The Difference Between IT at a FTSE 100 Business and at Your SME? Strategy.

One of the things that I find most curious about how businesses buy IT is that there is a lot of difference between how big companies buy IT and how small companies buy IT, but not a lot of reasons as to why. Scale matters, but functionality does not. There are two truisms in particular that stand out.

The first one is that almost every business over a certain size has access to some specialist IT function – either done in-house by an IT team, or outsourced to an external IT partner. Almost every small/micro business starts off with no specialist IT function (unless the founder’s spouse is an IT nerd), yet there must be some common “Rubicon” that gets crossed that turns the business from a non-customer specialist IT support to a customer of specialist IT support. However, there is no identifiable point at which this happens – at some point the business will become so large and complex that it needs to access this specialisation, and then it does so.

The second one is that large businesses approach their IT in a way that smaller businesses do not – large businesses look at their IT as a strategic tool that can be used in transformative ways within their business. Smaller businesses tend to look at IT as very “nuts and bolts” – usually IT capability is limited to considering IT as a communication tool (email and a website), a way of storing files, and a way of accessing software. At some point in any business’ maturation, IT goes from being “nuts and bolts” to “strategic and transformative” – i.e. there is another Rubicon. Virtually no small business has a CTO (or IT Director), but virtually every large business does – this individual will come into the business to implement this transformation; their job is to implement strategy.

The point though is that there is no reason why you have to wait until the business finds itself crossing either of these Rubicons – there are advantages to electing to cross these points early and “levelling up” your IT capability ahead of time, compared to your competitors, particularly around strategy.

To help me write this article, I looked online for a list of overused business buzzwords – after all, if we’re talking about “transformative strategy enablement” we’re firmly into buzzwords territory. I could talk about using IT to “power growth”, or “drive profits”, or “empower employees”, or “delivering quick wins”. However, whilst buzzwords can be used to obfuscate and bamboozle, buzzwords are always a way to think about the health of the business. They work because they create as shared language to allow the whole organisation, or teams within the organisation, to rally round and implement change for the sake of health. Health itself can be further distilled into optimisation — aka “what do we want to do of, and what do we want less of?”

What you want to do more of, and what you want to do less of, will depend on your business and your objectives, but my bet would be that whatever you wanted to do – whatever buzzwords you wanted to chase – there is some role to play via some clever IT strategy. Having worked in IT for 26 years, my perspective is likely to be biased about how magical IT can be, but at its core IT – information technology – is a toolkit for innovation. Its purpose is to allow people to come up with new ways of doing things. It allows for mechanisation of logical processes in the same way that the Spinning Jenny started to teach us about the power of mechanising physical processes. IT is virtual machinery, and that’s what makes it so powerful.

Within the business, the very idea of “transformation” by definition is about finding new ways of doing things. And we have IT as a toolbox for innovation. The trick then is to start thinking like a larger business and when we’re looking at something in the business that doesn’t work, or when we’re looking at something in the business that does work, but could work a bit better, the difference between a smaller business and larger business comes down to mindset. The management of larger business simply knows that IT likely has a role in the solution because it is a) they have seen what IT can do in this regard time and time again, and b) has specialist, in-house resource in the shape of a CTO or IT director that is telling constantly reminding them what IT can do. The management of the smaller business hasn’t quite got there yet.

But there’s no reason why you can’t be there now. You don’t need a CTO or an IT director to do this, you just have to remember as the owner of the business that IT likely has a role, you just have to investigate what, and how.

By Matthew Reynolds