What Is a Technology Strategy?

M. McGee
M. McGee
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Technology strategy is a business concept that may apply to two different ideas. First, a technology strategy involves the methods used to build and organize an information technology (IT) department, as well as make that department profitable. This form of strategy is commonly called information technology strategy to differentiate it from the second usage. The other form of strategy relates to how a business incorporates and develops new technologies in order to keep the business competitive. For example, a manufacturing company may look for new types of machines that require less maintenance or produce a higher-quality product.

Information technology strategy if often the project of a company’s chief information officer (CIO). The term refers both to the actions of the company and to an actual document that outlines the business's overall strategy. These plans are often comprehensive, covering everything from the manpower used in the various IT areas to the types of computers and programming required. These strategies give the framework the company uses to establish the technical aspect of the business in an organized and well-planned way.

In addition to the development strategies, the IT strategy will also have information for moving the department forward and making it profitable. The first part tries to plan out a schedule for software, hardware and infrastructure upgrades. Having these areas worked out in advance helps the business properly budget the large one-time costs that are common in the IT field.

Making a department profitable is one of the biggest hurdles of an information technology strategy. Since an IT department doesn’t produce anything, it is difficult to see the direct monetary benefit it provides. Generally, profitability is expressed through comparisons between one system and another, often on a department outside of IT. These comparisons will refer to direct benefits, such as using less electricity, or subjective benefits, such as a project requiring 10% less time due to increases in computing speed.

The second common usage of technology strategy applies to the business as a whole, rather than a single department. In this case, the business looks at its processes and methods and tries to find areas where it is lagging behind current technology. When areas are found that could be improved upon, it is necessary to look at the cost of upgrading to a better or more efficient system against the cost of staying with the current method. Even though the advanced methods often save money, they may cost more in the end due to the initial cost of machinery and training. The company’s overall technology strategy attempts to plan out when upgrades will result in the greatest profit.

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