The value of IT is recognized through strategy

If we had a dollar for every time IT was considered a cost center and not a revenue center, we’d have enough budget for IT innovation. We see it, you see it, but management doesn’t - IT largely operates under the currents and keeps everything up. How much does a company lose in revenue from a small IT outage? Questions like these are unaccounted for and usually overlooked. From the subway you take to work to the groceries you buy at your local supermarket – everything today is dependent on IT systems the value of which doesn’t become obvious unless it doesn’t work. But when it doesn’t work, end users are too frustrated or annoyed to appreciate these systems or the people who put it together.

In all honesty, IT is a cost center but that’s not necessarily a bad thing. Revenue and cost centers are mere accounting terms and should not be construed or misunderstood as derogatory terms. It’s true that IT doesn’t have direct implications on revenue and that’s precisely why C-staff meetings don’t pay much attention to it. IT leaders continue working in silos, resolving tickets day in and day out, engrossed in firefighting more often than not, and hardly ever being appreciated for it. A certain culture continues to propagate in the company promoting the idea that IT is nothing more than a support function, leading to lower priorities in business discussions and an underappreciated staff that’s also underpaid in most scenarios.

The value of IT isn’t in the things that happen but in the things that don’t - countless safety measures preventing security breaches, an infrastructure ensuring minimal downtime and IT outages, top-notch support to keep an entire organization constantly up and running, and innovative solutions to modern problems to maximize efficiency. This value isn’t quite transparent and IT leaders who perpetuate this opacity continue building on the narrative that IT is of no value to the company.

You don’t just need a foot in the door, you need a whole seat at the table. And that won’t happen until you realize that IT leaders need to be more business-oriented than tech-oriented. IT will never not be seen as a cost center until proven otherwise and that narrative can only change when certain communication silos are broken. As long as IT doesn’t align with business goals directly and makes the company realize the value of it, there will always be an unfulfilled gap. And how do you align with business goals? You work on an IT strategy.

What does it mean to have an IT strategy?

Being in a leadership position in IT will definitely entail creating IT strategies that align with business objectives. There are certain processes in place already that dictate the parallels between IT and how it should progress in alignment with the organization – frameworks like ITIL are guiding principles that shape the ITSM (IT Service Management). These are foundations on which the entire IT infrastructure should be built, and every decision made henceforth should benefit the business as a whole.

IT Strategy doesn’t mean being tactical. Although IT requires tactics more than most departments, being tactical is more about handling problems as and when they arise. A tactical-only approach is not tethered to how the business runs and often leads to a narrowed funnel where most leaders don’t see beyond what’s at hand. Eventually, ITSM begins to tread slower leading to frequent downtimes, legacy systems unable to support modern needs, and disconnection from where the business is headed.

IT Strategy is more about the future. It’s defining a general direction where IT is headed and more importantly, how does that direction make sense on a grander scale i.e. business outcomes. The primary purpose of IT is to technologically support where the business wants to go and help steer in that direction. Any shortcomings or incapabilities shouldn’t be because of IT – this should be one of your goals. When you can communicate the value of IT through the right strategies, it ceases to be seen as a cost center.

How to create a comprehensive IT strategy

An IT strategy should be considered a business strategy rather than a technical one and should be made as comprehensive as possible. Strategizing isn’t simple, but how you explain it should be. Here’s are a few simple things you can follow for creating an IT strategy.

Current assessment and defining timelines

Before anything else, it’s important to get a pulse on where things are at present. As an IT leader, it would be wise to take stock of the state of the company from higher management and interact with other departments in the process. The more intricately you understand how different parts of the business function, the clearer it is to zoom out and see how IT fits into the whole picture. The CEO and CFO will help you understand where they see the business heading and what’s required to get there.

Now, it’s important to take these learnings back to your team and discuss it with them. Where are things at the moment? What’s the tech stack? What do your vendor contracts look like? What are your team’s current priorities and goals? The gaps between where you are and where you need to be will reveal itself as you know things better. An idea starts to take shape – this idea is how the strategy will evolve.

Timeline is essential to figure out in the beginning because there can be no end to a strategy. Most businesses usually have 3-5 year plans and strategize accordingly. Again, this is something you figure out with the C-staff, so you know how long ahead your strategy needs to account for. IT strategies that are too short (1 year or less) might be limiting in terms of seeing any tangible results and those that are too long (10 years or more) might become obsolete.

Let’s say you’re working for a fast-food chain that aims to expand to 100 more locations in the next 5 years. Along with this, they want to equip these places with self-serve customer kiosks to order takeaways without manual dependencies. This will require strong IT infrastructural support along with strategies that make sense to everyone who’s involved.

