What’s the Difference Between Digital Strategy and IT Strategy

Knowing the difference is a crucial first step on your digital transformation journey

In EX Squared’s third decade of helping companies digitally transform, it’s clear that many organizations still confuse digital strategy and IT strategy. There are important differences and distinctions between them which are important to learn as your company navigates the journey to becoming a fully-fledged digital business.

“Plans are worthless, but planning is everything.”

Dwight Eisenhower, 1957

Defining Strategy in General

Let’s begin with what strategy isn’t: it isn’t science.

A strategy is art, a big picture canvas comprised of analysis, thought, conclusion, communication and optimism. As Eisenhower noted, the best strategies are inherently adaptable rather than dogmatic, rejecting any expectations of “foolproof” outcomes. When finished, a good strategy will help focus the nitty gritty work of making tactical decisions and being more precise when answering questions about who, what, where, when, how and how much.

Every organization needs both a digital strategy and IT strategy. Though related, they are not the same thing.

What Is Digital Strategy?

Digital strategy is about using technology to transform operations and the overall business. It’s the strategic answer to the question “How is our company going to survive and thrive in our increasingly digital world?”

Whether reimagining current processes or creating new products and services, the focus is on customers and improving their soup-to-nuts experience with your brand. It begins with the activities and processes options that you can transform to improve service delivery to customers, then considers the technology options to implement the strategy and benefit from your new competitive advantages.

In an increasingly customer-centric world where information is widely and instantly available and competitors are only too eager to insert themselves and their alternatives into the customer’s buying journey, creating a digital strategy is a preliminary necessity of any digital transformation endeavor. It helps organizations create competitive advantage from the possibilities offered by new technologies and tactically exploit them. New and improved business models are the most obvious result as companies are able to deliver what wasn’t previously possible.

Digital strategy helps a company understand how to deploy technology en route to becoming a digital business. It requires the attention of the C-suite’s attention so that the technology choices can be appropriately implemented to support the new operational processes, customer touch-points, business models and objectives.

What Is It Strategy?

If digital strategy is about using technology to transform your business operations, IT strategy focuses on supporting the current roadmap as an answer to the “Where should the IT budget be invested?” and ““How can IT help the company win?” questions. Based on the company’s current direction, it doesn’t consider what the company should do to ensure it’s alive a decade from now. Instead, its purpose is to help the CTO understand today where she should make IT investments to best support the current business strategy.

IT strategies will typically spell out how to raise performance, improve KPIs and ROI and maximize business value using the fewest possible resources. These technology choices will support the business strategy and drive the company forward. IT strategy should be able to both meet today’s demands and better prepare organizations for tomorrow’s challenges as well. Which is vital because digital—as every human knows—is massively disruptive to incumbents.

Which Is More Important?

While the digital strategy should drive IT transformation, both strategy planning exercise and resultant documents are important to ensure that your business models remain economically viable.

So, where do you start? Let EX Squared guide the way as you take the first steps on your digital transformation journey.