Definition

IT strategy (information technology strategy)

This definition is part of our Essential Guide: Information technology priorities: A guide to TechTarget's annual survey

IT strategy (information technology strategy) is a comprehensive plan that outlines how technology should be used to meet IT and business goals. An IT strategy, also called a technology strategy or IT/technology strategic plan, is a written document that details the multiple factors that affect the organization's investment in and use of technology.

It should cover all facets of technology management, including cost management, human capital management, hardware and software management, vendor management and risk management.

Executing an IT strategy requires strong IT leadership; the chief information officer (CIO) and chief technology officer (CTO) need to work closely with business, budget and legal departments as well as with other lines of business and user groups to achieve its success.

Organizations formalize their IT strategy in a written document or balanced scorecard strategy map. The plan and its documentation should be flexible enough to change in response to new organizational circumstances, market and industry conditions, business priorities and objectives, budgetary constraints, available skill sets and core competencies, technology advances, and user needs.

Basics of an IT strategy

A strong IT strategy provides a blueprint of how technology supports and shapes the organization's overall business strategy. Its strategic goals should mirror business projects (aka business alignment) and take into account the needs of key stakeholders including employees, customers and business partners.

The strategy should offer a look at the organization's current technology posture and provide an idea of where IT should head over the next three to five years.

There are different models that help executives construct an IT strategy, yet most contain certain key elements including:

  • A high-level overview of the IT department that covers its mission, core values, objectives and approaches to accomplishing its goals.
  • Current budgets and spending forecasts for a multiyear timeline.
  • An outline of current and future IT projects and initiatives with timelines and milestones.
  • A catalog of existing enterprise architecture; IT department capabilities and capacities; and future needs and requirements with details about infrastructure, staffing and other necessary resources.
  • An analysis of IT's strengths and weaknesses.
  • A list of the internal and external forces (such as market and industry trends) that shape current technology requirements and innovations as well as the future forces expected to shape IT.
  • A prediction of the potential opportunities and vulnerabilities that will necessitate technology responses to best position the organization for success.
Plan for IT strategy
An IT strategy plan for CIOs

Although the IT strategy by its very nature needs to address complex technology details, it should not be considered a technical document, but rather a business document. As such, it should be written in clear, concise language that's free of technical jargon.

Why every company needs one

An IT strategy has become a critical element for organizational leadership in recent decades. Its growing importance mirrors the rise of technology itself as a critical element for business success. The importance of an IT strategy has been amplified over the past few years as organizations focus on digital transformation and thriving in the digital age. Technology is essential for creating new business models, products and services; enhancing customer service as well as customer experiences; increasing sales; enabling workers and improving productivity; and supporting interactions with vendors and other business partners.

As such, organizations must formulate a technology strategy to accomplish those things as well as compete against others with the same objectives.

Some organizations, particularly platform companies and other businesses whose entire product is based on technology offerings, may decide to forgo a separate IT strategy. Instead, these organizations may (and, in some cases, already are) fold IT strategies into the overall business strategy to create a single unified document.

How to create an IT strategy

Just as there are varying models for the document itself, there are multiple ways to approach the creation of an IT strategy. Still, commonalities exist, such as an initial review of the organization's existing strategic IT plan and related documents.

A CEO explains the two-speed approach to IT strategy.

This step should be followed by an assessment of how the organization is meeting established objectives, milestones, benchmarks and relevant key performance indicators. This assessment should identify the technology currently in use and the gaps that exist between these current IT operations and the objectives and strategic goals outlined in the ongoing strategic plans.

Senior IT leaders then need to collaborate with their business-side counterparts to further develop the IT strategy. They should also seek out other resources, such as research reports, to understand the business and technology trends that will impact their organization's market.

All this creates the groundwork for IT executives to develop short-term and long-term objectives, budget projections, technology predictions and the perceived future opportunities and vulnerabilities that go into the technology strategy along with the corresponding summaries needed for the final document.

Implementation

A strong IT strategy relies not just on creating the plan, but also on proper implementation of it. After all, these documents don't do any good if they're ignored after completion.

They should be used to guide tactical technology decisions, thereby helping the IT department align its day-to-day operations with the overall business model and mission.

However, adherence to the IT strategy should not be overly rigid. The fast pace of technology advancements and innovation require organizations to be agile if they want to seize upon new, and sometimes unforeseen, developments that can help them be more competitive or better serve their market.

Thus, the technology strategy needs to be flexible. CIOs, CTOs and other executives must also be nimble, and they should expect to reassess and redevelop the technology strategy at least annually and possibly revisit it even more frequently to, first, verify the tactical plans align with the technology strategy and, second, verify the technology strategy remains aligned with the overall organizational mission as it changes in response to shifting dynamics.

This was last updated in November 2017

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