Information technology does not exist in a silo.
In any organization, CIOs need to understand how their IT decisions support the CEO’s business goals and vision. This IT-business alignment is essential to help solve organizational challenges.
The type of IT culture in your organization determines the role of IT and the investments for which it will be more or less difficult to make a business case. No single technology culture is the best. Each industry has its own unique environment that has different views on the position of technology in the business value chain. IT managers who understand their company culture are better able to get the most out of their IT resources.
IT culture defined, the 4 cultures explained
A information technology culture is a company’s attitude towards investing in technology and business technology as a strategic business differentiator. In this regard, computer culture generally falls into four basic categories: conservative, moderate, aggressive, and avant-garde/forward-thinking.
1. Conservative computer cultures
In a conservative IT culture, senior leaders view technology as an expense to be minimized. In turn, their IT departments maximize the use of the technology they have, making the most of technology investments.
These types of companies abandon operating systems only when vendors no longer support those systems and IT cannot create viable in-house patches to keep those systems running. Organizations with conservative computer cultures have employees who use laptops and desktops for six to 10 years and only replace them when they fail. Conservative companies don’t see technology as something that gives them a competitive advantage, but something they want to reduce the cost of.
2. Moderate Computer Cultures
Organizations with moderate IT cultures prioritize cost management, but will occasionally invest in new technology. However, when they do, it is with an eye on cost containment rather than seeking strategic advantage.
For example, companies with moderate cultures will invest in automation if it directly reduces costs. If there is a return on investment in less than a year, they can make the investment.
3. Aggressive Computer Cultures
Aggressive IT cultures categorize technology spending as essential to moving the business forward. Business owners and IT managers are actively looking for technology to give them an edge over their competitors. They see how spending in one area can reduce costs in another.
For example, they think adding automation frees people up from low-value work so they can focus on high-value work. Although they are open to developing technologies, the leaders of these organizations will not buy such technologies based on hype or exploration. Instead, leaders will explore technology that provides business advantage.
4. Cutting-Edge or Cutting-Edge Computer Cultures
Cutting-edge or cutting-edge computing cultures always view technology spending as an investment. Business and IT leaders in these cultures view technology as a business driver, essential to establishing and maintaining their market leadership. They are less concerned with process and cost, knowing they will figure out how to become more efficient over time.
This does not mean investing in technology for the sake of investing. Instead, leaders see investment in technology as a driver to create a new market, add unique competitive differentiation, and facilitate the transformation of people, processes, and products. Technology for technology’s sake rarely produces fundamental business change. Rather, the desire for business change uses technology as a channel to enable that change to happen. In this way, leading companies will necessarily align with business, as a transformational change agent.
A cultural vision of technology deployment
Each of these cultures has different approaches to deploying technology.
- Leaders in conservative computer cultures focus on creating business efficiencies by creating and improving repeatable processes. This attitude avoids change because it disrupts processes.
- Leaders in moderate IT cultures are concerned about efficiency and cost, but they can approve of using technology that saves money.
- Leaders in progressive computer cultures deploy the technology for strategic advantage, but must have a clear return on investment before moving forward.
- Leaders in cutting-edge, cutting-edge computer cultures trust their instincts that the new technology is good. They envision new markets and industries where they can deploy new technologies. If there’s a new market to tap into, they don’t need to iron out all the details. They see the advantage of being a first mover. They know there will be trial and error; they are ready to accept that.
A vision of technological culture by industry
To some extent, different types of IT cultures are associated with industries combined with company size.
Conservative IT culture. Industries that are very cost sensitive with low profit margins tend to be conservative. Retail businesses tend to be that way, especially small businesses. Retail establishments tend to keep their equipment until they can no longer use it and may have regular phone service, as opposed to IP phones. Some manufacturing companies have slim margins and only spend on technology when needed. Hospitals tend to be conservative when it comes to technology investment – especially computer technology – as well as smaller transport and logistics companies.
Moderate computer culture. Law firms tend to be moderate in their view of technology. Although they have better profit margins, they generally view technology as a cost to be avoided, as opposed to something that enables new capabilities. This is true for many service companies, where the service itself is not technology-centric.
Aggressive computer culture. Industries that tend to be aggressive in their technology investments include pharmaceutical companies. They see great benefit in technology, but must also adhere to regulatory frameworks, leading to strong justifications for technology investments and well-thought-out use cases.
State-of-the-art or state-of-the-art computer literacy. Leading companies view technology as essential to business. Investment banking is an industry. They have high profit margins and will adopt new technologies and algorithms to gain an analytical edge over the competition. Oil and gas exploration companies are also investing heavily in new technologies, looking for new ways to identify the next energy source, as well as new extraction techniques. Because of the need for innovation, IT typically has a lot of latitude to support business goals, which includes the capital to support that innovation.
Examples of business cases in different IT cultures
Understanding your company culture can help you understand which technologies the CEO is most likely to endorse and how to make a good business case for a particular technology. Here are some examples.
Conservative IT culture. For conservative companies, business cases focus on cost avoidance, then cost savings. A typical conservative business case is upgrading to a new operating system (OS) because the vendor doesn’t support the old OS. A conservative company upgrades these systems when they have no choice.
Moderate computer culture. Moderately cultured companies may choose to outsource servers to a managed colocation service. They can’t afford the staff to design and build new server systems as they grow, and their building doesn’t have redundant power. They see colocation as a cheaper alternative to building their own redundant power supply. In this case, investing in data center colocation is cheaper than building their own dedicated facility.
Aggressive computer culture. The aggressive business sees a clear business advantage in the application of technology. Managed services companies will justify adding event correlation tools and advanced security analytics, which allow them to manage more customers without adding staff.
State-of-the-art or state-of-the-art computer literacy. Cutting-edge financial services companies will spend millions on new computers and computer algorithms to find ways to identify fraud faster and perform financial analysis to optimize investment portfolios.