At Grassroots IT our mission is to help our clients drive meaningful change through the effective, strategic use of technology. A key part of this is understanding our client’s IT budgets and helping them to get the most bang for their buck while avoiding some common IT investment mistakes.
IT may be an essential and unavoidable cost of doing business, but with appropriate planning, your IT budget can help drive your business forward rather than simply maintaining the status quo. To achieve this however appropriate thought and planning must be devoted to IT investment decisions so as to avoid these common mistakes.
One of the biggest mistakes that we see organisations make is investing in IT solutions without proper consideration of how those investments align with their business goals. The role of IT in any organisation is to support the overall business strategy, and with a limited IT budget, every dollar must be spent to directly impact that result in a positive way.
A clearly articulated IT Strategy aligned with the overall business goals and financial strategy is a must-have for any organisation and will help to ensure that all IT investments are made with a clear understanding of how they will contribute to achieving the desired business outcomes.
Some potential areas of IT spending that tend to align strongly with business outcomes can include:
Related: Three Crucial Elements for your IT Strategy
Another mistake that we see is failing to implement proper change management processes when adopting new technology. For IT investments to be successful, employees need to understand why the investment is being made and how it will benefit them. This requires clear communication and training, as well as providing appropriate support during the transition.
Too many organisations will implement new technology without properly preparing their staff, leading to resistance and low adoption rates. This can result in wasted investment, lost productivity and a lack of return on the IT spend.
How do you avoid this mistake? Adopt a mindset of taking your team on the journey with you. Explain why the new technology is being implemented, consult with key stakeholders when designing the solution, and provide staff with training and support on the new system so that they can become comfortable and productive as quickly as possible. The more buy-in employees have along the way, the more likely the IT investment will be successful.
With change comes opportunity, yet too many organisations fail to see the potential of new technologies and ways of working, even after implementation! It’s not uncommon for an organisation to adopt a new technology without fully reviewing its work practices to take the best advantage of the new platform. Although this may feel safe and comfortable, it risks leaving significant value on the table.
One common example that we see is organisations that adopt the Microsoft 365 platform yet continue to use apps such as Zoom and Dropbox despite these same features being not only available but better integrated within Microsoft 365. Through a simple process of training staff on these Microsoft 365 features and updating business processes, not only would the business save money on app subscriptions, but users would have a more streamlined and productive experience.
So how do you avoid this mistake? Regularly review your work processes and practices after implementing a new technology. See how you can streamline workflows and improve efficiency by utilizing the full capabilities of the new platform. This may also involve training staff on these new features so that they are aware of all the tools at their disposal and can help identify opportunities for new and improved ways of working.
Every organisation invests in its IT systems, but not all organisations focus on maximising the ROI of that IT investment. By avoiding these common IT investment mistakes, you can be confident that your IT budget will deliver maximum bang-for-buck.
If you would like to speak with us about maximising the ROI of your IT budget, contact us today.
Defining your IT strategy is a powerful step towards success, yet alarmingly we still find organisations that don’t take the time to clarify what they expect or require from IT. At its simplest your IT strategy is a statement of how you intend to use IT to support your over-arching business goals. You don’t have unlimited resources to spend on IT, so your IT strategy is there to clarify where you will focus your efforts, and equally as important where you will not.
In our work with clients formulating and executing on their IT strategies we often see clear trends emerging over time in response to the ever-changing IT landscape. Of course, every company will have their own unique IT strategy, but common patterns can emerge.
As we work with our clients in preparation for the year ahead, we are seeing the following three themes appearing with consistency.
Related: Why aligning your IT strategy with business goals is critical for success
In response to the pandemic the world of work has changed significantly, also significantly shifting how people relate to their employment, the environments they work in, and the tools that they are expected to use. Simply put, user experience has become a critical element in every IT strategy.
But what does this mean for your organisation? It means that employees are expecting easy-to-use, efficient and user-friendly technology solutions that allow them to do their job effectively from any location. This includes everything from remote working tools to cloud-based collaboration platforms, all accessible as easily from their smartphone as their home office.
