Strategy and Governance is becoming increasingly important in IT management. In recent years, the demands on IT have evolved from a mere support function into a full business enabler with operating models and processes. To meet these growing demands, it is essential that IT management is aligned with business strategy. The focus areas for Strategy and Governance differ with the size of the company according to the company’s objectives. The importance of IT strategy, governance models and reporting grows along with the company. Diversity management, harmonizing and synergy become more essential for larger companies.
Net sales category 10 M€, operating locally
In small companies, IT management must be well-organized: the roles and responsibilities of personnel must be described, and the decision-making model needs to be clear.
Basic documentation on IT strategy, information security and architecture ensures that IT development focuses on achieving the company’s objectives. Small companies must also understand their IT costs.
It is essential for small companies to find the right balance between internal and purchased services. The amount of purchased services increases with company growth. This emphasizes the role of competent sourcing with good cost awareness.
Net sales category 100 M€, decentralized operations
Selecting the appropriate centralization/decentralization model for IT is a key priority for Strategy and Governance in medium-sized companies. Usually, centralized Strategy and Governance is the best option.
When a company has several subsidiaries, the development of an IT strategy, governance model and reporting grows in importance. In addition, a scalable architecture, strategic technology choices and quality assurance have each an important role.
Net sales category 1 000 M€, operating internationally
Diversity management together with increasing operational efficiency through harmonization and consolidation are the focus areas in an internationally operating company. Large companies should strive to deploy IT processes and unified information systems that support these processes.
IT needs to invest in adequate competence to support the development of business models and processes, for example in Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM), as well as in Enterprise Architecture development.
Net sales category 10 000 M€, operating globally
Various types of matrix organizations are typical for very large companies. In such organizations, the focus is on keeping procedures efficient and benefiting from group-level synergies. Strong Enterprise Architecture competence are a must and can come from inside or outside of the company.
Figure 3.9.1 Strategy and Governance focus changes with the size and complexity of the company.
IT strategy steers the implementation of the IT-related part of the company’s strategy, while providing the direction for IT management. Governance ensures that the operation and development of IT support the achievement of targets specified in the IT strategy.