Understanding limitations and setting realistic goals & project descriptions

Once you’ve ‘taken things to the drawing board’ and done the groundwork, the next step usually is to define boundaries and roadmaps. More importantly, conduct gap analysis to understand what are the gaps that need to be filled to align with your goals better. Explain what needs to change and how you’re going to change it. Also, how will this change justify the resources required. It’s best to break down these goals in multiple projects and delegate them to your team based on expertise, availability, and priority.

A lot of the decisions you make will directly influence the entire organization. From the above example, a fast-food chain aiming to expand to 100 locations will need IT systems supporting this expansion over 5 years. Not accounting for growth or the inability to scale will definitely leave a hefty dent in how IT is perceived. Your reputation as a leader depends almost entirely on these deliverables and the timelines attached to them. It’s detrimental to not make empty promises to the company and yet also ensure that your team isn’t overworked with unrealistic expectations.

Ensuring accountability and deliverability with KPIs

Successful IT leaders connect their performance indicators to concrete business results ("increase operational efficiency") through specific IT initiatives ("modernize legacy systems"). Each metric needs clear targets ("reduce system maintenance costs by 40%") while supporting broader organizational goals.

When it comes to being able to demonstrate departmental value, IT leaders need to look beyond technical target-based KPIs like tickets solved and move towards more business KPIs like:

• Team Performance Index: A composite score combining delivery speed, quality metrics, and team satisfaction. Helps identify team health and capacity for handling increased demands.
• Operational Excellence Rating Combines system availability, incident response times, and service level achievement into a single metric of operational performance.
• Talent Development Index Measures team skill growth, certification achievements, and succession readiness for key positions.
• Cost Optimization Ratio Tracks the balance between cost reduction initiatives and value-adding investments across the IT portfolio.

We’ve written a whole comprehensive eBook about the 10 KPIs that all IT leaders and managers must track.

IT budgeting and innovative initiatives

The project roadmap and expectations need financial support that justifies your strategic plan. A strategy document that isn’t extensive enough won’t be strong enough to convince the higher uppers of the associated costs. It can be beneficial to break down these IT costs across projects, teams, timelines, licenses, vendor contracts, hardware, software, security, infrastructure, maintenance, and miscellaneous expenses.

Accounting for changing technologies and digital transformation will be a smart move, and the reasons are pretty obvious. Technologically, things will be very different 5 years from now and your strategy needs to leave room for such adjustments.

What might an IT strategy document look like?

Remember, an IT strategy document is a business document and not a technical document. Overly technical terms will not be received well by people who don’t understand IT as intimately as you do, in fact, too many jargons might lead to confusion and even objection to what you present. As a general rule of thumb, it’s probably in your best interest to simplify the strategy as much as you can and present it as closely as possible to the expected business outcomes.

Considering you’re working on a presentation for your IT strategy, it would be advisable to keep it interesting but relay all necessary information simultaneously. Keep it to about 10-12 slides at most and avoid too much text to explain your stance. A standard presentation can include the following details:

1. Where does IT currently stand: what are the ongoing processes, dedicated staff, incurred costs, accumulated technical debt, priorities, current investments, etc.
2. What are the organizations goals in the next 3-5 years?
3. What are your plans in terms of aligning IT with these goals: what changes will you make, what will you prioritize, where will you allocate budget, digital transformation initiatives, etc.
4. Strengths: recount how IT supports the entire organization and how this strategy will only further enable the business to meet their goals swiftly.
5. Weaknesses: where is IT lacking at the moment and how do you plan on improving it.
6. Specific project descriptions and prioritization: breakdown the IT strategy into projects, prioritize what’s immediate based on business needs, and assign staff to these projects based on expertise.
7. Timelines: mention the expected timelines for these projects and justify them.
8. Necessary resources: talk about the resources needed i.e. team expansion, staff augmentation, vendors, outsourcing, licenses, cloud management, etc.
9. Projected budgets and costs: how much are these strategic initiatives expected to cost, how are these costs justified, and how will these investments benefit the company.

Along with the recommendations in terms of what you should talk about, there are also certain things that you should most probably avoid:

• Indulging too much in the tech stack and the technical specification of the projects.
• Wasting your time trying to look down on things that didn’t work or victimize yourself by not taking responsibility for whatever happened before you came into the role.
• Promising outcomes that you cannot justify or making claims based on exaggerated assumptions.
• Complicating the IT strategy with too many details.
• Not leaving room for discussions or questions and also not being prepared for them.
• Creating a strategy that is too fixated or rigid to account for changing business needs or the technological landscape.

