As economic conditions improve, Forrester estimates that global technology spending will accelerate to $4.7 trillion this year. This increased spending raises expectations for technology leaders to drive their firm’s growth agenda. Unfortunately, IT strategies disconnected from business strategies often hinder the positive impact that IT teams can have on business success. The key to maximizing the impact of your technology investments is to align tech and business strategies.
A high-performance IT strategy gives technology leaders a simple framework to shape investment budgets to continuously improve business results through technology. This framework is built around four IT styles that align with the dominant needs of a business initiative, group or the enterprise itself. The four IT styles are:
Each IT style offers guidance to help you shape your investment budgets. The four styles also tie directly to business results to:
A high-performance IT strategy helps technology leaders determine and deliver the appropriate mix of IT capabilities required to achieve business outcomes. Build your high-performance IT strategy on a foundation of three execution principles: strong alignment, deep trust and high adaptivity.
The more IT understands and is aligned with specific business teams and initiatives, the easier it is to deliver what the business needs in that moment. That means aligning within IT, aligning with business teams, and aligning both of those with the needs of end customers.
Executives at firms with high levels of alignment across functions such as marketing, customer experience and digital report 2.4 times higher revenue growth and two times higher growth in profitability than those with some or no alignment. And those same high-performance companies are 1.6 times more likely to have IT organizations that are highly aligned to the business, according to data from Forrester.
Building trust through security, privacy and resilience is a core principle of high-performance IT; and it engenders trust in the CIO and in IT throughout the business. Trust matters because it drives revenue and customer loyalty.
For example, customers who trust their bank are likely to use additional products and services three times as often as those who don’t trust their bank, according to Forrester. Their employees are more likely to be productive and effective, and their partners are more likely to facilitate faster routes to market. In the public sector, citizens are more likely to support policies and expert advice from an agency they trust.
Business change is built on technology, and both must be highly tuned to the changing needs of customers and the market. Adaptivity enables businesses to rapidly move technology, capital and people to respond to market changes. Adaptivity builds resilience and fuels innovation.
According to our data, respondents at the most adaptive organizations reported, on average, two times greater year-over-year growth than other respondents. High-performance IT favors the distinctive behaviors of an adaptive organization, such as the use of predictive analytics and flexible technologies, tuned to the specific needs of the organization.
Understanding these execution principles will help you identify where you are already strong and where you need to make changes to your IT organization or operating model to deliver what’s needed. With this understanding framed through the lens of IT styles, you have the foundations in place.
To organize your thinking and get started, ask yourself three questions:
With a more detailed understanding of your organization’s needs, current capabilities, gaps and readiness, you’ll be able to prioritize your technology spend, learn where you can pull back and determine how best to deliver the IT capabilities that your business needs to succeed.
This article was written by Ted Schadler, vice president and principal analyst at Forrester. As a member of Forrester’s technology executive research team, Ted’s research and guidance expertise focus on helping leaders maximize the value from partners, high-performance IT and the CIO’s role in growth, commerce, and the impact of generative AI on IT and businesses. Coauthor of the books “The Mobile Mind Shift: Engineer Your Business to Win in the Mobile Moment” (Groundswell Press) and “Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business” (Harvard Business Review Press), Ted has a master’s degree in management from the MIT Sloan School of Management, an MS in computer science from the University of Maryland, and a BA with honors in physics from Swarthmore College.
