Impact what matters.

Predictive IT:Aligning IT with BusinessJoe Alapat & Vincent Tran

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Introduction

Technology: The Great Equalizer

The small to medium-sized business (SMB) market has experienced an explosive level of growth over the last decade — and it largely has technology to thank.

Advances in IT have enabled the SMB to level the playing field across sales, marketing, operations, finance and human resources. The most successful players enter well-established industries and turn the competitive landscape sideways through unique approaches and optimizations of technology.

How have these companies leveraged technology as a springboard to reach business goals, while their more established competitors continue to struggle with similar challenges? They realized that technology is not merely a supplementary but a complementary piece to the puzzle, and is key to the success of the business.

Guiding Questions

• Are you overspending or underspending on IT, and where? • How can you determine if your company is currently leveraging

technology as a springboard? • Can you identify IT decisions that commonly create distraction rather

than focus?

The Challenge

SMBs have an opportunity to develop a culture that embeds IT into the decisions that affect the growth and maturation of the business.

We define this model as Predictive IT.

To create a springboard effect with Predictive IT, businesses must look ahead at the ever-changing technology–business landscape and consistently reassess, maintain or adjust their course in order to optimize its effectiveness.

A practice around Predictive IT helps avoid gut-feeing or reactive decision-making by providing a systematic approach toward maintaining the relationship between IT and the business.

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Building a Predictive Workplace

Great Decision-Making

Great decision-making requires a business to have complete situational awareness.

“The ability to identify, process and comprehend the critical elements of information about what is happening to the team with regards to the mission. More simply, it’s knowing what is going on around you.”

— Situational Awareness, as defined by the U.S. Military

To achieve this level of clarity, technology decision makers must possess a complete understanding of both the internal and external business environments. They also must comprehend how the various components involved (employees, customers, vendors, systems, processes and data) interact with and depend on each other.

The inputs, outputs and timing between these components must be equally understood, as making decisions without this level of clarity results in the misalignment of IT and business. Poor IT decision-making is typical in many organizations and can make goals more difficult, even impossible, to achieve.

How, then, can organizations avoid this trap and instead make well-informed technology decisions?

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The Case for Regular Assessments

Situational awareness is greatly improved by performing consistent and concurrent assessments of business goals as well as their technology counterparts. These assessments should be conducted at least on an annual basis to gauge the health of the alignment between business and IT.

We understand “assessment” is, by all accounts, an overused term in the IT industry and can imply many different levels of analysis. Let’s define the Predictive IT Assessment Process.

The Predictive IT Assessment Process

The Predictive IT assessment process creates a practical approach to determining whether decision makers are supplying the appropriate level of technology focus to the business.

Typical IT assessments focus only on foundational elements: IT Fundamentals, Security, Resilience and Processes. While this type of assessment is essential to Predictive IT, it is only part of a bigger picture. The Predictive IT process analyzes additional facets that provide complete situational awareness: IT Progressiveness, Business Maturity and Business Growth.

This diagram shows how the four major Predictive IT assessment areas are intrinsically paired. There is a correlation between IT Foundation and Business Maturity, as well as between IT Progressiveness and Business Growth.

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Assembling a Team

To conduct a thorough Predictive IT assessment, an organization must first assemble the right team. Team members should have the situational awareness to answer the questions that follow in each of the focus areas.

IT Foundation: Fundamentals, Security, Resilience and Processes

The basic purpose of IT is to create a functional, secure, resilient and structured environment in which to conduct business. The Predictive IT assessment process focuses on the key aspects identified below:

• Do the company’s existing IT assets address the basic requirements for business operations?

• How does the company authorize access to its IT environment? • Does the company have a system used to track IT-related requests,

projects and issues? • What type of network and application security is in place? • How are servers and endpoints protected from malware? • Is redundancy a base requirement for IT services? • Is there a focus on high availability to keep critical services online? • Does the company have a disaster recovery plan (DRP)? • Are documented IT policies and procedures current and in place?

Business Maturity

It should come as no surprise that every business is different, particularly when it comes to maturity, whether reflected in age, size, revenue or industry. The Predictive IT assessment process takes into consideration the following aspects of an organization’s maturity:

• For how many years has the company been in business? • How many current staff members (employees and contractors) does the

company have? • What is the company’s current staff-to-revenue ratio? • Does the company face any requirements that might impact IT? • Does the company belong to an established industry (active for at least

20 years)?

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IT Progressiveness

Failure to keep up with rapid changes to the IT landscape could prove detrimental to a business’ overall success. Different departments have varying needs and move at different speeds. How does an organization produce a consistent and manageable governance process to adopt and deploy IT without going overboard? To maintain the appropriate level of IT Progressiveness, the company must consider the following:

• How old is the current IT infrastructure? • How often is IT hardware and software refreshed? • How are established technologies used? • How are emerging technologies used? • How do employees collaborate with each other? • How consolidated is the business data? • Does the company have established methods for generating an

integrated view of the data?

Business Growth

The observed and expected changes to the business play a significant role in developing a Predictive IT practice. Consequently, a comprehensive IT plan needs to support the key strategic goals that executive management has set for the business. In order to establish an appropriate trajectory for IT, the following areas should be explored to gain perspective on the past, current and future states of the business:

• What was the annual growth in staff and revenue for the last three years?

• What is the planned growth in staff and revenue for the next three years? • Has the company been involved in an acquisition or merger over the last

three years? • Are there any significant industry or business environment changes

impacting the company? • What are the key performance indicators that are being tracked to assess

the business’ performance? • Does the business specialize in any unique, novel or emerging areas

within the industry of focus? • What percentage of the company’s revenue is spent on marketing?

Assessment Scoring

The full assessment process provides a mechanism to generate a score for the four key areas based on the answers provided. The scores can then be mapped.

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Mapping the Results

The assessment scores allow for a way to visualize the alignment between IT and business. This is done by mapping each focus area on a standard x–y axis.

IT Foundation (x-axis) and IT Progressiveness (y-axis) identify the level at which IT is operating, while Business Maturity (x-axis) and Business Growth (y-axis) identify at what level the business is seeking to compete.

With the technology–business relationship visualized, the final step is to then craft a Roadmap that positions IT with greater alignment to the company’s business goals.

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Conclusion

The process described in this paper highlights how SMBs can utilize a Predictive IT model as a springboard to reach business goals. This unique approach to IT assessments focuses on aligning technology with business goals.

We described the necessity for situational awareness and a willingness to enact changes through consistent review and refinement. Though SMBs may have limited resources, they have the advantage of greater visibility into the business, and a greater agility to realign their technology, than more established players.

By answering questions within a Predictive IT assessment, we can map the business growth and maturity of an SMB against the current state of its IT. This is the basis for a more comprehensive IT Roadmap and a trajectory that drives business goals.

Over time, this practice will help build a decision-making process that embeds IT within overall business strategy to achieve success.