Some other recommendations for your IT strategy

Using ITIL best practices

The IT Infrastructure Library (ITIL) is a widely adopted framework that helps organizations structure their IT service management (ITSM) processes to align with broader business goals. Implementing ITIL best practices helps businesses improve efficiency, enhance customer satisfaction, and reduce service disruptions. Here are key guiding principles to consider when building your IT strategy:

1. Start Where You Are: Rather than overhauling everything from scratch, assess your current IT landscape. Identify strengths, weaknesses, and existing capabilities before making improvements. This prevents unnecessary disruptions and ensures that strategies are built on a solid foundation. Conducting an IT maturity assessment can help pinpoint areas that need optimization.
2. Prioritize Business Value: IT should not operate in isolation—it must directly support business objectives. Focus on delivering value to stakeholders by aligning IT initiatives with strategic business goals. This means ensuring that IT investments improve productivity, enhance customer experiences, and drive revenue growth. Regularly measure key performance indicators (KPIs) to track how IT contributes to overall business success.
3. Learn and Iterate: An IT strategy isn’t a one-time plan—it’s a continuous improvement cycle. Use data-driven insights, incident reports, and feedback loops to refine processes. Encourage a culture of experimentation where teams can test new solutions, learn from failures, and optimize workflows accordingly. Implementing Agile and DevOps methodologies can help IT teams stay flexible and responsive.
4. Remove Silos: Cross-functional collaboration is key to effective IT service management. Break down departmental silos by fostering open communication between IT, business units, and end users. Utilize collaboration tools, regular stand-up meetings, and shared KPIs to ensure alignment. A unified ITSM platform can also streamline workflows and improve visibility across teams.
5. Automate and Transform: Leverage automation to eliminate manual, repetitive tasks and improve efficiency. Implement AI-driven IT operations (AIOps), robotic process automation (RPA), and self-service portals to enhance service delivery. Digital transformation isn’t just about technology—it’s about evolving processes and mindsets to stay competitive and future-proof IT operations.
6. Design for Resilience and Security: IT strategies must prioritize reliability, security, and compliance. Implement proactive risk management measures, including disaster recovery plans, cybersecurity frameworks, and compliance audits. Adopting a Zero Trust security model ensures that data and systems remain protected against evolving threats.
7. Keep the Customer Experience at the Center: End users—whether internal employees or external customers—should be at the heart of ITSM. Focus on delivering seamless, user-friendly IT services that enhance productivity and satisfaction. Implement IT service catalogs, self-service options, and AI-powered support solutions to reduce friction and improve response times.

What ‘The Phoenix Project’ taught us

The Phoenix Project is a book that talks about the ‘The Three Ways’ which are foundational pricing principles that provide a framework for understanding and implementing changes to improve IT operations and align them with business goals.

The First Way: Flow

The First Way emphasizes creating a seamless flow of work from development to operations to deliver value to the customer. The focus should be on identifying and removing bottlenecks, reducing delays, and optimizing the overall system.

Key practices include:

1. Visualizing work: Using tools like Kanban boards to track the flow of tasks.
2. Reducing Work in Progress (WIP): Limiting the amount of work being tackled at any time to ensure focus and efficiency.
3. Standardizing processes: Establishing repeatable and reliable workflows to minimize errors.
4. Automating routine tasks: Automating deployment and testing processes to speed up delivery and reduce human errors.

The Second Way: Feedback

The Second Way is about establishing and amplifying feedback loops to improve the quality of work and prevent issues from propagating downstream. Feedback ensures that errors are detected early and corrections are made promptly.

Key practices include:

1. Monitoring and alerts: Implementing robust monitoring systems to detect anomalies in real-time.
2. Proactive communication: Encouraging teams to communicate openly about issues and their solutions.
3. Iterative testing: Running tests at every stage of development to catch defects early.
4. Postmortems and reviews: Conducting blameless post-incident reviews to learn from failures and avoid repeating them.

The Third Way: Continuous learning and experimentation

The Third Way focuses on fostering a culture of innovation, resilience, and continuous improvement. It encourages experimentation, learning from failures, and striving for mastery.

Key practices include:

1. Encouraging experimentation: Allowing teams to try new approaches and embrace small, reversible failures as learning opportunities.
2. Cross-training teams: Building a versatile workforce by encouraging employees to develop multiple skill sets.
3. Automating learning: Leveraging tools to gather insights and metrics on performance and outcomes.
4. Rewarding improvement: Recognizing and rewarding teams and individuals who contribute to organizational learning and innovation.

