IT strategy challenges of a growing business
Progress brings challenges
Business processes rely on huge volumes of diverse data: communication with customers and business partners, financial records, employee details, internal documents, customers’ purchasing behavior and more. The more your business grows, the harder it is to ensure that corporate IT solutions work together and their functionality is sufficient to cover internal IT needs.
New locations
Spreading to new locations is a sound intention of any ambitious business. Today, globalization makes it much easier than it was decades ago. Yet, geographical expansion entails the necessity to revise and change a company’s internal operations, including those related to IT. New offices must be integrated with the corporate network. IT support is likely to become 24/7 if it's not yet.
New products and services
Diversifying products and services is a serious step forward. Still, it inevitably drives the need to revise your IT strategy. For example, a company will need to modify internal databases, update the channels for customer interaction (add functionality to customer websites and apps) and resort to new effective IT tools for marketing and online sales, as well as diversify the methods for collecting information about customer tastes and preferences.
Mergers and acquisitions
Enterprises often buy other companies to enter a new market, get competitive advantages or broaden the range of products and services. Growing companies also merge to join forces. But joining organizations often use different IT solutions, which must be integrated and tuned to fit new common business objectives.
IT leaders’ stumbling blocks
When you know about potential difficulties connected to business growth, it may seem that IT strategy development is quite simple: a company outlines the goals for business development and implements appropriate IT solutions to support these goals. However, the real situation is more complicated due to a number of circumstances.
Lack of time to prepare for the changes
A strategy is developed in advance to achieve certain objectives. However, a growing business uncorks surprises at every step, and business leaders often have to modify their goals and priorities on the fly. The same is expected from IT leadership: they should react promptly and adapt to changes quickly. A serious hurdle: winning decisions are not always on the surface, and it takes time to get them and develop into digestible ideas.
Uncertainty
Potential and real changes always lead to a certain level of uncertainty (or, better to say, an uncertain level of uncertainty). You cannot predict how exactly new products will behave on the market, how the customer will react to them, and what your competitors will do. You can hardly avoid at least some degree of chaos. The purpose here is to identify it and minimize its influence on business processes if possible.
Resistance to change
An IT strategy for a growing business should be a bit ahead of the times. It supports the current state of affairs and at the same time allows IT leaders to look into the future to some degree. But it may be difficult for IT teams in non-IT industries to follow latest tendencies. Some leaders (both business and IT) are even eager to focus on current operations and get really stuck to their IT strategies.
There is some sense in this approach: why should I change anything if it works as is? Why invest additional effort and money in unpredictable things? This approach might work with a little luck. But following it, companies ignore the options of development and run the risk of floundering an outdated IT agenda. Growth and changes can be painful, but nothing is more painful than staying stuck to the agenda that doesn’t work anymore or gives you only a half of possible benefits and, to some extent, retains business growth.
Key areas for IT leaders
The role of IT leadership is to help the organization maximize its competitive advantage with an effective IT strategy that supports or even creates that advantage.
Focus on strong sides
A good strategy is based on your business strengths and those aspects where you can get the most benefits. Therefore, it is crucial to understand the strong sides of your business and give them additional digital support (instead of improving weaknesses).
Find new opportunities and threats
As your business grows, you are likely to uncover new opportunities. At the same time, it’s important to be aware of the potential risks that come with new activities and take necessary steps to protect your business.
Enterprises are getting overloaded with data from various sources: customer service points, operational & transactional systems, media and more. A growing company can employ big data analytics to get meaningful insights from these data: to monitor market tendencies, understand competitor strategies, identify early signs of potential problems and reduce risks.
You may get new valuable ideas with IT consulting services. Of course, you cannot completely rely on the opinion of IT consultants as they don’t know the full picture of your business. However, they can share their experience and prompt to find priceless solutions to your corporate pains.
Reduce entropy
In a fast-growing business, decisions may throw the company in different directions. Many ad hoc decisions are taken, many ideas appear to be not so profitable as it was expected and remain unsupported. All that leaves IT components in a chaotic state and reduces their effectiveness.
IT infrastructure never becomes organized without intervention. Entropy management aims at small corrections to keep IT components on track rather than letting things run on their own until there is a much larger breakdown or problem. Enterprise architecture should possess a certain degree of flexibility to be ready for the changes when they are needed.
Align IT and business
A good IT strategy is developed to support a business strategy. This approach assumes that business goals are stated before it comes to serious IT planning. However, in a growing enterprise, top management is likely to modify business goals to jump at new opportunities or abandon unproductive approaches.
When a business scales up, it’s important to be sure that the IT solutions keep up with business goals and modify the IT strategy if there are any discrepancies. Otherwise, there is a risk that IT leaves behind the business, and IT and business strategies become misaligned. It makes an IT roadmap less effective (if not harmful).
Be flexible in choosing vendors
A growing business may be interested in new IT solutions to effectively cover the increasing volume of internal operations (if legacy systems don’t cope with the task), provide digital support for new internal processes, enable better and faster services and more. Even if a company develops in-house or has an established chain of tried-and-true IT vendors, it can benefit a lot from new IT partnerships. The focus should be on selecting reliable software providers and minimizing the risks of new cooperation.
Collaboration with existing vendors may also change a lot when they offer new cooperation options, start doing more on their side or get integrated into the design process.
It’s important to evaluate what various vendors can offer and choose the best matches in terms of quality, time and costs of delivery.
On the final note
When your business scales up, the IT strategy that worked before may become less effective. In such a context, an IT strategy should possess a certain level of flexibility to answer new business challenges: to spread to new locations, to diversify products and services, to buy other companies or join forces with business partners.
In this respect, IT leaders need to understand business objectives and translate them into technical solutions. It’s a daunting task, especially when IT leaders have little time to consider available options and evaluate potential risks, but, depending on your approach, this challenge can become either a full-grown problem or an opportunity for company management to develop business. Don’t leave opportunities unattended and threats – underestimated.