In a recent discussion, someone asked the panel what Information Technology (IT) initiatives were strategic to businesses. The conversation quickly became focused on what it means to be “strategic.” The reality is, you can’t determine whether a specific Information Technology initiative is strategic unless you understand the company’s position and needs.
This led me to think about Maslow’s Hierarchy of Needs, the famous model that explains how humans prioritize survival and move towards self-actualization. I realized that a similar hierarchy could exist in Information Technology, which would help organizations determine their IT focus depending on their journey.
Level 1: Business Survival — The Foundation of Information Technology
Just as humans need basic necessities for survival, businesses need fundamental operating processes. At this level, the focus is on keeping the business alive, and often, manual processes are good enough. Information Technology at this stage isn’t about flashy new systems—it’s about basic functionality, even if it means using workarounds to get things done.
Example: A small retail business might rely on manual inventory management. This system works for now, but as the business grows, these manual processes will become a bottleneck. Skilled Information Technology architects can introduce solutions that ensure the company doesn’t just survive but starts to thrive.
Level 2: Safety and Stability in Information Technology
Once survival is ensured, businesses shift their focus to stability—ensuring that systems are reliable and data is secure. In Information Technology, this means introducing basic security measures and stabilizing the systems in place.
Example: Consider a company that manages customer data on a single server with minimal protection. At this stage, an IT architect might implement network security measures and backup solutions. This creates a stable environment where the business doesn’t have to worry about data breaches or system failures, enabling them to focus on growth.
Level 3: Systems Integration — Connecting the Dots
When the basics are covered, Information Technology efforts move to integrate systems. Separate systems are great for solving individual problems, but they can cause a lot of redundant work if they aren’t connected. At this level, IT architects help businesses move data smoothly between different systems, ensuring accuracy and consistency.
Story: The retail company I worked with had separate systems for tracking shipments and managing customer orders. This disconnection caused delays and errors. Integrating these systems allowed real-time updates, which not only improved efficiency but also enhanced customer satisfaction.
Level 4: Simplification and Standardization — Streamlining Information Technology
After integrating systems, businesses recognize that complexity creates unnecessary confusion. Inconsistent user interfaces and multiple technology platforms make life difficult. At this stage, Information Technology architects focus on simplifying processes and standardizing platforms across the company.
Example: A financial services firm had too many systems that did the same thing—each department used different software to achieve similar outcomes. An IT architect standardized these systems, reducing redundancy and cutting down the learning curve for employees.
Level 5: Business Effectiveness through Information Technology
Once the systems are integrated and standardized, businesses can leverage Information Technology to drive effectiveness and efficiency. This is where IT shifts from being a support function to a driver of innovation, using technology to directly improve business performance.
Story: The retail company I consulted for used Information Technology at this level to optimize their supply chain. Through predictive analytics and automated ordering, they cut costs and improved delivery times, which gave them a competitive edge in the market.
Do Businesses Follow the Information Technology Hierarchy Linearly?
While businesses often progress from Level 1 to Level 5, it’s not always a linear journey. Sometimes, a company might jump between levels as needs arise. For example, a company focused on integration (Level 3) might realize they never adequately addressed security (Level 2). In this case, they need to backtrack and resolve foundational issues before continuing.
Multiple Information Technology Hierarchies in Large Companies
In larger organizations, different departments or divisions may be at different levels of the Information Technology hierarchy. One division might still be working on stabilizing their systems (Level 2), while another might be focused on simplifying and standardizing their platforms (Level 4). It’s important for an IT architect to recognize these differences and address each division’s unique needs while also keeping the company’s overall goals in mind.
Example: In a global organization, the U.S. branch might have fully integrated systems, while the European branch is still relying on disparate, outdated platforms. The Information Technology strategy must be flexible enough to support these differences while pushing the entire organization towards common standards.
Conclusion: Strategic Information Technology Focus
The term “strategic” is frequently used in Information Technology discussions, but its meaning can vary greatly depending on where a business is in its journey. What’s strategic for one company might be operational for another, depending on its position within the hierarchy. The key to success is understanding where your business sits in this hierarchy and focusing on the right level of IT to drive growth and success.
By following the hierarchy of Business Information Technology Needs, organizations can better align their IT initiatives with their business goals, ensuring that their investments in technology truly support long-term success.