Does IT have a strategic stake in business?

Ephraim Schwartz talks to two IT industry figures who disagree

Inspired by the first presidential debate where McCain and Obama disagreed whether the military surge in Iraq was a strategy or a tactic, I spoke to two technologists whose opinions I respect to find out what is strategic and what is tactical when it comes to IT. Mathew Porta, vice president and partner for global technology strategy at IBM Global Services, and Josh Greenbaum, principal at Enterprise Applications Consulting, were kind enough to shed light on the differences. As far as Porta is concerned, the idea that an enterprise can develop its business strategy without IT and then expect IT to execute it is just too simplistic these days. "For many industries, technology informs the art of the possible," Porta tells me. The possible being in this case your vision or goal for your company. Greenbaum, however, disagrees. In fact, he goes so far as to call Porta's strategic view of IT "idealistic". Greenbaum takes a far more tactical approach, explaining that companies do indeed decide on their business goals first and then figure out how IT should go about maximising those goals. "It's not a question of, 'Can we take that hill?' We have to take the hill," Greenbaum says. "We don't have a choice." According to Greenbaum, taking the hill is the strategy, and it is IT's job to figure out how to do it. That's where tactics come in. In contrast, Porta believes that IT must be used to help a company figure out what its vision should be in the first place. Whether a company wants to be a media company or a service company, for example, IT must be part of that decision-making process. In other words, do we have a realistic strategy? Once informed by IT, there needs to be a roadmap of how to get there, with tactics filling in the steps along the way. Greenbaum, however, says this is not how business works. As he sees it, General Motors says: "We are going to be a surviving auto manufacturer. It is not IT's job — or the CIO's job, practically speaking — to say, No, you can't do that". This is the fundamental difference between the two points of view. And while I'm not sure there is one right answer, I have a gut feeling that, in the case of GM, for example, it might have to be the CIO who delivers the bad news. "You know what, we're not going to be one of the surviving auto manufacturers," the CIO might say, adding, "Maybe we ought to sell before anyone realises it." Porta sees the CIO in that kind of role — a business leader rather than an IT manager; a value creator rather than a cost controller; an innovator rather than an operator. Greenbaum understands the differences. "IBM would love to have the voice of the CIO weighed more carefully at the decision-making point, but that is not the reality," he says. More typically, the CIO is called into the boardroom when things go south and the he has to explain why. Greenbaum concedes that for certain businesses, IT functionality is part of the competitive differentiator. At, say, Netflix, Amazon, or Google, IT is most certainly part of the strategy-making process. At most organisations, however, this is not the case. "In the CPG [consumer packaged goods] industry or luxury goods, it is brand, not technology, that is the competitive advantage," Greenbaum says. "It is defined by your PR and marketing activities." However, IT can make suggestions that help execute a company's strategy. If the strategy is to open your company to new markets overseas, for example, but your sales force in a particular underdeveloped country doesn't have laptops to use, it is IT's job to say, "We can help the sales force do what it needs to do over cellphones." If IT wasn't asked to be part of the vision-making process, the company might have had to change its strategy. I think that's what Porta means by technology informing the vision. On this they agree: Strategy or tactic, IT is there to maximise business goals.

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Tags managementstrategicTacticalgreenbaumporta

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