They are also expecting to have fingertip access to the information and expertise that they need, with top-tier training and support services available when required.
So, as you plan your IT strategy for 2024, make sure that user experience is at the forefront of your decision making and investment plans. Put yourself in the shoes of your employees and consider their daily tasks and interactions with technology – are they seamless, intuitive and empowering? If not, it’s time to make some changes.
As technology continues to evolve and become increasingly intertwined with our daily lives, the risk of cyber-attacks and data breaches has also risen exponentially. Cybersecurity is no longer just a concern for IT departments but should be a top priority for every organisation’s IT strategy, with direct board-level oversight.
A strong cybersecurity plan should include regular security audits, employee training on identifying and handling potential threats, as well as implementing the latest security software and protocols. Importantly in the post-pandemic world, your cybersecurity plan must also consider new ways of working. With many staff now working from home, old ways of securing your organisation may no longer be as effective.
Cybersecurity not a one-and-done task, but an ongoing process that must be continuously monitored and updated to stay ahead of potential threats. Make sure that your IT strategy reflects this and allocate appropriate resources to keep your organisation’s data safe and secure.
2023 was the year that artificial intelligence hit the mainstream, with the release of ChatGPT throwing the floodgates open. The new-found accessibility of AI is emerging as an inflection point on the longer-term trend of business process automation, with the combination of the two promising significant opportunities.
AI and automation can streamline processes, improve efficiency, and reduce costs in almost every area of your organisation – from customer service to HR to supply chain management. It can also provide valuable insights and data analysis that humans may miss. As the technology continues to advance, it will only become more powerful and integrated with our daily lives.
It’s no longer a question of if but when AI and automation will become an integral part of every IT strategy. So, in the year ahead, make sure that you’re keeping up with the latest developments and considering how it can enhance your organisation’s operations and drive growth.
As we move towards 2024, it’s clear that user experience, cybersecurity and AI/Automation will continue to be pivotal elements of every IT strategy. Organisations must prioritize these areas to stay competitive and meet the evolving needs of their employees and customers. With a strong focus on these essential components, your IT strategy can serve as a roadmap for success in the ever-changing digital landscape.
Keep in mind, however, that these are just three of many elements to consider when crafting your IT strategy. As technology continues to advance, new challenges and opportunities will arise, requiring organisations to stay agile and adaptable.
Grassroots IT has many years of experience working with clients to formulate IT strategies that align with business goals and lead to tangible results. If you would like to talk about your IT strategy, contact us today.
The last few years have brought technology to the top of the business agenda in a way that only a global pandemic could. Despite this unprecedented focus on information technology, and the frantic pace of change to keep up, there has been relatively little attention on true innovation. From our perspective, working with medium-sized Australian businesses, it appears that most spending has instead been concerned with paying back technological debt accumulated over years of under-investment.
The dual demands of a suddenly remote workforce and a rapidly escalating cyber-security war have knocked the wind out of many organisations, forcing them to urgently defend ground rather than seek competitive advantage. The hard learnt lesson for many is that outdated technology and business processes can rapidly flip from hard-worked assets to existential threats.
With the challenges of the pandemic slowly receding, it’s time to shift our attention to the future. To not only take stock and ensure that we have the foundations in place for success and growth but to consider some of the exciting opportunities that lie ahead.
Read on for three technology trends to watch in 2023.
For what feels like forever, we’ve been hearing the competing voices of AI proponents and detractors both promising very different, but equally startling, futures. On one hand, blissful hyper-productivity; on the other, apocalyptic job losses and societal decay. Neither prediction has come to pass. Indeed, if the utility of Apple’s Siri is anything to go by, we’re safe from any real disruption from artificial intelligence for the foreseeable future.
The fact is that we all benefit from AI every day. Every time you unlock your iPhone with face ID, scroll through a social media feed or trust your bank’s fraud detection systems, artificial intelligence is doing the heavy lifting behind the scenes.
So why will 2023 be the year of artificial intelligence? Quite simply because we have reached a tipping point. Indeed, that tipping point was reached on 30 November 2022 when OpenAI released ChatGPT and captured the popular imagination with their impressive AI chatbot. Not only are non-technical users finding ever more creative, useful and disruptive ways of using ChatGPT, but even Google has taken notice, reportedly concerned about the threat AI poses to its core search engine business.
