It is not a new notion that a strategic approach to IT impacts overall business performance. This school of thought has existed for many years.
Leading information technology research and advisory company, Gartner, has long been advising CIOs to be more strategically involved in their business and to drive value through IT. Unfortunately, this advice has, for the most part, not been heeded – particularly in the small and medium business sectors.
As a result, the business-IT divide persists, where business is kept separate from IT and IT focuses largely on the technology, resulting in too little strategic engagement between the two groups.
Space Age Technologies, an IT company with 19 years experience in the industry, have long been cultivating this line of thinking and have developed a framework termed “Relevant IT” in order to aid companies in bridging the pervasive gap between business and IT.
Executive director of Space Age, Chris Welham, believes that businesses that identify if, or how big, a gap exists between business and IT compared to others in the same industry, will gain very useful competitive knowledge.
“It is only once a business recognises where they stand in this regard that they can start to formulate a ‘roadmap’ towards a place where the business is able to drive value strategically through IT,” he says.
In order to measure how progressive a company is in the strategic use of IT, the Relevant IT Maturity Assessment was created. This assessment evaluates a company’s use of IT across six different capabilities, which represent the key strategies that must be embraced by the business and, like any business strategy, require full buy-in from all business leaders, as well as the person who leads IT.
As the business advances within each Relevant IT Capability, the divide between business and IT will close, until at the most advanced stages, IT and business work closely together to differentiate, and even transform, the business.
To date, the assessment model has provided some interesting early insights into the way that businesses approach IT in various industries – which industries seek to extract more business value from IT, and which see simply IT as a necessary expense and not much more.
In the IT industry, the Maturity Assessment has recorded a wide spread of approaches to IT, with some companies being significantly more advanced than others on their Relevant IT journey. In most of the IT companies assessed, the business leaders hold the belief that IT can add significant value to the business, but on the ground, few follow through with this.
In the agricultural industry, companies for the most part, see IT as no more than simply the provider of a cost-effective and stable platform. However, from the data collected thus far, one company stands out from the crowd in their forward-thinking and strategic adoption of IT. This same company is also generally more innovative and financially better off than most of the others surveyed in this industry.
Amongst the smaller companies in the retail industry, there is a generally low strategic adoption of IT. One larger firm with a more corporate structure differs. Here the level of strategic engagement between business and IT is higher across the capabilities, with IT adding measurable value to the business. Again, this is also the better performing business of the companies surveyed from the industry.
Similarly, in the manufacturing industry most companies surveyed have a fairly low strategic adoption of IT. However, there are a few standout companies that have assigned larger budgets to get more out of IT, and it shows in their growth.
In the financial services, accounting and legal sectors, the companies surveyed, , like those from the agricultural industry, use IT to simply provide a stable platform in the most cost-effective manner. The one or two companies with higher Relevant IT maturity scores have business leaders who expect more from IT, have well-defined roles for the IT function and have implemented solid planning and budgeting processes.
Somewhat surprisingly, the hospitality, leisure and tourism companies fair worst under the scrutiny of the Relevant IT Maturity Assessment. In these industries there are very low scores in all capabilities, across the board.
There seems to be a general lack of enthusiasm for IT in this industry. Most IT purchases are made with the lowest cost being the deciding factor, and little drive to adopt IT strategically to advance or differentiate the business.
Space Age Technologies will shortly be making their Relevant IT assessment available to the public at no cost, allowing businesses to benchmark their company within their industry.
Welham comments: “Registering and assessing a company will provide South African businesses with valuable feedback that they can take away and implement themselves, if they are keen to bridge the business-IT divide and improve the strategic value the business extracts from its investments in IT.”
He does warn that it certainly will not be a “quick fix”. It’s a long journey, bridging the gap between business and IT, but the rewards are most definitely worth the time and effort – both industry-specific and across South African businesses in general.