Let the Business Drive IT Strategy

"Those who are skilled at executing a strategy," Sun Tzu wrote, "bend the strategies of others without conflict." This fundamental principle helps to explain why some CIOs are now having more success than others at executing strategy. The IT department that once held a monopoly over its company's IT is gone, and with it the control-based, IT-centric strategy conceived for the mainframe era. Changes in the business environment have rendered such strategies un-executable.

With the advent of Web 2.0 and the bizarrely named "shadow IT," CIOs know that their span of control over IT decisions is more limited by the day. Instead, the executives, managers, staff and customers at their companies all have their own "de facto" strategies for exploiting IT. Faced with this challenge, CIOs are exploring their options, which include abandoning the idea of an IT strategy, sticking with the old way (but often only on paper) or forging a new generation of IT exploitation strategies. Wrapped up in this decision is the ultimate destiny of the CIO role itself, which in some companies is becoming marginalized as a quasi-supplier of technology services and in others is disappearing altogether.

Technology and Business Strategy

The CIO's strategic challenge now is to capture and channel the energy of individuals' personal strategies for exploiting IT. Backed by a corporate purpose to maximize total value, innovate, constrain overall cost and mitigate risk, effective CIOs must focus on, as Tzu might say, "bending" some of these personal strategies toward a better conclusion or — in the case of individuals who are pursuing goals not aligned with the company strategy — into a dead end. Many personal strategies can simply be encouraged, or strategically ignored.

Why IT Strategy Is No More

Two critical inflection points have directed us to where we are today. The first was the switch from dumb-terminal to client-server computing that started 20-odd years ago and went global with the Internet. The second was the business executive's response to Y2K and the dotcom boom. Business people stopped believing the IT hype and techno-speak, suspecting that investments were being driven more by suppliers' strategies rather than their own. They took control of the IT agenda at the big-picture level and focused on two things they understand very well — cost, and business innovation.

These two inflections put IT decision-making in the hands of non-technologists at both operational and strategic levels. Yet formal strategies for IT have largely remained the province of IT departments and vendors. Few non-IT executives and managers have defined their strategies for investing in and exploiting IT; such strategies are, therefore, de facto. CIOs can make a tactical choice to either let these de facto strategies be, to rely on an orthodox IT strategy or to take the initiative and lead a business-defined strategy for exploiting technology.

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