This year we expect to see continuing strong uptake of existing applications and services built on AI (see below for more). More interestingly though we expect to see mid-sized organisations begin to experiment with integrating AI into existing applications and business processes using services such as Power Automate, ChatGPT and Azure AI.
Curiously enough small and micro-businesses have historically embraced opportunities to automate business processes more readily than their mid-sized counterparts. Larger organisations often seem content to maintain the status quo and simply spend more human labour on a task rather than applying technology and automation. To be fair though, smaller organisations don’t usually have to deal with legacy systems or the greater cost of change that can come with larger scale, and the price of failure can be higher.
2023 however is shaping up to be different for two reasons. First, the cost of labour continues to rapidly increase. Blame it on inflation, the great resignation, or any number of other reasons; the fact remains that employment costs, from recruitment through to retention, show no sign of easing any time soon.
The second factor is that the pandemic provided organisations with an unprecedented ‘burning platform’ opportunity, allowing them to shake off legacy technology and work practices in favour of modern cloud platforms, in the process putting automation far more within reach.
Here are some things that we expect to see accelerate over the next 12 months.
OK stay with me on this one. We’ve been talking about cybersecurity for years now, and for good reason. If there’s one thing that has the potential to destroy an otherwise great company, it’s a security breach. So, what’s changed to put cybersecurity on the map (again) for 2023?
Put simply, various factors are coming together to drive home the point that security is no longer just an IT problem. In fact, those organisations that continue to treat it as an IT problem are going to find themselves hitting more and more obstacles to doing business.
For starters, many contracts are starting to require a compulsory level of security compliance, and even cyber-insurance, from all parties. Not compliant with at least Essential Eight level one? Your sales team’s going to be cranky when they get disqualified from that big deal because of it.
Speaking of cyber-insurance, not only are premiums rapidly increasing but simply complying with policy requirements is becoming far more difficult. We’ve spoken with several organisations in recent months who are simply unable to obtain cyber-insurance at any price, due to their existing security posture. Some experts are even predicting that cyber threats will ultimately become un-insurable.
And of course, let’s not forget that the weakest link in any defence is always the people. The more we impose security restrictions on staff, the more likely they are to find ways to circumvent them, so the more we need to train them on the importance of cybersecurity, and so on it goes.
In short, thanks to the rapidly escalating threats facing all organisations, there is no longer any doubt that cybersecurity is now a board-level issue, and any business that treats it as anything less will very quickly be forced to deal with the consequences.
2023 is shaping up to be an exciting year, with a number of medium-term trends gaining traction. We can expect to see more mainstream adoption of these technologies as they mature past the high-risk early adoption stage and the costs of successful implementation rapidly decrease. To talk about how your organisation can see around corners and take advantage of these trends in 2023, contact us today.
It’s fair to say that you’ve invested a lot in your IT support team. If you have an IT support team in house, then you’ve spent time and money recruiting them, training them, and developing them with the hard and soft skills necessary to perform at a high standard. You’ve spent money on computers, software, desks, all sorts of gadgets you may not understand, and of course plain old (but not plain cheap) floor space in your office. If on the other hand you have decided to outsource IT support you have made a big investment in other ways, not least of all the decision of which IT provider to place your trust in. You have made the commitment to bring these people into the ‘inner circle’ of your organisation to provide services to your people that are at the core of your business’ daily activities, and continue to invest in the relationship with every interaction.
Having made such a commitment to your IT support team, you need to ensure you get the most from the investment. Here’s how.
Your IT people want to help, they really do, but they can’t work in a vacuum. No one will argue the benefit of ensuring that IT is properly aligned with the business, but a lot of people still seem mystified by how to make this happen. In my experience it’s actually very easy. You just need to openly communicate with IT what the business strategy is, and how the business will benefit from IT involvement.
You may think that your IT people don’t need to know about your marketing strategy refocus, or about the gradual shift underway towards just-in-time inventory in the packaging warehouse, but if I position the question another way – how can you expect them to align their efforts with the business if they don’t know where the business is heading?
