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How to develop a technology strategy

Implementing a technology strategy can be difficult for any CIO, but following this step-by-step guide enables them to build one that delivers on an organization's needs.

CIOs are familiar with the question: "What's our technology strategy?"

Sometimes the point of the question is general and relates to developing a technology strategy overall, but more often it's specific to a particular hot-button technology area: "What's our cloud strategy? What's our DevOps strategy? What's our IoT strategy?"

Regardless of whether it's general or specific, it sounds like a perfectly reasonable request, not one that should make a CIO's heart sink. But very often it has that effect and for a couple of reasons.

The catch is there's a lot packed into that seemingly simple question. Specifically, "What is our strategy for technology X?" usually means:

  • What are we doing about this technology?
  • When are we doing it?
  • Why are we doing it?
  • How much will it cost?
  • What products and vendors will it involve?
  • What tangible benefits will it deliver to our organization and how will we know we've experienced them?
  • What changes will it require to our staffing and training?
  • What did we forget to ask but should probably know?

Those aren't simple questions to answer, and in many organizations they're highly political, asked by individuals with not-so-hidden agendas.

Navigating this minefield can be a challenge, so for many CIOs, "What's our strategy?" can feel like the first volley of a sustained attack.

But it doesn't have to.

How to develop a technology strategy the right way can depoliticize the process. Proceeding from first principles -- and engaging the right individuals at the right time in the process -- can minimize the political overhead and maximize the chance that the strategy delivers the right answers to the questions above.

Step 1: Proceed from general to specific

It's often tempting to respond to immediate pressures by developing a strategy for a specific technology ahead of developing an overall technology strategy. However, CIOs should resist the temptation.

One of the key elements of any strategy is the concept of proceeding from general to specific. That is, specific technology strategies should depend on the overall technology strategy -- specifically, the technology principles defined and articulated in the overall strategy.

Start by developing a technology strategy overall, and only after that's complete -- with the necessary buy-in -- should CIOs proceed to technology-specific strategies.

Foundational elements of developing a technology strategy
This graphic shows the four technology-specific strategies CIOs should use once they've created the overall, general technology strategy.

Step 2: Articulate the business drivers

CIOs and their teams should document the organization's key business drivers. Depending on the organization's size and focus -- for-profit or not-for-profit -- they can capture these drivers by talking with other senior leaders and the board or reviewing official documents such as financial statements.

Surprisingly, this is the step that is most often skipped by CIOs and other IT leaders because they think the business principles are so obvious they don't need to be called out.

However, it's crucial for CIOs to articulate the business drivers because technology principles depend on them. The magic lies in articulating at the right level of granularity, which usually involves digging into the business strategy.

For instance, a for-profit organization's business drivers might be, at the highest level, "Make money and increase value to shareholders." But the specific business strategy might continue "by expanding globally via acquisition." That affects the technology strategy significantly because it informs the IT leaders that they need to focus on effectively integrating acquisitions and selecting technologies that function globally, not just in a particular geography.

Other business drivers might include:

  • improving profitability by reducing costs;
  • driving revenue by engaging new kinds of customers;
  • focusing on core competencies by divesting adjacent areas;
  • increasing revenue by improving employee productivity; and
  • improving agility by automating business processes.

The key factor here is that the words after "by" typically inform and drive the technology principles. For example, "… by reducing costs" would require the CIO to implement technologies that demonstrably reduce total cost of ownership

Once CIOs and their teams have articulated the business drivers, it's important to confirm buy-in from the rest of the business leaders. Again, this seems like an obvious step, but it's an important one when it comes to articulating the logic behind technology choices and successfully developing a technology strategy.

Step 3: Select the technology principles

Once they have documented -- and other senior executives have signed off on -- the business drivers, the technology team can begin articulating the technology principles that enable those specific business drivers.

For example, a business driver of "improving agility" naturally lends itself to a technology such as the cloud, which has the documented benefit of improving agility. Thus, "cloud-first development" might be a technology principle that aligns with that business driver.

Some key points in selecting technology principles include:

Enabling the business drivers articulated in the previous step. There doesn't have to be a one-to-one ratio, but each technology principle needs to enable at least one business driver or it shouldn't make the cut.

Being as specific as possible. "Move to the cloud" is a possible business driver, but "cloud-first development" is crisper, as it implies that new development efforts should take place on the cloud. "Centralize where possible, distribute where necessary" is another example -- as is the converse.

Being technology independent. "Cloud-first development" works, but "AWS-first development" does not. Why?

It's possible to justify the move to the cloud by pointing to the ways in which cloud enables agility -- it's premature to select a particular platform -- whether AWS or any other cloud vendor -- without tying that decision back to specific selection criteria, which happens downstream in the strategy development.

Encompassing all strategic technologies. If a technology isn't encompassed within one of the principles, it's not on the list and isn't something a CIO plans to invest in. This is important to understand -- if there are technologies that don't fit within the technology principles, either rethink the principles and make sure they tie back to business drivers or drop the technology from the list. The answer to "Why aren't we doing X?" then becomes, "It doesn't align with our business drivers," which is language the business leaders can understand and appreciate.

Both the business drivers and technology principles should each fit on a single slide -- a CIO may opt to include individual points explaining each technology principle, depending on the intended audience.

Step 4: Flesh out the strategy, architecture and roadmap

By the time a CIO embarks on this stage, they have the answers to the questions, "What do we plan to do?" and "Why are we doing it?" The goal at this point is to make the technology principles complete by developing an architecture that shows how the selected technologies fit together and flesh out some of the details of the strategy, such as downstream implication. For instance, if the goal is to migrate to the cloud, "Developing a cloud Center of Excellence" might be a logical next step.

It's also key to develop a roadmap, which answers the question "When are we doing it?" that includes key milestones such as development of selection criteria for vendor and product selection and conducting the selection exercise itself.

The strategy, architecture and roadmap may require deeper levels of detail than the business driver and technology principles, depending on the level of detail the executive and technology teams require. Also, if there are technology-specific strategies, such as a cloud, DevOps or IoT strategy, they can be fleshed out at this point.

Step 5: Decide on specific vendors and products

It's absolutely critical that vendors and product selection happens at the conclusion of developing a technology strategy, not before.

Decisions about specific vendor tools should be the result of the CIO's assessment, which should include specific selection criteria. Those selection criteria are essentially refinements of the architecture and technology principles. For example, if a technology principle is "cloud-first," a key criterion should be "offering must be cloud-based."

This short-circuits much of the political debate that often clouds technology decision-making.

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