SMEs (small and medium-size businesses) rely to a great extent on their IT systems to enhance operational efficiency. As such, it is only natural that company management should play a critical role in a company’s IT planning process. However, the complexity of modern business IT solutions can be daunting, especially for those without specialised training in the subject. Because of this, some SMEs leave the planning of their IT strategy to IT personnel who, whilst they may be very knowledgeable in the field, are unlikely to understand the company’s overall business objectives and operating environment as well as the people running it.
This guide focuses on the role best-suited for company managers to play in designing, implementing and monitoring a firm’s IT strategy on an ongoing basis. It looks at the reasons why it is important for management to play a significant role in certain aspects of the system, and also discusses how best to work collaboratively with IT personnel and experts. Finally, it covers some strategic goals that management can set to get the most out of the company’s IT system.
Why management needs to be involved in strategic decisions relating to IT
Essentially, your company’s IT system is a tool. If used effectively, it is a tool that can help virtually every aspect of your business function more efficiently. But like any tool, your company’s IT infrastructure must be used properly to provide the maximum utility. To accomplish this, a variety of decisions must be made, many of which require insight into your company’s overall business objectives and strategy. As a result, there are a number of reasons why management should be involved in devising a company’s IT strategy, including:
IT personnel may not have an overall vision for using the system: To return to the tool analogy, consider the case of a master carpenter using a wrench to pound nails into a roof. The job might get done eventually, but it would certainly not be accomplished in an efficient manner. The problem in such a case would not be that the wrench was broken or unusable, simply that it was being used for the wrong function. The same principle holds true when it comes to IT. It’s not enough just to acquire the right IT solutions – they must also be right for the task for which they will be employed.
The IT personnel you hire, whether in-house employees or third party consultants, can tell you how to use the IT assets you have, but they may not understand your business well enough to know exactly what these assets should be used for or how they should be used. In other words, they may lack an overall vision as to exactly what it is your company needs its IT system to do.
As a result, if your company’s management doesn’t actively participate in the strategic planning process for the company’s IT system, the chances of squandering resources on solutions that aren’t a good match for the company’s business increase dramatically. The likelihood that your system will deliver suboptimal performance also increases markedly.
Costs can spiral out of control without management guidance: In our experience, one of the most significant dangers of management inattention when it comes to the IT planning and implementation process is the potential for costs to spiral out of control. A well-conceived and properly implemented system can repay its costs many times over, however, if IT assets are purchased without serious thought as to how they fit into the company’s overall strategy, it can lead to what is called equipment or solution “bloat.” This occurs when one solution doesn’t quite do the job, leading to the purchase of another solution and so on and so forth. IT costs can mount up quickly using this type of approach, which is often caused by a lack of participation from company management in helping design and then closely monitoring the performance of the firm’s IT system.
A system can meet the firm’s immediate needs but be poorly adapted for scalability or long-term growth: Modern IT systems and services offer a great deal of built-in flexibility and scalability, but this characteristic is by no means infinite. Business solutions often require expensive provisioning, so frequent adjustments can become expensive. Additionally, as your company grows, a solution that worked on a smaller scale may no longer be effective as processing demands increase. Moving to a new system can involve expensive data migration or re-entry, not to mention the cost of potential downtime during the process.
IT personnel should not be expected to by themselves accurately project a company’s growth or future computing needs. This function requires the insight of a company’s management – who are best-suited to estimate the future trajectory of a company’s business. With this information, your IT personnel or third party service provider can help you decide on an IT strategy that incorporates considerations relating to scalability as the company’s IT needs change over time.
How management can work collaboratively with IT personnel and experts
Focus on specifying clearly identifiable goals and benchmarks for the company’s IT system: When it comes to managing a firm, experts often speak about recognising the value of intangibles. These can include the firm’s reputation in the market place, or the esprit du corp of the company’s employees. As important as such intangibles can be, when it comes to working with IT experts to get the most out of your system, tangibility is the way to go. The more specific you can be about exactly what you would like your IT system to do, the more likely it is that that such personnel will be able to select the best IT assets for the job and provision them to function optimally.
