Revenue protection: the new direction in IT
How much money is being left on the table due to a lack of integration of IT with a firm’s business strategy?
Ilona Romanenko (left) is senior manager and Emily Antonico is a member of Baker Newman Noyes’ Risk and Business Advisory Practice.
Overall, businesses pay close attention to their information technology infrastructure and its security. But because there is still a misguided view that IT is its own business unit, overall IT strategy is often neglected in favor of more tactical, day-to-day tasks.
In fact, only the most successful organizations embrace IT as an integral function of each business unit within an operation. When utilized correctly, IT can serve as a subset of the business that propels the organization forward.
Leaders of all organizations demand that IT departments “keep the lights on,” with maintenance plans and staffing decisions adequate to avoid business interruption and to ensure the day-to-day function and maintenance of IT systems. Specifically, this speaks to keeping the internal network, critical applications and supporting infrastructure up and running.
But firms have become more sophisticated and are paying more attention to security, due at least in part to the fact that security breaches are expensive. Logistically, large monetary amounts are often spent to recover control of data, and even larger investments are made to regain reputation and customer confidence.
But how much money is being left on the table due to a lack of integration of IT with the business strategy of an organization?
In the outdated “keep the lights on” approach, IT security is seen as a way to control expenses. In the correct approach, an IT strategy that is comprehensive in nature does more than just control expenses, it protects revenue.
Organizations need to focus on business functions and IT collectively, as opposed to seeing these as two separate entities.
Designing your plan
Going forward, organizations’ governance structures, from the board to the C-suite to the director of operations, need to provide leadership for organizations to flesh out, adopt and execute a full IT strategy. Here are some best practices:
• In organizations where leadership establishes an IT steering committee, provides that committee with autonomy and holds it accountable for strategic results, the goals and initiatives within IT are more likely to align with the goals and objectives of the organization. This is the best way to allow the IT initiatives to support the overall direction of the organization.
• Maintain infrastructure so to avoid any interruption of business, ensure the proper use and storage of sensitive data and uphold customer confidence and integrity in the marketplace.
• Be mindful of recent regulatory changes and keep systems in compliance. This includes HIPAA for health care, PCI for credit card processors and Sarbanes-Oxley for public companies.
• Any comprehensive IT strategy must align with an organization’s business strategy. Become intimately familiar with your company’s goals, ensure that they are clearly articulated and create buy-in for achieving those goals.
• The business strategy defines the desired results, but does not necessarily articulate how to achieve those results, thus leaving a large opening that business strategy might fail. This is where IT strategy comes into play, proactively articulating how a firm is going to utilize its business strategy. Create a roadmap that navigates between applications, infrastructure, organization and governance, and which leads to the desired destination.
At the best companies, “keeping the lights on” is addressed along with other business functions and high-level outcomes, collectively within one strategic approach. Thus, the lights stay on by default – with the added benefit of enhanced revenues and greater confidence among stakeholders.
When IT strategy is not only aligned with a company’s overall goals, but is also helping the company to meet those goals, CEOs and other business leaders will sleep better at night, and will have the luxury of a broader view of their company’s position within the marketplace. Then, and only then, will companies be prepared to proactively position for and capitalize on opportunities as they present themselves.
Ilona Romanenko is senior manager and Emily Antonico is a member of Baker Newman Noyes’ Risk and Business Advisory Practice.