Tips on how to communicate the value of IT

Again, IT is a cost center but it’s not just a cost center. How everyone perceives IT ties directly to how you communicate value through strategy and action.This perception can be influenced by a direct representation of IT’s implications for the business. IT is a force multiplier, but not a direct revenue generator. You can implement an application that works twice as fast resulting in twice the efficiency but there aren’t any direct dollars being generated from this.

Let’s take a very simple example of this – think of an office space with 50 employees and every one of them needs to make printouts times a day. There’s only 1 printer and each person has to wait for 5 minutes on average to get a print. 15 minutes for each employee is wasted every day, which is a total of 750 minutes for the whole office. Simply adding 1 more printer cuts that time in half to 325 minutes, saving 84,500 minutes or about 1400 hours a year. If the average employee takes home $100K in salary, an hour is worth $48. That’s $67,200 saved in a year, simply by adding a couple thousand-dollar printer. This printer is technically a cost for the company that doesn’t generate any ‘direct’ revenue, but it definitely accounts for the costs saved, therefore.

The point is – your CFO will probably appreciate this explanation much more than a presentation that highlights costs and not what that cost justifies. The idea is to communicate this value that isn’t inherently understood prior. When every IT cost is presented as an extension of the business’ goal, how it has helped not just accomplish but go beyond that goal, and the indirect costs saved, or revenue generated from said IT upgrades – C-suites will look at it differently.

After Instagram was acquired by Facebook, they were a small 13-person team that needed to scale operations to account for the explosive, unprecedented growth that followed. Instagram migrated from AWS to Facebook’s data center, allowing scaling by distributing the workload across multiple servers. They also migrated to multiple geographically distributed data centers to improve app availability for global users. Load balancing machines were implemented to balance user requests and avoid downtime. Instead of a single monolithic database, Instagram was switched to PostgreSQL and Cassandra for constant availability. In a lot of ways, Instagram’s growth was possible because of the infrastructure that was built around it. A system that doesn’t scale will never account for growth and therefore miss out on revenue generated from new users. This is the value of IT that isn’t necessarily apparent but needs to be communicated (and implemented) with the right strategies.

With all that being said, there are a lot of ways to skin the cat, and you have to figure out what resonates most with your leadership. Some leaders don’t really care about “reducing costs” and not about “saving money” i.e. they’re only worried about overall dollars in the budget and not what those dollars will translate to after being spent. Some expenses are necessary such as compliances certifications and operational licenses while expenses are more “good for the business” that can be hard to justify in front of your leadership. In fact, when speaking with CFOs, it might even be helpful to speak in terminologies that they understand like how much a tech upgrade can result in automating tax filing. Eventually it bottles down to your position in the company and the leaders’ perception of IT. Finding what resonates is a challenge you’ll have to figure out on your own.

Keep in mind a few other things

Perhaps the reason why you’re reading this is that you’ve recently joined the organization, and the sheer time needed to understand things deeply can be overwhelming. The first few weeks should just be observations to understand where things are and how things function. Talk to every other leader to see what the business expectations are from every department. With each interaction, you need to link it back to how IT fits in.

Even more so, don’t try to change things from the get-go and definitely don’t try to fix things that aren’t broken; if something is in a way you don’t understand, there’s probably a reason for it. The best path for you would be to understand how things have been done before and how you can streamline them into your own ways moving forward. Audit technical debts, analyze IT spend, and observe processes without changing them right away.

Your staff is your most valuable resource – spend most of your time having conversations with them, pay attention to their strengths and weaknesses, and discover opportunities for their career growth. If you can establish transparency with your team early on, you can enable them to have freedom of thought. Proper coordination and communication with the team is half the battle.

An IT strategy that is too rigid to fall apart before it can even be executed is not a progressive one. You will need to account for change more than anything else, especially now when every few years the technical landscape completely evolves and takes on a new shape. If your systems become outdated, there’s very little chance of supporting or aligning with the business goals. What’s more, the business goals themselves would’ve evolved over time and a strategy ought to be flexible enough to accommodate these changes without disruptions.

IT strategy is about the how, when, what, and where of ITSM. At the end of the day, how you choose to do things is up to you, but the end goal is to empower your IT team to be seen as a revenue center, not a cost center. This won’t likely happen unless business owners and stakeholders realize how indispensable IT is to the company’s growth. That’s only possible if you think, work, and execute on an IT strategy that’s undeniably excellent. An IT infrastructure that holds the entire company together is worth more than just respect, it’s worth a seat at the table.

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