Let me start by saying the intent of this post is not to bash anyone. I have nothing against IT guys/gals. They are very good at what they do, and have the best intentions. Rather, this post is to expose a large issue that plagues many small businesses. So with that being said, let’s dive in.
Almost every IT person I have met is intelligent, hardworking, and provides great value to the organization they work for. They are used to wearing many different technical hats, and tend to jump head first into anything to do with technology. The problem is that they are not good at saying no to executives when they really need to, especially when the conversation is related to technology. To make it worse, executives tend hear “technology” or “IT” and immediately tune the conversation out and say “talk to my IT guy/gal”. Unfortunately, this approach to technology decisions is downright dangerous. And in some industries it can be disastrous. If you are one of the many executives that hear “IT” and automatically think “don’t want to be bothered”, you are making a common mistake we see way to often in small businesses. You are relying on your IT person to be your CIO, when they most assuredly do not have the experience or training to be one.
The focus of Executives and the IT team are different.
Obviously there are major difference in the responsibilities of the executive team vs. everyone else in the company. Fundamentally, executives measure their success through Profit & Loss statements. When the business is making money; everything is good. The business can expand, invest in innovation, acquire additional resources, even engage in culture building activities like parties and freebies for the office. When the business is losing money on the other hand, it’s time to shore up expenses and potentially make some serious changes. Executives spend anywhere from 40%-80% of their time on strategic initiatives, and they are very well equipped to make strategic level decisions. They are forward facing and take into consideration the future landscape of the business, the industry they’re in, and the agility or their competition.
Now let’s look at the traditional IT guy/gal. Their measure of success is primarily based on implementing new technology and keeping IT up and running. All of the decisions they make are at an execution level, aimed at better managing and maintaining the IT systems. And because 80%-90% of their daily activities are tactical, their decisions are tactical. It is very rare for an IT person to make strategic decisions for the business. And getting them into this mindset is a long process that requires a lot of support from the executives. If you have an IT person that participates in the strategic planning sessions of your business, you are very fortunate. But for most small business without CIO’s, the IT person does not play this role.
So what’s the big deal?
Simply put, the big deal is that the landscape of IT has changed. New tools are redefining how businesses interact with technology. They are enabling new products, new delivery methods, and even new business models. Cloud-based software and IT solutions are becoming more and more commonplace, and it is forcing the evolution of traditional IT. And the transition is not being driven by the IT person, it is being driven by forward thinking executive teams.
The IT departments of the past created value for companies by creating efficiency via file sharing, email systems, collaboration tools, CRM systems, and ERP systems. These tools helped make businesses more agile and efficient; so companies hired IT teams to keep the systems up and running. The vast majority of IT budgets were spent on the resources necessary to manage and maintain these systems. The problem is that these tools are no longer good enough. They no longer provide any differentiation, cost savings, agility, or competitiveness for businesses, because almost every business has them. Yet businesses are still allocating the majority of their budgets to running the traditional IT systems. Which leaves almost nothing left in the budget to capitalize on new methodologies and technologies that are creating the competitive advantages of today.
On the other hand, some businesses have taken over technology decisions and are making the necessary moves to drive down the costs associated with management and maintenance tasks, and increase the budget allocated to strategic technology based initiatives. These businesses are creating the new IT structure that will make them more competitive now, and in the future. This is how technology is being controlled today, and it is the primary reasons that IT decisions must be made by the executives in charge of the company’s strategic objectives.
So where should the responsibility lie?
High level technology decisions should be made by the President or CEO, with help from the other key executives; the CIO, CSO, COO and CFO. Technology planning today is strategic, not tactical. It directly effects a company’s ability to scale efficiently, it helps to create larger profit margins, and it helps to create enhanced customer experiences. When executives push these decisions down to the IT person, they are doing a disservice to the company, and the individual forced in that position.
The applications a company uses, how they use them, and what services are kept internal vs. outsourced, are all strategic decisions. It is the executives job to analyze the options, and make the right choices to help the company become competitive. Once the decisions are made, the IT person’s role it to execute.
For Presidents and CEO’s, this can seem daunting. Especially if you are one of the many that don’t feel technology is one of your strong suits. Just remember to focus on what is best for the business. And keep in mind, technology is not magic, if it doesn’t make sense, it’s probably not a good solution. Evaluate technology decisions in the same way you would any other decision. You should be able to answer questions like, how is this good for the business, what is the ROI, what are the risks, do we have the resources to pull this off, etc. If you need help asking or answering the questions, look for consultants that focus on high level technology strategy, but make sure the resources you are using to help are able to make good strategic decisions for the business.
And finally, remember that businesses integrating technology conversations into their strategic planning sessions are becoming much more agile and flexible. They are able to create structures that scale while also increasing profit margins. Don’t make the mistake of avoiding these conversations. The IT of the past is gone, and the IT of the future is quickly becoming the executive team’s best friend.