Business Strategies have been around for a long
time. ICT Strategies less so. But the new kid on the block is the
Digital Strategy. What is it, and how does it differ from the first
Dictionary has two primary meanings associated with Strategy. The first
is below. The second has a military context. This is understandable
as many management concepts still in use today originated from the
Definition of Strategy: a plan of action designed to achieve a long-term or overall aim. Definition
makes sense that a Business Strategy is therefore a plan of action
designed to achieve a long-term or overall aim for a business, or an
organisation. Their names may vary from Business Strategy to Corporate
Strategy, Organisational Strategy or something else. However, most of
us know what these look like even if their name may vary. It is usually
developed, or at least lead by the Chief Executive, and it may have
extensive input from the Board.
ICT Strategy can take a number of forms. In many organisations it is a
response to the needs of the Business Strategy. That is, it defines
the ICT plan of action designed to achieve the ICT related aims of the
business. It is usually developed by the Chief Information Officer
(CIO) or an equivalent role. The Chief Executive is often consulted and
involved to varying degrees depending on the organisation and on the
Chief Executive. The Board could also be involved, although in my
experience it is rare for most Boards in Australia to play an active
role in the preparation of an ICT Strategy.
my view, this approach to the development of strategy has been a big
weakness for many organisations. It is based on a flawed assumption.
And that assumption is that ICT can only form an output from Business
Strategy. By definition, that means that ICT is not a useful input into
Business Strategy. This is flawed thinking, and has been for many
years. ICT has the potential to impact on Business Strategy. And this
effect is becoming more pronounced with each passing year. For instance
ICT innovations are allowing new entrants to enter existing markets,
the creation of brand new markets and the creation of new business
models and industry structures. ICT is changing our expectations (as
clients and potential clients) for how we interact with organisations.
If you have any doubt, you would know that you and most of your friends
use ICT daily to buy, consume or research various products and
services. If you still have doubts, read Marc Andreessen’s article, Why
Software Is Eating The World at WSJ Article Link.
I have put some direct quotes from this article below.
this flawed assumption, Business and ICT Strategies have largely been
developed in this way for many years. In more recent times, and perhaps
for only the past five years, the Digital Strategy has come along. It
primarily came out of marketing departments who realised that there were more
digital marketing and advertising options that they were having to
consider. But beyond that, they also realised that customers wanted to
interact with their companies in multiple ways, including digital and
online ways. In some cases they also saw their own market share being
eroded by these new entrants that were capitalising on Digital
approaches to doing business, and these Digital approaches were being
we have seen the rise of the Digital Strategy. While its development
may be lead by the Marketing Department, it is increasingly becoming of
major interest to Chief Executives and Boards. There have been enough
company failures caused through being blindsided by Digitally enabled
alternatives that it is worth them taking a keen interest. This also
means that the Digital Strategy is taking on a broader view, not just a
marketing view but a broader strategic view of the organisation, and
considering things such as industry structures, competitor behaviour,
organisational capabilities, organisational structures, and many aspects
of an organisation’s business strategy.
evolution of the Digital Strategy is now becoming what the ICT Strategy
could have been, and perhaps in some rare cases, has always been. The
Digital Strategy is now becoming an input into the broader strategic
view of the organisation, helping to inform the Board and Executive
team, and providing an input into the entire organisation’s strategy.
word of warning: Be careful assuming that the above descriptions apply
in every organisation though. In some cases ICT and Business Strategy
formation does happen in concert with each other, but this is rare. And
in some cases a Digital Strategy remains a marketing only view although
this is becoming less common as a broader view evolves of what a
Digital Strategy should be.
all three strategies sit side by side? The easy answer is yes. But
over time, it is natural that they could merge. For instance, would
Amazon or Google or Netflix or Apple or Skype have a Digital Strategy
and a Business Strategy. I cant say for sure, but I don’t believe that
they would think of strategy in two separate domains in this way. In
most organisations, it will be useful to have a Digital Strategy. It
will introduce new ideas and concepts and challenge the existing
organisation and hopefully have a positive impact on the overall
strategy for the business.
the emergence of the Digital Strategy having a whole of organisation
view, and even taking an industry and marketplace view, is a good
thing. It helps organisations to see the opportunity and risk that is
in front of them. The view of many commentators is that eventually
every company will have to become a technology company or they will no
longer be around. If that is true then the sooner you start this
evolution the better off you will be. And if a Digital Strategy helps
get you started then that is great news.
Developed by the Board and Chief Executive
Strategy Development is Lead By
CEO and Board
Was Marketing, Increasingly CEO & Board
Implications for every aspect of an organisations
Considers Client and Market Needs
Considers Industry and Competitor Behaviour
Considers new technology opportunities
Managing Director, Information Professionals.
is one of Australia’s most trusted IT Change Management advisors.
He also has other entrepreneurial business interests that he operates
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Excerpts from “Why Software Is Eating The World” (WSJ OP )
and more major businesses and industries are being run on software and
delivered as online services—from movies to agriculture to national
- The world's largest bookseller, Amazon, is a software company
- Largest video service by number of subscribers is a software company: Netflix
- The most dominant music companies are software companies: Apple's iTunes, Spotify and Pandora
- The fastest growing entertainment companies are videogame makers—again, software.
the fastest growing major videogame company is Zynga (maker of games
including FarmVille), which delivers its games entirely online.
best new movie production company in many decades, Pixar, was a
software company. Disney—Disney!—had to buy Pixar, a software company,
to remain relevant in animated movies.
of course, was eaten by software long ago. It's virtually impossible to
buy a mobile phone that doesn't include a software-powered camera, and
photos are uploaded automatically to the Internet for permanent
archiving and global sharing. Companies like Shutterfly, Snapfish and
Flickr have stepped into Kodak's place.
- Today's largest direct marketing platform is a software company—Google.
- Today's fastest growing telecom company is Skype, a software company
- LinkedIn is today's fastest growing recruiting company.
- If you still need convincing or want to read more, read the entire article.
Labels: CEO, CIO, Corporate, digital, digital marketing, Digital Strategy, Enterprise, Evolution CIO, Hybrid CIO, ICT, Strategy, Technology Company