Information Technology Strategy in SMEs: A Brief Essay

Strategy is the creation of ‘fit’ among a company’s activities.

— Michael E. Porter. Harvard Business Review, Nov/Dec 1996, Volume 74, Issue 6, Page 61.

The purpose of an Information Technology (IT) strategy is to ensure alignment between the business plan/company vision and the company’s IT assets. These assets include, but are not limited to; software and hardware systems, networking infrastructure, data capture devices, telephony and telecommunications equipment, plus the concepts of support, training, systems development, business and systems analysis and project management.

Small/medium sized enterprises present a unique challenge when it comes to resourcing IT. In a typical small/medium sized enterprise (SME), the focus of the company towards its organisation of technology should be on manageability, maintainability, and the elimination of complexity. The implementation of an IT strategy should be managed through a set of inter-related programmes and projects, which will inevitably evolve over time. No matter how projects evolve the strategy is intended to set a direction for a two year period, after which it should be re-evaluated in its entirety and new objectives set. A two year interval provides a good time-base in which to complete substantial improvement projects in any of the asset areas highlighted above, and to achieve objectives set out in wider business plans and strategy reviews.

The strategic objectives should be fundamental to achieving the SME’s vision during the time period. They are, in part, aligned to overall company priorities, but also reflect specific technological and staff developmental objectives which will need to be achieved to underpin company progress. In practice, IT objectives can be said to fall into one of the following three categories:

  1. Long-term; aspirational objectives, involving substantial technology and system rollouts, and the introduction of new processes and working practices,
  2. Medium-term; technical solutions involving the introduction/development of new technologies,
  3. Short-term; adjustments of existing services to fit with users’ changing operational requirements.

The main objective is the continued development of systems to enable effective business processes – this means providing integrated systems to meet business requirements at all levels. Integration must support multiple business processes spanning multiple operational domains and levels (e.g. product development, sales, purchasing, finance, human resources, operations, etc). Further to this, supplementary objectives include:

  • To achieve a reduction in the variety of technologies in use,
  • To achieve a reduction in the number of core systems and applications providing similar functions,
  • To devise an effective system for ensuring that new and emerging technologies are evaluated,
  • To devise an effective system to ensure monitoring and review of technical infrastructure and services, including the monitoring and review of the overarching strategies.

Ultimately, the consolidated and integrated systems will yield an increased volume of data from which reports can be generated. The priority is to harness this data through the development of company-wide management information facilities, providing convenient access to data from multiple sources to enable consistent reporting, analysis and decision making, commonly referred to as Business Intelligence (BI). This is likely to evolve from the adoption of an overall reporting strategy, applied initially to priority needs, such as financial management with regards cost control, and then extended to other areas.

The central data repository will be the single point of storage for all operational data, and where possible an intranet portal will be the central point of delivery for the access to this data. The aim is to prevent ‘spreadsheet spread’, a situation in which companies of all sizes, never mind SMEs, can find themselves mired. It is usually the case that the number of disparate silos of information grows in direct proportion to business revenues and production volumes, and if left unchecked will continue to grow in tune with the business. These silos, typically containing both data and business logic, need to be consolidated where possible, to ensure that all information is easily retrievable, and to harness the possibilities of reporting on key business data that is currently unmanaged.

To this end, current desktop applications and tools, such as those delivered via a range of separate spreadsheets and databases, should be individually evaluated for possible redesign. This will result in one of three decisions being made for each:

  1. The application will be transposed into a new, web-based form, to reside on the intranet, for site wide access from web browsers. The application in its current form will be scrapped. This will occur when the application;
    1. is housed in a software platform that it is not reliant upon to function as required,
    2. has business logic that can be refined/simplified/generified, to facilitate use by a broader number of users.
  2. The application will be consolidated into the development of a single desktop software platform, to be designed and built in a future project. The application in its current form will be scrapped. Anything vital to operations should be considered, primarily those which are currently housed within spreadsheets. These applications might;
    1. Require advanced interactive capabilities that cannot be reproduced in a web-based environment,
    2. Need business logic to be regularly maintained and altered as business situations and requirements change,
    3. Suffer performance issues due to their current structures,
    4. Be of prime importance to daily business operations.
  3. The application will be retained in its current form. This will occur when an application;
    1. Needs no maintenance of business logic, or very rare maintenance (no more than once every 24 months),
    2. Contains extremely simple business logic, including that which is maintainable by non-IT personnel,
    3. Relies on extremely specific desktop software dependent features integral to its current form,
    4. Is of relatively little importance to day-to-day operations.

The above points are defined in order of preference; the aim is to centrally consolidate as much business logic and data as possible into a single repository and consumption portal, and to eliminate the wide variety of separate applications growing across the business. It is, of course, expected that many applications and software tools cannot be directly transposed into a web-based format, due to unsuitability for web-based delivery. Thus the next preferred option is consolidation into a single, bespoke, combined piece of desktop software that can be fully integrated with the existing central data repository. Where possible, all individual applications should be absorbed into one of these two platforms. In an ideal world, a single point of access will exist to all systems – this is the ultimate objective. It will only be achieved if there is a robust systems architecture – comprising all aspects from systems processes to physical computing infrastructure.

As for the physical computing infrastructure, the aim of any business is to ensure full resilience for server hardware in the event of a disaster affecting the site. It is imperative that a ‘disaster scenario’ be conducted; a full migration of the services to new hardware is practiced as if in a genuine situation, to ensure a valid and reproducible disaster recover plan is in place to cope with failures to core hardware, to reduce disruption to a minimum should an actual disaster occur. Over time the investment in resilience should be increased as and when feasible and affordable. On a more mundane day-to-day level, constant reviews of nightly backups should be conducted and root causes for backup failures investigated as a high priority. All servers and communications cabinets should be installed with sufficiently powered uninterruptable power supplies (UPS), and these need to be monitored regularly and replaced/upgraded as required. The fabled “five 9s” (99.999%) is of course the target uptime for any physical systems strategy.

Whilst much attention is given to software and hardware it is crucial that staff should not be missed from an IT strategy. A thorough analysis of IT training needs should be undertaken, with the obvious intention of ensuring that training resources are focused on the areas of greatest need. Suitable IT skills training should be provided for staff to ensure that they have the underlying competencies to follow the processes expected of them in their daily routines. Critical IT facilities are often dependent on key individuals, but the reliance and dependence on IT will require an increased level of IT literacy amongst all staff. Mandatory training should be provided where basic competences are not met. Finally, as a core cog in many staff members jobs, it is vital that IT fully complies with the company’s health & safety policies, formalising IT’s contribution to a safe working environment.

Purchasing and recruitment for IT rely on an understanding of the specific circumstances that the company is experiencing at the time, and therefore it is difficult to advise on the cost and availability of hardware, software and human resources, as these change depending on the economic climate. The factors that can be considered are the functional aspects required (when considering hardware and software) and the specific technical skills required (when considering manpower). SMEs ought to be committed to selecting software and hardware which conforms to open standards; preferring those solutions which enable the joining of disparate systems and technologies in a non-proprietary way, enabling the replacement of components relatively easily. Open-source alternatives to commercial systems should be considered as part of any selection process.

To conclude this brief essay, SMEs need to be committed to managing their IT assets in a strategic and coherent manner – an ideal strategy aims to build a reliable, resilient, easily-managed and maintained technical infrastructure, which is both cost-effective and sustainable.

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