In today's digital age, it’s imperative for manufacturers to have an IT strategy to remain competitive. An IT strategy outlines how a company can leverage technology to attain its objectives. It helps manufacturers to select the appropriate technologies, make informed investment decisions, and create technology-driven strategies to gain a competitive advantage.
Furthermore, an IT strategy enables manufacturers to enhance efficiency and productivity by utilizing existing assets and creating new ones. It helps keep them attuned to the evolving business environment, allowing them to be more competitive in their industries. An effective IT strategy ensures efficient utilization of resources and improves operations. Let's explore the essential IT strategy components and implementation process.
What Is an IT Strategy?
Consider IT strategy a roadmap for how to use technology to meet business goals. It sets out both a destination and a way of getting there.
An IT strategy addresses maximizing the utilization of existing investments and identifies where adopting new technologies can help the business compete more aggressively. It also details factors that affect the organization's investment in and use of technology, such as budget constraints and IT department capabilities.
The Importance of Having an IT Strategy
As digital tools and platforms continue to impact our day-to-day lives, customer expectations evolve. These days, customers expect companies to be more efficient and responsive and to provide better services. Keeping up with these rising expectations is a challenge for businesses, but it is also an opportunity to differentiate themselves and stand out in the market.
An effective IT strategy can direct the use of technology to streamline manufacturing processes, increase productivity, and enhance customer service. In summary, it ensures a business has the IT support it needs to remain successful.
Another reason having an IT strategy is important is sufficient data security. This benefit is essential for manufacturers who must comply with the strict guidelines mandated by some OEMs, defense contractors, and government entities.
Elements of an IT Strategy
An effective IT strategy goes beyond just hardware and software. It encompasses all aspects of technology management, including:
- Cost management
- Risk mitigation
- Vendor selection
- Hardware and software procurement
- Human resource management
An IT strategy explores the gap between where your business is now in terms of IT capabilities and where you want it to be, and sets out a way to bridge the gap.
Crafting an IT strategy can be daunting; however, the benefits of having a well-defined IT strategy are immense. A comprehensive IT strategy can help a business align its IT capabilities with its overall goals and objectives, enhance operational efficiency, reduce costs, and improve customer satisfaction.
To create an effective IT strategy, businesses should consider adopting best practices grounded in industry standards and proven methodologies. These best practices provide a framework for developing a customized IT strategy that meets the unique needs of a business.
Best Practices for Building an IT Strategy
No two businesses are the same — each needs an IT strategy tailored to its circumstances. However, experience shows there are some common best practices all businesses can follow when developing their strategies:
- Identify and engage with the principal stakeholders so they know what’s happening, including understanding what the senior leadership expects from the process. They will need support for future project funding and successful implementation.
- Understand the plan for the business over the next 3 - 5 years
- Examine various solutions
- Design an instructional framework
- Analyze and revise
- Assess weaknesses in current IT infrastructure
- Be mindful of longer-term goals
- Establish a budget
- Craft an actionable IT strategy that supports the goals of the organization
- Avoid using IT jargon
- Ensure the implementation plan reflects current realities and constraints
7 Steps for Creating an IT Strategy
1. Assemble a Team Drawn from Multiple Departments or Functions
To create a comprehensive IT strategy, assemble a team drawn from multiple departments or functions. Including representatives from departments such as finance, operations, marketing, and customer service will provide a well-rounded understanding of the organization's needs and will facilitate collaboration. A broad set of perspectives ensures all aspects of your business and operational needs get considered and increases the likelihood of successful implementation of the IT strategy.
2. Document the Current State of IT in the Business
When developing an IT strategy, it's essential to document your business's current state of technology. So, first, assess your industry's existing technology. Then, define how you want your processes to work in the future.
A short internal review may suffice if you anticipate minimal changes, such as adopting cloud systems. However, organizations may need a more comprehensive evaluation if they face new competition or enter new markets. When reviewing the current state, consider the hardware and software tools used and the existing capabilities and level of tech enablement. Evaluate how technology gets managed, the skills and talent available, and the overall level of process maturity. Pay special attention to security processes and potential weaknesses or threats.
While looking at external trends, ask yourself:
- What emerging technologies show promise beyond the initial hype cycle? For example, artificial intelligence or Additive Manufacturing.
- What technology investments do competitors appear to be making? For example, online ordering.
- How are vendor products evolving? Could new Product Lifecycle Management tools accelerate product development? Are there better tools for analyzing sales data?
- What resources are available and where? This may influence location and sourcing strategies.
Capturing the desired state is something for a more considerable, longer-term IT strategy development effort rather than a short-term refresh. When engaged in this part of the process, push the team for innovative ideas and discourage negative thinking and cynicism.
3. Conduct Analyses
In this step, all of the information gathered is analyzed to determine what the organization’s IT needs are and what the future IT landscape should look like.
Key points are:
- Understand the future business strategy. An IT strategy should help the business meet its goals and objectives. Consider what the product/service portfolio will look like going forward. Look at how the business will operate and develop a model of IT operations.
- Review the current strategic IT plan, if it exists.
- Assess how the organization will meet milestones, benchmarks, and KPIs.
- Conduct a gap analysis between the current and the future state.
- Come up with several ways to bridge the current-future state gap. Technical feasibility and constraints, including funding, are all part of this.
4. Develop the IT Strategy Blueprint (Preferably for a Five-Year Timescale)
This gets done by senior IT leaders or consultants working with business-side counterparts on the preferred options emerging from the analysis. Two important points to incorporate are:
- The resulting strategy must allow flexibility because things will change, and the unexpected will occur.
- Limit initiatives for the IT function to around 4-7 items (too many initiatives can be overwhelming and result in a lack of focus).
5. Analyze the Proposed IT Initiatives and Prioritize Based on Value, Cost, & Complexity
When analyzing proposed IT initiatives, it is crucial to ensure they align with your strategic objectives. Selected initiatives should impact each objective and contribute to measurable outcomes. Organizations should prioritize initiatives based on their value, cost, and complexity, considering the potential benefits and returns on investment and the effort and resources required for implementation.
6. Develop an Implementation Roadmap and Secure Buy-In from Stakeholders
Developing an effective IT strategy requires careful planning and considering stakeholders' needs. It should include an implementation roadmap that details how the company will move from concept to execution and secure buy-in from stakeholders who need to be on board for changes in technology investments.
7. Monitor, Measure, Revise
Measurement provides accountability and transparency. Plan the following IT strategy review as an annual refresh or a rolling 3-year plan; and make any necessary changes.
How CMTC Helps SMMs With Their IT Strategies
CMTC offers technical support and IT management services to help small and medium-sized manufacturers (SMMs) develop their IT strategies. They can assist with selecting new tools and systems, support implementation, and manage changes to existing systems. With CMTC's help, SMMs can improve their IT capabilities and better manage their technical needs, allowing them to focus on growing and expanding their business.
Advantages of working with CMTC include:
- Quality results at an affordable price
- A single source of local IT and manufacturing consulting services
Reach out today to find out what CMTC can do for your organization!
About the Author
Pandora Ovanessian is a technology executive with over 22 years of experience as a CIO at various start-ups, mid-size organizations, and multi-billion dollar global operations. Beginning her career at Ernst & Young, Pandora has diversified expertise in strategic planning, tactical execution, product development, and ERP selections/implementations. She has extensive experience in selecting relevant innovative technologies, leading the technology lifecycle, and establishing cost-effective secure infrastructures.