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Businesses need a strategy to ensure adequate returns on their Information Technology (IT) investments. All businesses make IT investments. Large corporations develop applications to coordinate activities and share information amongst their worldwide offices. Small businesses invest in computer systems for accounting, record keeping and billing. Today, every company has a web site to advertise their offerings and get closer to their customers.
Like all other purchases made by a business, technology decisions should be based on a return on the investment. A solid IT strategy, aligned with business objectives, should guide the day-to-day activities and deliver major returns on technology investments. Technology investments should be made with a view towards their incorporation with the overall strategy of the business. Although they may appear to save money in the short term, decisions made without an IT strategy to guide them will prove inadequate when the total cost of ownership is realized.
A technical strategy should not be a Herculean effort, spanning months and costing thousands. A proper IT strategy should start with the business goals and provide a three year road map of how and where technology can deliver the greatest benefit and payoff. Once established, this new strategy becomes the point of reference for technology investments, project selection and day-to-day consistency in decision making.
Unfortunately, most small and mid-sized businesses are usually too busy focusing on day-to-day tasks and the overall strategy never gets addressed. This makes for reactive, expensive decisions without foresight or strategic planning. These businesses need to identify how to deliver value and focus on leveraging their core competencies. They need to create the right relationships with the right vendors and service providers, for the right reasons.
Selecting a technology solely on the basis of price can lead to disappointing results. These decisions can often lead to inadequate investments which do not meet the business’s needs and cost more in the long run. Technology investments should be made with one or more of the following goals: reducing expenses, mitigating risk or adding value to a product or service. A best-in-class investment is one that reduces the initial cost, reduces the long-term cost of ownership and furthers the organization’s long-term strategy.
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