Keep your IT people up to date on where the business is heading, and they will do everything in their power to keep IT aligned with that vision too. If you feel this isn’t happening, then talk with your IT people about it. Don’t assume they have no interest in the business, and are only interested in their computers. You may be surprised.
Your IT support team may appear to work magic at times, but rest assured they do not actually have super powers. When considering a new corporate initiative, make sure you include your IT people in on discussions at an early stage. This way they will be able to offer the benefit of their knowledge and experience to help the project move forward effectively.
I’ve lost count of the number of times that I’ve seen IT brought into projects (both big and small) late in the piece, only to be the unwilling bearers of bad news as they share why the current project plans will hit technical problems. No one wins in this situation. The IT people look like the bad guys, and substantial investments of time and money spent in planning have been wasted and need to be redone.
By looping IT in on discussions at an earlier stage the project team will have the benefit of their knowledge early on, and will be able to plan the project accordingly, avoiding any unnecessary surprises further down the track.
Whether you have your own IT people on staff, in your office or offshore, or via an outsourced arrangement with a managed IT service provider, your IT people are just that – people. As such they will flourish and bend over backwards to please you the more that they are made to feel welcomed, and valued members of your team.
Despite the popular adage, IT people are not mushrooms to be shut in a dark basement and fed….mushroom food. They are people who love to help, and engage, and feel appreciated, and the more you can make them feel this way, the harder they will work to help you and your business.
Like any working team, your IT department will flourish under the right conditions. They may be able to achieve more than you dreamt possible and show you the best possible return on investment if you keep them in the loop on your business direction, involve them early in project planning, and nurture your relationship.
While investing in technology is not an insignificant part of any business’ budget, having the right IT services in place could actually help your business to save money.
In this blog, we share our five essential services to ensure that your IT budget is well spent and your business isn’t just surviving but thriving.
Technology is ever-changing and, while it’s tempting to adopt the latest shiny gadget or software trend, it’s important to ensure that you have an IT strategy in place that aligns with your business goals. Working with an IT consultant who understands business as well as IT, you can create a plan and budget for your technology needs into the future that aligns with the direction and growth of your business. Having a plan in place will ensure that there are fewer IT emergencies and less unnecessary expenditure, which is much better for your budget.
With the right IT strategy in place, now you need a team of IT experts on hand who understand your business and can deliver IT support, services and recommendations. Managed IT services is essentially having access to a responsive helpdesk support team, combined with proactive management of your technology systems. All this comes at a fixed monthly price. It will save your business money because:
There are many software packages available to businesses these days. Growing businesses can often be stringing together many different tech tools, without really understanding the true cost to the business, which includes learning the new systems and making each tool integrate smoothly. We are firm believers in adopting a system that aligns with your business goals and strategy, offers easy integrations between apps, and is secure and reliable. That’s why we use, support and advocate for Microsoft Office 365.
Microsoft’s ever-expanding suite of business products provides many productivity and collaboration tools, cloud services and high-end security. As well as Microsoft 365 and the Office suite of apps giving you an edge in today’s ever-growing world, Microsoft offers flexible plans and scalable pricing.
With scalable pricing, you can scale up and down as your business grows or you take on projects. Flexible plans and service offerings mean you can use the Microsoft Office 365 products and services that you need now and explore additional features later. You can even mix and match to suit different staff requirements. As well as offering incredible benefits to staff retention and engagement through the use of these powerful collaboration tools, you can save money because you’re not paying for licenses and features that you don’t need.
Migrating your business systems to the cloud is now key to unlocking a plethora of great opportunities for growth in your Organisation. Your business is unique and needs the right tools with the power and flexibility to enable you to drive productivity while reducing risk. The right cloud solution will bring enterprise grade capabilities into your business in an accessible and easy to manage package.
Not sure what cloud solutions even means? Some business products that you could utilise using the cloud include:
When you consider what it might cost you to have an internet service that constantly lags or drops out, an outdated phone system, or not having backups in place if an incident causes your whole business system to be taken out, you can see that having the right cloud services in place can actually save your business money.