One way to communicate the goals you want the company’s IT system to attain is through the use of benchmarks. Benchmarks constitute an important method for informing your IT staff of the most important achievement criteria for IT system design. Your benchmarks should focus on areas such as:
- Reporting capability
- Security measures (Anti-virus software, firewall, etc.)
- Marketing integration and enhancement
- Communication functionality (email, VOIP, etc.)
- Data storage capacity
- Business continuity
Clearly communicate cost parameters for achieving these goals: As mentioned above, one risk associated with lack of management input into the IT planning and design process is that costs can get out of control. Even if management is overseeing the planning process, it is still important to provide your IT staff with clear cost parameters for the acquisition and operation of IT assets. IT costs can mount rapidly without budgetary guidelines that provide guidance to the employees tasked with assembling and operating your IT infrastructure.
Avoid “system bloat”: System bloat, as alluded to earlier, is often a sign of a poorly designed system. It typically refers to a system which has acquired a variety of nonessential features, solutions, and equipment. It is more likely to occur when management takes an arm’s length distance approach to IT system design. Without insight into the complete set of desired IT system functions, it can be difficult to build an IT system efficiently. By providing an overall picture of current and anticipated system requirements, management can help avoid “system bloat” and the added expense and potential degradation of system performance it can entail.
Strategic IT goals to aim for
From the foregoing, it seems clear that a company’s managers should play an important part in the strategic planning process for the company’s IT system. As business conditions are subject to change, they should also help monitor its performance over time and evaluate when and if changes to the system should be made. In doing so, some of the strategic goals they may want to aim for include:
Planning sessions: To monitor and optimise the company’s IT system, management should establish a series of regularly scheduled meetings to review and plan ahead for the company’s technology needs. The frequency of such reviews should be commensurate with the size and complexity of the firm’s IT infrastructure. A review should be conducted at least yearly and more often if necessary to adequately evaluate IT system performance and future needs. You may want to consider bringing in outside assistance to ensure that your technology review is as thorough as possible. This process should identify any recurring issues and takes steps to ameliorate them as soon as is feasible.
Set system performance metrics: These metrics answer the question of what exactly should your system be able to accomplish. Some metrics that can be used include:
- System processing time
- Record retention and access times
- Security data including number of security breaches, if any, as well as any other security incidents
Return on investment (ROI) analysis: Whilst it is not necessarily easy to determine exact dollar-in, dollar-out figures related to your IT system, management should make an attempt to quantify the benefits received for the money spent. This type of analysis is especially helpful when considering the purchase of new IT assets or services
IT security: Identify the most important data to protect and discuss with your IT team how this can best be done. Doing so often involves the following actions:
- Limit access to vital information as needed
- Establish IT security procedures for company staff to follow
- Perform penetration and other security tests on a regular basis to evaluate any potential vulnerabilities
Business continuity: The importance of modern IT systems to businesses has grown as technology has improved its functionality. The downside of this phenomenon is that IT outages can be much more devastating than they were previously. In addition to the potential damage from lost sales or business opportunities an outage can cause, there is also the reputational damage such incidents can inflict on a company when consumers are unable to access its website or company personnel and services.
Data backup can help with one aspect of this issue, by ensuring that you can restore valuable files that might be lost during an outage or security breach. However, data backup services can’t restore your system to full operation by themselves. Thus, companies are increasingly looking to procure business continuity solutions which allow them to restore their IT services as quickly as possible in the event of an outage. These solutions can make a copy of your company’s operating environment so it can be brought online right away whilst your main system is being reset or repaired.
Training: The best IT system in the world won’t function at its full potential if a company’s staff is not adequately trained to operate it. Your strategic goals should include a training plan which encompasses both the initial employee training process and regular training reviews to make sure your staff is up-to-date with any new features or policies relating to the operation of your system.
The vital function modern IT systems serve makes it abundantly clear that company management should play a significant role in making decisions relating to a firm’s design and implementation of IT assets. This includes setting up regular planning and review sessions to ensure that the company’s system is performing within acceptable parameters. Company management should also work closely with the firm’s IT staff or third party experts to make sure that they understand the company’s vision for its IT system. Taking these steps should enable the company to optimise the results it receives from its IT assets.