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Knowing your company’s IT culture will pay off

Nov 28, 20053 mins

When working with clients, one of the things I try hard to assess is how the organization views technology: Is it a strategic competitive advantage or a necessary evil? There’s no right answer.

When working with clients, one of the things I try hard to assess is how the organization views technology: Is it a strategic competitive advantage or a necessary evil?

There’s no right answer – for some companies, technology is a necessary evil, and the right amount to spend on it is as little as possible. For others, IT can be the critical component in overall success or failure. The true challenge of assessing an IT culture is making sure it’s in line with the company’s business drivers – that is, making sure that there’s a fit between the company’s business drivers and the way it views technology.

I’ll typically put companies into four categories, based on their IT cultures: bleeding edge, aggressive, moderate and conservative.

Bleeding-edge companies tend to have high margins and focus on revenue growth and profitability as their critical business drivers.

They’re willing to take a risk on any technology earlier in its maturity life cycle than most firms, because for them the potential competitive advantage resulting from early adoption outweighs the risks and challenges of rolling out a technology that might not be fully baked. Wall Street firms are classic archetypes (in fact, in a recent benchmark we did with the Wall Street Technology Association, half of the WSTA’s member firms described themselves as bleeding edge).

Aggressive companies are fairly similar, just not as extreme. They’re more likely than the bleeding-edge folks to list cost containment as one of their top three drivers (though it’s usually ranked third). They may have challenges of scope or scale that make it impractical to roll out truly bleeding-edge technologies. Many large manufacturers and pharmaceutical firms, as well as some financial services organizations, classify themselves as aggressive.

Moderate and conservative organizations generally wait until a technology has proven itself and gained market traction before deploying it. These categories often include retailers and manufacturers of traditional wares, who typically cite cost containment as their top priority.

Let’s see how this plays out with some top-of-the news technologies:

  • MPLS. Aggressive and bleeding-edge companies are moving, well, aggressively toward MPLS-based services, while conservative firms are still inking three-year frame-relay deals. What should your firm be doing? That depends. An aggressive firm that’s midway through a three-year frame contract should probably assess switching to MPLS before the contract terminates; a conservative firm can easily wait until contract termination to review.

  • VoIP. Rollouts have moved well into the moderate camp – traditional retailers and manufacturers are jumping on the VoIP bandwagon, along with financial services firms, pharmaceuticals and high-tech manufacturers. Unless you’re sure your company is conservative, you should also be assessing VoIP.

  • Real-time collaboration. Firms that are moving aggressively forward with RTC tend toward the bleeding edge, particularly consulting and professional services firms that view individual productivity as a competitive advantage. But watch for this to change rapidly over the next 12 to 18 months, as these technologies become more mainstream.

The bottom line? Thoroughly understanding your organization’s IT culture lets you effectively prioritize your firm’s strategic technology planning.