It’s Time To Revisit Your IT Strategy

As the economy rebounds strongly from the 2008-2009 recession, IT leaders are feeling new stresses to squeeze more value out of their companies’ IT budgets while performing the role of primary business enabler and catalyst for growth. A new set of IT technologies, such as social media, cloud computing, virtualization, mobile computing and analytics, provide ample opportunities for increased efficiency. Many studies have shown that companies that wisely invest in IT increase revenues much faster than those that invest unwisely, too little or not at all. Likewise, companies that view their IT organization as a business partner outperform those that view IT as a service provider or merely a cost center. Now, when there is much potential for growth and an abundance of new technologies, it is time to revisit IT strategies in expenditures, infrastructure, security and trends.

Assess IT Expenditure
First, find out your IT expenditure as a percentage of your revenue. In the wholesale industry, the average spent on IT as a percentage of revenue is 1.5 percent. If your IT spend is significantly lower than the industry average, it means that you may have some opportunities that can help improve your business performance. If your IT spend is higher, you may want to understand why. Another scorecard is the spending ratio of infrastructure vs. growth, where growth is the expenses used to process transformation and IT innovations. Some high-growth companies set a three-year IT strategy to meet a target ratio from 85/15 to 60/40. Find your IT ratio by investigating the makeup of your infrastructure, IT skills and other opportunities for transformation and innovation.

Pay Attention to the Basics
Reliable IT infrastructure is the foundation for all other IT operations. If your system uptime is not 99.99 percent, your company is losing productivity and quality of service for your customers. Also, if you have had any data loss in the past six months, whether it was caused by hardware failure or virus, your company is not as competitive.

IT innovation strategies that increase reliability of IT infrastructure as well as lower total cost of ownership (TCO) are transformations through virtualization, private or public cloud computing. For example, virtualization is a farm of hosting environments, where each farm can normally host up to 20 different applications at once. Those 20 servers are consolidated into one, and IT applications can be ported from one host to another easily. That translates into IT efficiency, quick time-to-market, faster recovery, lower TCO from hardware, software, power consumption, cooling and much greater scalability for business growth.

Beware of Security and Compliance
Security issues affect business continuity and undermine business performance and customer confidence. A culture of security is built with three steps:

1. Start a security audit and form a risk committee to monitor and improve security operations.

2. Identify operations and secure Information Property (IP).

3. Establish situational countermeasures, which should include the compliance of Plastic Card Information (PCI) and Health Insurance Portability and Accountability Act (HIPAA).

Some IT shops use hard drive encryption to secure sensitive data like pricing and customer information. You can apply the same tactic if those issues become critical to your organizations.

Knowing IT Trends
Facebook, Twitter and LinkedIn are everyday communication tools for the new work force. Should you stop the use of social media? Can you stop your employees from using them at work? Some studies reveal that if a company is not ready for 100 percent transparency, then the company is not ready to embrace social media as a work tool.

First, construct new policies around technologies, such as smartphones, iPads, laptops and PCs. No one device can replace all other devices, because the use of each device depends on the needs of the situation. For example, a smartphone is handy for emails during meetings, but the iPad is great for presentations or video demos. Knowing business needs and the benefits of each type of technology is crucial to the development of new policies.

Virtualization technology essentially is changing the standard of data center operation. The technology yields better IT efficiency, flexibility, portability and reliability and consumes less power for the data center, which translates into lower operating costs and better green effects. Cloud computing is also slowly changing IT services into commodities. Most companies engage cloud computing with caution. Some storage cloud data stream one way, while others stream both ways. Some software as a service (SaaS) are more mature than others. You may subscribe to the software for a monthly fee for services like HR or sales force automation. Make sure you read the details of the service level agreement (SLA), when you go with the platform as a service (PaaS) or infrastructure as a service (IaaS) to host your applications.

Where Opportunities Lie
Use your IT organization as one of your critical business partners. Invite your IT department to participate in your strategic planning. It is always good to refine your business objectives with IT strategy to be better aligned with business results. The process can be complex, but it will not be difficult if you stay focused on your balance of business objectives and IT growth. Be sure to know your IT measurements, identify how your IT organization can provide greater value to business, understand new IT capabilities for emerging opportunities, develop the right IT strategy and, lastly, realign IT strength with business strategy for growth.

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Vict Ying Meet the Author
Vict Ying is director of information services at Hypertherm, Inc., located in Hanover, New Hampshire, and www.hypertherm.com.