The right IT strategy is critical to business success.
The consumerization of IT — the trend toward employee adoption of technology solutions outside the aegis of the IT department — has had a major impact on technology procurement. Today’s technology-savvy end-users feel empowered to choose and implement the IT tools they need, from cloud solutions to collaboration tools to business applications.
This would seem to relieve IT of the burden of researching and provisioning technology solutions, while enabling employees to get the tools they need more quickly and at lower cost. Consumerization often leaves the organization with a new set of problems, however: poor integration, inadequate security, support challenges, unnecessary costs and more.
Those issues can be summed up as a lack of an overarching strategy. Small to midsize businesses (SMBs) in particular tend to react to changing IT requirements rather than developing a one-, two- and five-year technology plan. The fact that individual users are now obtaining IT solutions on their own only compounds the problem.
This is unfortunate, because the right IT strategy is critical to business success. SMBs need to develop a clear picture of where the organization is headed and what technology tools will be needed to support those business objectives. Without a technology plan, SMBs often wind up dedicating significant budget to keeping the status quo while missing out on solutions that can boost the bottom line.
“The technology plan doesn’t have to be rigid — on the contrary, it should recognize that technology is constantly changing and so is the business,” said Krystal Triumph, IT & Telecom Advisor, Atlantic-IT.net. “The plan should emphasize regular evaluation of your existing technology in order to identify any operational bottlenecks, reliability issues or other shortcomings.”
Employees are a good source of information about inefficient processes and workarounds that impede productivity. Armed with their input, management can make more-informed decisions about technology investments and avoid unexpected and potentially costly upgrades.
This analysis provides only the internal perspective, however. The decision-making process requires a thorough understanding of the latest IT solutions and their application to specific business requirements. It also requires the ability to separate technology hype from reality, as well as a vision of what the future holds.
“That’s why the involvement of an experienced technology provider can be invaluable,” Triumph said. “Someone who has their finger on the pulse of the IT industry can help you determine whether you should refresh your existing environment or move to a different platform. What products are considered best-of-breed? What are the tradeoffs in terms of purchase price versus ongoing maintenance and management costs? Are there any cloud solutions that could help improve flexibility, reliability and availability?”
The next task is to properly balance capital and operational expenses. From an IT perspective, capital expenses typically involve investments in on-premises technology expected to last more than one year. This involves procurement, installation and configuration, whether these steps are handled by in-house staff or an outside vendor.
However, with most capital expenses for IT, it’s important to consider the operational costs as these assets must be maintained, upgraded, powered and cooled. An increase in capital expenses usually brings an increase in operational costs because new hardware and software must be managed and supported. That’s why many organizations are increasing their use of cloud-based services.
“The cloud shifts both operational expenses and capital costs to the service provider, leaving you with one monthly payment to worry about,” Triumph said. “It can be a very attractive model from a budgetary perspective.”
In-House or Outsourced?
Cost should not be the only factor when determining which technologies and applications should be kept in-house and which should be moved to the cloud, however. Organizations need to analyze which model will best support their business goals and processes.
“In other words, it’s rarely a good idea to move everything to the cloud. Many organizations utilize a hybrid approach, keeping certain applications and data on-premises while others are moved to the cloud,” said Triumph. “Outsourced IT services and support help relieve the burden of maintenance and management of on-premises solutions through an easily budgeted operational expense.”
According to Info Tech Research Group, one-third of an organization’s expenditures should go to capital expenses, while the remaining two-thirds are used for operational expenses. This can and should be adjusted according to business needs, but it provides a good starting point for planning the IT strategy and budget.
“Operational expenses are often tax deductible, while capital expenses must be depreciated,” Triumph said. “Operational expenses tend to be more advantageous from a tax standpoint, although we recommend consulting a tax advisor to discuss your specific situation.”
The organization with the most toys does not win, at least when it comes to IT. The return on the technology investment hinges upon upfront planning and a solid IT strategy. More important than hardware and software is having reliable, around-the-clock access to the latest tools and services finely tuned to business needs and goals.
A knowledgeable technology provider is a strategic ally throughout the budgeting and planning process. The right partner can provide the expertise and experience needed to make sound IT decisions and ensure that the entire IT environment is working together to achieve business goals.