The Biggest Software Mistake Your Company is Probably Making

error-blog 1 picMost companies spend a lot of time thinking about IT — information technology – which refers to computer hardware, computing capabilities, storage, transmission, security, etc. Virtually everyone works on or with a computer or electronic device of some kind. Evolving technology is “in our face” all the time. You can’t help but see colleagues with the newest gadget, smartphone, or laptop, or read headlines about what Apple is up to next, or the latest security breach. Our awareness of changing technology and the associated risks is high. So most companies, whether or not they have a CTO, have a strategy for keeping their tech up to date. For example, a company may have a policy that desktops are replaced every 5 years, laptops every two years, and smartphones are BYO. IT is often what CIOs and IT directors/managers think of first. They certainly think about and focus most of their time on IT, keeping the servers up and running.

But what often gets lost in the focus on the latest and greatest tech is the information that all that tech is managing. A company’s information is worth much more than their hardware: it represents the company’s assets, including customer lists, product information, intellectual property, and historic documentation. And it’s the information that represents the company’s growth potential for the future. So an information systems (IS) strategy – one that addresses which software a company uses and how to manage data and data transmission— is a critical part of a company’s planning. Many CIOs neglect to consider how information systems could and should support business growth.

What happens then is the tools selected, the data stored, where and how the data is stored, the quality of the data, how the software works, the functions the software performs, the reports and data analysis it provides, etc. eventually becomes cumbersome, gets in the way of business growth. People in operations as well as in IT spend more time supporting the systems than using them.

So what is an IS strategy?

An IS strategy is an approach to managing your company’s information assets with software that reflects your company’s values and best helps your reach your goals, regardless of what other companies or the rest of the market is doing. It gives you a framework for making decisions so you can be confident about what software to buy (or NOT buy), where the software should be hosted, what types of technical people you need and whether they are on staff, contracted, or brought in as vendors.

Why do I need one?

The reason you need an IS strategy one is closely related to the reason you have a corporate strategy, or a market strategy, where you make business decisions based on corporate values and goals. Only you know best what those values and goals are. There will always people advising you to choose the newest, best, or most robust software, but there really is no “one size fits all” software. Think of it like a vacation destination: say you are going to the beach, and you check GPS for directions. The “best” directions depend on your personal goals for the trip: do you want to get there as fast as possible? Or would you rather avoid congested highways? Or make a side trip to visit a friend on the way? There are many roads you can take to reach your destination, and each has pros and cons.

The same applies to an IS strategy. Is your company taking a slow, organic growth model, or aggressively pursuing growth that will result in significant changes for the company (hiring many new employees, increasing leads, transactions, production, shipments, etc.)? In a small company, operations are more straightforward and manageable. But if your company is approaching or passing the 50-employee mark, the increased size and complexity of your structure and operations necessarily leads to complexity in your IS setup and needs. The same is true and more so if your company is passing the 1,000-employee mark. That increased size underlines the need for a formal IS strategy since it becomes increasingly difficult to track and share information.

Without a clear sense of what software you need to run the organization now and in the future, you don’t have a way to know what software is and is not appropriate to acquire and implement. Without an IS strategy, CIOs may select products or allow departments to select products to address specific needs, and eventually end up with overlapping or incompatible systems, a hodgepodge of tools that don’t work well together and hold the company back by wasting valuable employee time in process and data inefficiencies. Additionally, unplanned decisions on data storage, software design architecture, locally or remotely hosted software applications, etc. can have a serious impact on the success of a business when an IS strategy is not in place.

To summarize, an IS strategy enables a business’s future plans and helps them succeed by selecting the best data storage, software, and reporting/analysis systems to achieve their business goals, and making the best software functional decisions that work in concert with a company’s overall business plan for future success.

Next Up: Find out what a winning IS strategy looks like and how to build one for your company.