Cyber-security threats and data breaches are becoming increasingly rampant, sophisticated and difficult to mitigate. Even more worrying is the rising cost of cybercrime to businesses. In Australia, the average cost of a single cybercrime is about $276,000. Implementing and maintaining a strong cybersecurity stance is crucial in every business, regardless of its size, and businesses these days can’t afford not to have adequate protection in place as the risks are too great.
A great place to start with cybersecurity is to learn more about the Essential 8 framework and ensure your business has a strategy in place that covers the basics of prevention, limiting the extent of attacks and disaster recovery. We are so passionate about security solutions that every client we support with a Managed IT Agreement has the following baseline inclusions:
As an added bonus, one more thing to consider when it comes to managing your technology budget, is Adoption and Change Management.
Focusing on the people side of things in a business can often be overlooked but is one of the most important aspects of growing your business. Without managing the people side of change, even an organisation that has met all the technical requirements and milestones can still fail to deliver results and benefits. In our experience working with many clients over a range of industries, we know that organisations that embrace change management are more likely to achieve the intended project outcomes, stay on schedule and stay on budget. It’s all very well to implement the best technology, but if no one is using it, it’s no use to anyone and it certainly isn’t bringing growth to your Organisation.
By investing in an IT plan and strategy, managed IT support services, a reliable platform for productivity and collaboration, cloud solutions and cybersecurity, you can actually save your business money in the long run. The important factor is to ensure they are the right technology services for your business and aligned with your overall business strategy so that the business can grow and thrive.
I recently threw a question out to a group of my professional peers, asking them what they saw as the benefits of aligning IT strategy with business strategy.
The responses I received were nothing short of exceptional. It reinforced for me (yet again) what an insightful, intelligent and progressive professional community I have the good fortune to be part of.
Respondents represented a diverse range of positions including CEOs, founders, self-employed and employees, with an equally diverse range of industries represented, including IT, retail, professional services, medical and creative industries.
Even though everyone brought their own unique perspective to the discussion it was interesting to see that responses could be classed easily within three main categories.
Related: Three Crucial Elements for your IT Strategy
A long time ago in a galaxy far, far away, computers were an indulgent option when running a business. Computers were expensive, had limited functionality and, to many, provided limited value beyond what traditional methods had done. Despite this, the march towards a technology-enabled future proceeded, lead by finance departments looking for efficiencies promised by so called ‘spreadsheet’ software.
Fast forward to today and you would be hard pressed to find a business not dependent on IT in some way or another. These days IT is a given in pretty much every element of business, from finance to marketing, production, design, customer service and all points in between.
Given this universal adoption, simply ‘using’ IT these days is no longer enough to gain advantage, but is now mere table stakes to stay in the game. So does that mean that technology no longer has any competitive advantage to offer? Quite the contrary. However to gain that advantage IT can no longer be considered an operational issue, but must be given a seat at the board table and aligned strongly with the overall business strategy.
In the not too distant past, being in ‘the cloud’ was a buzz word, but now a significant amount of technology used in businesses is cloud based.
Looking forward, businesses of all sizes and industries seem to be shifting their focus to data. Using business data to make informed decisions is actually quite a recent phenomenon. Where managers once relied upon ‘gut feel’ to chart their course, there are now extensive opportunities to gather, store, organise and utilise information from all sorts of sources to improve organisational agility and effectiveness.
So, essentially, there’s no competitive advantage in merely ‘using’ technology these days, but in using it strategically in alignment with the overall business goals.
Another benefit of aligning IT strategies with business goals is to focus the stakeholders on the objectives of the business. Then the IT systems can be used effectively to carry out those business goals.
It sounds simple enough, but first you need to be clear on what the business strategy is and clearly communicate this strategy with the people in your organisation, including your IT department, so they understand the core business goals and can work towards them. It’s often assumed that an organisation already has, and actively executes a strategic plan, but unfortunately this isn’t always the case.
