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A strategic approach to IT investment

By May 13, 2019August 20th, 2019Articles
A strategic approach to IT investment

In my last article, ‘Is outsourcing your IT really cost-effective?’ I explored a variety of benefits to outsourcing – the primary one being cost-saving.

It often surprises me how the default thinking for IT expenditure is ‘cost’, when I see it as ‘investment’.

Think budgets
For most businesses, IT sits on a line on their profit and loss account – it’s a cost and that’s how it’s thought of. I would challenge you to take the ‘cost’ element away for a second and consider the ‘benefit’ viewpoint.

Think benefits
Let’s recap what IT does for us. In a business context, a well-run system allows us to:

  1. Communicate efficiently and effectively.
  2. Connect our teams across departments and supply chains across continents.
  3. Access files, documents and resources that we need to do our jobs – all in an instant.
  4. Monitor mission-critical systems, in real time, and provide live feedback.
  5. Analyse data to better understand the performance of our business across every department.

What else does IT do for you and your business?

Think value
Whilst we’re still in ‘benefit mode’ – what value would you put on your IT system? At a guess, I would say ‘quite high’. After all, most businesses need at least a basic level of service just to operate.

Think action, not reaction
With this in mind, why is it so many businesses have a simple ‘reactive’ plan to maintaining their IT systems? In all reactive situations there’s a trigger, a consideration and a reaction. That could be as simple as something breaks and it gets fixed. Or, in a more complex scenario, a new piece of software is requested and, if the money is available and the right people reason for its implementation, then it’s purchased and deployed.

So, what’s the alternative and why the need to change?

A proactive approach completely turns this on its head. How would you feel if I told you:

  • System breakdowns could be eradicated completely (well, almost, work with me on this – nothing’s perfect!).
  • You could be ahead of your competition in adopting new technology to streamline your operations.
  • Your system would be secure, and you can sleep at night.

You’d feel pretty good, right?

Well, this is only possible with planning.

Think plan, not purse strings
Now, you’re probably thinking I’m about to tell you there’s a price attached to all this wonderful news, and you’re right. But it’s not as large as you think. In fact, I wouldn’t be surprised if it’s a lot less than you imagine.

When most IT expenditure occurs, the finance team will check against a budget to determine if the money is available. The budget is typically created based on figures from last year’s accounts and has very little consideration given to the potential requirements for the year ahead. 

If that sounds familiar, chances are the person holding the purse strings has said ‘no’ at some point. Systems that could have helped you move your business forward were parked until funds were available, right? It doesn’t have to be that way.

Think managed, not magpie
When something considered ‘critical’ by one is dismissed as ‘unnecessary’ or ‘over budget’ by another, it’s typically happening in real time. This adds pressure. How can you provide sound reasoning and gain buy-in for change, when you already know you’re restricted by a spreadsheet that was created six months ago by a team looking at historic data? Frustrating, right?

Then there’s the allure of shiny new objects! So much of IT is dismissed as, ‘Oh, you just want the latest,’ and in some cases it’s true. Taking some time to reflect really helps avoid impulse purchases, which ultimately diminish your chances of investing in the best possible way for your business.

Think forward
A true strategic approach plans expenditure long in advance. It looks at the business needs, projections for the future and makes allowances for changing technology. It gives you time to deliberate your options, in a considered way, involving all stakeholders. You see, when you take the time pressure away, decisions become easier. Stakeholders are calm, as you’re not reacting to ‘a situation’ but planning what you’re going to make happen in the future.

At KCS, we help our clients plan their IT investment for the long term. That means three-, five- and sometimes ten-year plans, if appropriate for the business. We can show you how we’ve saved customers money in the long term by building the system they need, eliminating waste and reducing the need for reactive maintenance.

Is this something you need in your business? Call us today to learn more.