4 types of IT cultures: which one is yours?

IT doesn’t exist in a vacuum. The CIO in any organisation needs to understand how their IT decisions support the CEO’s vision and goals. That alignment between IT and the business as a whole is crucial.

What is IT culture?

An IT culture is an organisation’s attitude to investing in technology and business technology as a strategic business differentiator. There are four basic types: conservative, moderate, aggressive and leading edge/bleeding edge.

The type of IT culture in your organisation determines the role IT will play, and the investments that will be easy or difficult to make a business case for. These four cultures aren’t better or worse than each other, they’re just different, and it pays to understand the differences.

The four cultures

1. Conservative IT cultures

Top leaders in a conservative IT culture see technology as an expense, not a means to gain a competitive advantage. They aim to minimise spending on technology and have IT departments get the maximum use out of it. They have employees use 10-year-old computers until they break, and move off operating systems only when the vendor has stopped supporting them.

This makes perfect sense in industries that are very cost-sensitive with slim profit margins, like manufacturing, hospitals, and small retailers.

2. Moderate IT cultures

Moderate IT cultures still make cost management a priority, but do occasionally invest in new technology, with a view to saving money more than seeking strategic advantage. For example, they’ll invest in automation if it directly helps them cut costs. They prefer technologies that deliver an ROI in under a year. Law firms tend to have a moderate IT culture.

3. Aggressive IT cultures

Aggressive IT cultures see investing in technology as key to moving the company forward, actively look for technologies that will give them a competitive advantage, and don’t mind spending in one domain to reduce costs in another. For example, they see automation as freeing people’s time from low-value work so they can focus on doing high-value work.

They are open to developing technologies, but won’t invest based on hype or exploration. They want technologies that deliver a business advantage. Pharma companies tend to have this culture: they see great advantages in technology, but need to follow strict regulations.

4. Leading-edge or bleeding-edge IT cultures

Leaders in these cultures always see technology spending as an investment, a business driver, and essential to market leadership. They’re less concerned about process and cost, figuring that they can learn from mistakes and become more efficient over time.

These are industries with high profit margins, like oil and gas or investment banking. They don’t invest in technology for the sake of it, but as a driver for fundamental business change. This means IT in leading-edge companies will align with business and be seen as a transformational change agent.

Business case examples in different IT cultures

Understanding the culture of your company can help you understand which technologies the CEO is most likely to approve and how to make a good business case for a particular technology. Here are a few 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 it doesn't have a choice.

Moderate IT culture. Moderate culture companies may choose to outsource servers to a managed colocation service. They cannot 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 less expensive alternative to building their own redundant power. In this case, investing in data center colocation is cheaper than building their own dedicated facility.

Aggressive IT culture. The aggressive company sees clear business advantage in applying technology. Managed service companies will justify adding event correlation and advanced security analysis tools, which allow them to handle more customers without adding staff.

Leading-edge or bleeding-edge IT culture. Leading edge financial service companies will spend millions on new computers and computing algorithms to find ways to identify fraud more quickly and for financial analysis to optimize investment portfolios.