How and why IT must be strategically positioned

 

As consultants, we have the privilege of repeatedly examining new IT organisations. Although much has changed over the years, the obvious is sometimes overlooked or taken for granted in IT management. One example of this is the strategic positioning of IT within the company. This is not an abstract goal, however, but crucial to ensuring the long-term success of digital transformation.

If the role of IT is not clearly defined, it can hinder digital and technological progress. Without proper positioning, innovation slows down and the ability to respond to market changes in a targeted manner becomes limited. This includes not only smooth and efficient IT operations, but also developing new business models and maintaining the company's competitiveness. That is why we ask our clients the crucial question:

Is your IT organisation correctly positioned and appropriately mandated within the company?

Unfortunately, based on our experience of discussions and projects, this question often goes unanswered. In practice, many initiatives are launched with the aim of optimising IT, reduce costs or drive digital transformation. However, in many cases, the role of IT does not align with any overarching goal. In our study 'High-Performance IT 2025' for example, we found that 41.4 per cent of respondents had difficulty deriving strategic IT KPIs from corporate goals. While nearly two-thirds of participants had set strategic IT goals, only 44.4 per cent measured whether these were being achieved.

 

The relevance of strategic IT positioning

Many strategic considerations fail to take into account the most effective way to integrate IT into the company to achieve maximum impact. An inadequately defined or weakly anchored IT function can lead to a lack of authority, misunderstandings, and dissatisfaction. This affects not only the IT department itself, but also leads to conflicts with stakeholders and robs the entire organisation of its ability to act flexibly and efficiently. Whether for historical reasons or due to a lack of mandate, IT then operates in isolation from the business and becomes heavily involved in operational tasks.

Without a clear strategic position or representation in relevant management committees, IT lacks the necessary influence to drive important decisions on technologies and digital transformation. Resources and initiatives cannot be planned or allocated adequately. Consequently, IT is often seen as a reactive department that primarily maintains existing IT operations rather than developing innovative solutions for the business.

Our observations show that 86 per cent of business stakeholders and and 59 per cent of IT managers predominantly assess the role and positioning of IT as 'reactive' (with a focus on operational excellence in terms of stable, secure and cost-efficient systems operation, the development of IT services, and the implementation of IT projects). Looking to the future, they would like to see a shift towards an 'active' orientation (with a focus on the qualification of requirements, possibly in conjunction with the business) and, ultimately, a 'proactive' orientation (with a focus on the generation of ideas for direct business development). As many as 89 per cent of respondents from business units and 65 per cent from IT expect an active role, while 11 and 29 per cent respectively would like to see IT in a proactive role.

The desired value contribution of IT

The greater the discrepancy between aspiration and reality, the more complex the transformation effort will be. Transitioning from a reactive to an active, or even proactive, IT organisation often necessitates significant changes to existing structures. Analysing the current situation and expectations of the IT department is essential for successful alignment. This requires open communication about the needs of IT stakeholders. However, it is common for mutual assessments and expectations to differ significantly.

To create clarity and ensure close coordination, both sides must determine the desired value contribution of IT, and thus its role in the company. Should IT evolve from its reactive operational service provider role to become an active advisory partner for the business, or even proactively contribute to the company's value creation? Only then can the necessary positioning measures be identified. Depending on the outcome, the specific change requirements can be operationalised.

How can IT and the business sector be successfully aligned?

As with other areas, effective communication and transparency are essential for success. The desired positioning and role of IT determine how closely it needs to collaborate with the business. However, without the necessary foundations, such as structured IT–business alignment, demand management and associated governance, none of these scenarios will work. Organisations do not have to reinvent the wheel to achieve this; proven templates, structures and best practices from the market can help initiate the necessary changes without overlooking critical gaps or overshooting the mark.

If you have any questions about IT strategy, please send me a quick message.