Aligning IT strategy with business goals helps guide and inform decision making, and ensures that everyone is working towards the same goals and are on the same page. IT systems that are selected and implemented in line with an organisation’s strategic plan are more likely to be valuable, well used tools. A team is more likely to be on board with implementation and training on the new technology if they understand how the IT systems fit in with the business goals.
Focusing IT efforts towards meeting data-driven business objectives will ensure that the whole business believes in the value of IT in achieving the underlying strategic course of the organisation. These days, there are more and more tools available to help harness the power of data from multiple sources into making informed decisions about the direction of the business.
In the Facebook age and with the advent of increased scrutiny from government and regulatory bodies, businesses of all sizes need to be more conscious of the way that they manage and secure sensitive information. Whilst there is some fantastic technology to assist businesses to manage their security, the reality is that alignment of business processes and competently trained staff operating in a culture of awareness is essential in realising the objective of running a secure business.
Ultimately, it’s very much a two way street. Not only is it about your IT being responsive and understanding the needs of your business, but aligning your IT and business objectives also means that you are ensuring that the way in which risks and opportunities around technology are better managed in the business.
Especially in smaller organisations, resources will always be limited, so aligning IT with business strategy means that resources are being used most effectively.
Using the technology that aligns with business goals means that efficiencies can be achieved, which in turn keeps costs to a minimum.
Sometimes with technology, it’s easy to get swept up in the latest shiny gadgets and trends. And while it might be fun to own the latest iPhone, it may not be a necessary tool for stakeholders to achieve their goals. There will also be areas where you may not want to invest in new technologies because it would be undesirable due to high risks, costs or even fragmentation of your data or systems.
If the IT goals are aligned with the business goals, it allows the business to be proactive and intentional with the IT spend and therefore reduce unnecessary costs that come from being at the whim of trends.
There are many benefits to aligning your business’ IT strategy with its business goals, but they can largely be categorised into three areas. In order to remain competitive, to ensure that all stakeholders are working towards the same goals, and to maximise the value from limited resources, it’s worthwhile for business and IT strategies to be aligned. Technology for the sake of technology is of no benefit to anyone, however that doesn’t mean IT should limit its role to processing work orders and printing labels. If IT is providing technology leadership and aligning with the goals of the organisation, that is where the true power of IT will be found in the business.
It’s been an amazing few years at Grassroots IT, not least of all because of the international growth that we’ve experienced both with our clients and our team. If you had have asked me five years ago whether Grassroots IT would one day not only be supporting multinational clients, but have our own workforce spread across three countries, I would have replied with “Maybe in 20 years”. Yet here we are, doing just that.
It turns out that running a geographically and culturally diverse team can be pretty rewarding but, like anything in business, it’s not without its challenges. Issues such as organisational culture, HR and, of course, legal and accounting matters all become so much more important when working with a diverse team. The good news is that there are some great resources available to help navigate these areas successfully.
Day to day operational activities also need careful attention to ensure that staff can operate effectively. Simply transferring a phone call to a colleague can become an entirely different proposition when that colleague is in a different timezone. Again, there is good news with a number of technology tools available to help.
Read on as we run through a selection of the tools that we use at Grassroots IT to let our diverse staff effectively support our clients across multiple countries and timezones.
Voice over IP (VoIP) is a technology that lets us run our phones over network and internet connections, rather than traditional phone lines. Using VoIP means that we’re not physically constrained to a particular location the way that we would be with traditional phone lines, as well as having some great features that are either hard or expensive to come by with traditional telephony.
Here are some examples of how we are using this to our advantage:
We haven’t done a direct comparison of our call costs using VoIP vs using traditional telephony, so I can’t comment on that, however I can say that we could not operate the way we do without the unique flexibility that VoIP provides.
Video calls in Microsoft Teams (a core part of Microsoft Office 365) are hands down our preferred way of communicating between team members. When we can’t physically be together in the same room, a video call is the next best thing. There’s so much unspoken context and communication that simply gets lost in email, chat and even voice calls that you can still convey via video. We have our daily huddles across countries using Teams, and making a video call is our preferred channel for one on one, or multi-party discussions.
