All of this needs to be considered as part of an overall technology strategy. Start with your company goals and evaluate where technology can make an impact. Develop a technology road map which considers how technologies can make a difference to your organisation – evaluating both existing technologies you can bring in, and technologies you could develop or adapt in-house.
This must also consider the realities of implementing the strategy. The culture of an organisation has profound effects on what strategic options it considers, what will be regarded as acceptable and the extent to which implementation is likely to be successful. Power and politics – internally and externally - impact the successful application of technology, and must be considered.
Your strategy also involves engaging with an uncertain future. You need to think about the nature and direction of technological innovation, and well as other external trends, as we head further into the twenty-first century.
Technology managers need to make complex decisions around identifying and evaluating technologies, developing new or improved products and processes, integrating these with other business processes, and managing change required by technological innovation and implementation. Systematic planning and analysis are therefore vital parts of any strategy formulation.
About the author
Ivan Horrocks is Qualification Director for Technology Management (TM) at The Open University. The TM programme is aimed at helping technology professionals and their organisations advance by using technology strategically to deliver innovation and drive the business forward.
Open University CIO David Matthewman features in the 2015 CIO 100 of 100 transformational business leaders.