The I.T. “Strategy”
Google states that the definition of strategy is:
a plan of action or policy designed to achieve a major or overall aim.
What I can tell you from almost 20 years of experience in I.T. is that very few businesses have an I.T. strategy, much less a strategy on how I.T. will enable the business…
Try and think of one industry today where I.T. isn’t a critical component. Farming? Nope. Pizza Delivery? Nope. Landscaping? Nope. Everything in our world today is controlled by technology, “software is eating the world”.
Many of the CIO’s I work with today are REALLY struggling to align the actions that I.T. preforms with what the business needs to differentiate in the market place. Today the common notion is that I.T. spends about 80% of their time handling severity one outages, and only 20% of their time on projects that align to business differentiation. I’ve certainly seen this first hand when I was early in my career, almost all my time as an administrator was spent putting out outages and restoring services. Somehow firefighting and heroic efforts have become a badge of honor in I.T. teams instead of moving the business forward. How did we get this way? That answer is beyond me, but we’re finally seeing enterprise organizations starting to wake up.
I have as a client the largest land scaping company in the U.S. as one of my customers. The CIO came to the company about three years ago, and the I.T. team was plagued with service outages and performance issues. We worked with him to rapidly get this under control and we were very successful. Recently they changed their name and had a successful IPO, but what is his next move? They are rapidly acquiring other players in the market, and their I.T. staff will be bursting at the seams managing technology. How will they differentiate in the market place?
How does I.T. move from being a necessary evil to enabling their customers to work faster? Let’s look at this situation critically. In our case my client services landscaping companies not individual home owners like Lowes or Home Depot. If you know even a little bit about small businesses you know time and cash flow is critical for them.
If you’re the number one land scaping supply company how do you address these problems for your customers? Here’s some ideas to consider:
- We’ll refer to my client as Joe’s Landscaping Supply (JLS)
- We’ll refer to their client as Tom’s Landscaping Company (TLC)
- The end user is Mary and Bob (the home owner getting work done)
Joes Landscaping Supply could allow Tom’s Landscaping Company to create a bill of materials and send the bill directly to Mary and Bob. Mary and Bob then have a line of credit with Joe’s Landscaping Supply which frees up Tom’s Landscaping’s Company’s cash flow. Joe’s Landscaping Supply of course shows Mary and Bob the list price for their materials; Tom’s Landscaping Company however gets a discounted rate and collects that as margin on the sale, and gets paid out directly from Joe’s Landscaping Supply.
Joe’s Landscaping Supply in addition could provide Tom’s Landscaping Company a calendar to plan all their work. This would of course integrate into the delivery system of Joe’s Landscaping Supply. Tom simply sends his crew to the work site and the delivery is made the morning that work begins. No more running back and forth because someone forgot to buy a part.
As Tom’s company increases business with Joe’s Landscaping Supply his discount off list increases which allows him to make more money while keeping his overhead low. In addition, Joe’s Landscaping Supply can start keeping track of things like saw blades and other perishable goods. Based on the work that Tom’s Landscaping Company has booked through the system, they can be reminded to buy items as they are due for replacement.
This is an I.T. strategy that enables the business growth not simply keeping the lights on. It’s important for organizations to understand how I.T. can help them compete in the market place. It takes a special CIO to envision these sorts of services for their customers, but this will determine what companies survive in the digital economy and those who are displaced. Is your I.T. leadership providing strategy to guide the business?