Teams is also an excellent chat platform for those quick, sharp questions and answers that don’t need a full blown conversation. We have a number of different channels within Teams covering range of topics such as one for helpdesk, one for the leadership team, and one for sharing the fun personal projects and hobbies we each enjoy.
Even though we find ourselves using fewer documents, such as Word and Excel files, they are still an important part of our business, and often need to be accessible to staff in multiple locations, as well as remotely from home or a client site. Traditionally we have used a shared folder (which we called our G Drive) on one of our servers, which remote staff would need to access via a VPN. These days with far more powerful and flexible options available, we no longer have a G drive at all.
Microsoft SharePoint is our preferred method of file storage and sharing, as well as for hosting our intranet with sections for HR, Service Delivery and Projects. SharePoint also integrates perfectly with Microsoft Teams, meaning that a lot of the time we don’t even have to leave the excellent Teams application to access our SharePoint content.
You may have noticed a common thread running through all of these systems that we rely on – namely that they all support, at their core, the two concepts of Cloud and Mobility. The reality is that cloud and mobile friendly applications are now the norm (for very good reason), and if you’re not embracing this yet in your business, you can be confident that your clients and competitors are. In our case these solutions have enabled our business to evolve in directions that only a few years ago would have been very challenging and expensive.
“Our strategy is to provide a superior service and charge more than the competition does.”
“Our strategy is cost based…we can service the client cheaper than our competitors can.”
“We use the shotgun strategy. It works well for us.”
“Our strategy is to not grow too fast.”
We have all heard these strategy statements, or ones like them. There are many more where they come from and a significant similarity between them is that none are a strategy on its own.
The point here is that each statement may address a key business function or decision but if it is pursued in isolation or is over emphasised, it may lead to gaps or weaknesses in other areas of the business plan. Business strategists (owners, managers and entrepreneurs) must have an integrated, overarching concept of how the business will achieve its objectives – a strategy. It may seem as though strategy is something for the ‘big corporates’ to worry about, but strategy is just as important for small and medium enterprises – to channel the passion and drive that most small business owners have into positive results.
It is interesting that the word ‘strategy’ is derived from the Greek ‘strategos, or the art of the General’. An important link here is that the General(s) referred to, similar to business leaders, had to orchestrate multiple battles on multiple fronts over extended time frames. They had to resource their army then ensure that all components of their forces were where they had to be, when they had to be, doing what they had to do and complementing each other. Hannibal’s decision to use elephants to cross the alps was not his whole strategy…it was a small part of it.
So where to for help? A search for ‘business strategy’ books on Amazon.com this week resulted in 13,246 listings. Needless to say there is no shortage of reading material available on the subject. Getting straight to the point, an excellent article on the subject is by respected authors Hambrick & Frederickson (2001) who argue that a comprehensive business strategy addresses five elements.
1. ARENAS: Where will we compete?
2. VEHICLES: How will we get there?
3. DIFFERENTIATORS: How will we win?
3. STAGING: What will our speed and sequence be?
4. ECONOMIC LOGIC: How should we obtain our returns?
To illustrate their model, Hambrick & Frederickson map out the strategy of an international furniture retailer. Can you guess who it is?
ARENAS: Where will we compete?
VEHICLES: How will we get there?
DIFFERENTIATORS: How will we win?
STAGING: What will our speed and sequence be?
ECONOMIC LOGIC: How should we obtain our returns?
I’m sure it will come as no surprise to know that it will take more than answering questions off the top of your head to develop a good strategy. A robust strategy will require the investment of considerable time and effort in analysing your competitors, industry, market trends and customer needs as well as your own capabilities and capacity.
For those of you who would like to test the quality of their strategy Hambrick & Frederickson offer six evaluation criteria:
Whether you develop your strategy formally or informally, there is no doubt that it will be better for considering each of the five elements.
Good luck.
Reference:
Hambrick, D.C. & Frederickson. J. W., 2001, ‘Are you sure you have a strategy?’, Academy of Management Executive, 1 October, pp. 48-59.
Grassroots IT is a managed service provider, specialising in Microsoft solutions. Our extensive IT expertise stems from our experience in collaborating with diverse clients across an array of industries and organisational levels.
