Step 4: Strategy

“Bake” IT initiatives into strategy oversight

Directors should ensure IT considerations are integrated into the board’s ongoing review of the company’s strategy. The more critical IT is to the company, the deeper the board should probe the company's plans for using technology to facilitate execution of an effective strategy. Often leveraging emerging platforms can contribute to an effective strategy. Directors at companies that consider IT critical are three times more likely to believe their IT strategy “very much” aligns with company strategy than directors at companies that consider IT to be more of a commodity.

Do you believe the company's approach to managing IT strategy and risk contributes and is aligned with setting overall strategy?

  IT is critical IT is very important IT is somewhat important IT is a commodity
Very much 65% 38% 11% 21%
Moderately 25% 43% 57% 29%
Needs improvement 9% 17% 19% 17%
Not at all 0% 1% 8% 21%
Don’t know 1% 1% 5% 12%

As IT becomes increasingly embedded in overall company strategy, it is more important to understand how current and emerging technologies work across the various functions within the company. Boards should discuss with management how people throughout the company are working together to understand new IT developments. This can include employees in business development, marketing, sales, public relations, and human resources. Directors should also inquire whether management has adopted an enterprisewide approach that considers the holistic needs of the entire company when making strategic IT decisions. This can help prevent a silo approach to IT strategy, which could end up being more costly and less effective.

It is important for directors to understand the company’s key technology priorities--for the short- and long-terms. Management’s approach to making these determinations can provide perspective to boards. Examples of tools commonly used are:

  • return on investment analyses,
  • scenario modeling,
  • analysis of strengths, weaknesses, opportunities, and threats associated with specific technologies,
  • competitive analyses, and
  • research and analyses of the timing of emerging technologies yet to hit the market.

Thinking about IT as a tool for innovation can help directors close the “IT confidence gap.” Effective use of IT usually occurs if it is planned in advance with a concerted effort and focus and a well-executed plan. Considering IT as part of the company’s overall strategy also better allows the board to recognize the potential benefits of newer technologies, such as mobile computing and social media, and the impact they could have on the company’s bottom line.