As discussed in our previous IT Budgeting blog there are several reasons why the budget planning process can be a difficult one with which to contend. Last time we talked about legacy systems and pace of change, two issues guaranteed to cause a headache for the Head of IT. The thing is, with an effective and coherent IT Strategy in place, both shouldn’t even rear their ugly heads.
Strategy is all about using the tools and knowledge at your disposal to plot an efficient and competitive path through whichever discipline in which you are working. IT Strategy therefore, rests on three fundamentals:
- Knowledge of the business
- An understanding of where the business is planning to go over the next three or so years
- Industry knowledge of the technical application of IT relevant to your organisations’ field
It is unusual to find an IT Director running a business or organisation. That means the operational decisions and strategic direction rest with someone else, typically an MD or CEO. However, the more effective IT Directors we have seen also have a very good understanding of the company, it’s processes, it’s purpose and it’s vision. This might seem a far cry from the skill set you may think you want your Head of IT to have but the days of a technical person who cannot articulate and converse in non-technical language with fellow senior team members are long gone. Technical understanding overlaid with emotional intelligence and sympathy for non-technical colleagues is the new ideal.
Knowing where the business is planning to go over the new few years is also vital. If there is to be an acquisition completed in the next two years this needs to be catered for in the IT Strategy. Acquisitions almost always lead to data migration projects and often application migrations too. These projects can take years depending on the complexity, scale and resource available. Imagine if you were 12 months away from the go live of a system aswell….? Appropriate resource can take months to source and IT Budgeting in advance will prove critical.
Finally, you have to keep up to date on the changes that are taking place in Information Technology and how they can relate or impact on the field in which operate. A SWOT analysis session every six months coupled with an awareness of change in the industry can help with this. Thought leaders, social media and trade publications are also ideal resources to help.
At this stage, you can start to determine your IT strategy and it’s goals. Is your IT support in-house? Should it be outsourced? Has your software strategy historically been to build not buy? Is this still appropriate given the proliferation of software applications now available? Are you up-to-date with your version control on critical applications? The reason most often cited for changing to alternative enterprise-grade applications is inconsistency in maintaining major version upgrades, leading to user dysfunction, functionality deprivation and loss of support.
Next time we will look at process and funding options when IT Budgeting…