“We don’t have an IT plan”, said too many business people when I’ve asked what exciting things are on the IT plan for the year.
According to a 2013 Gartner Survey, companies spend an average of 3.3% of their total revenue on I.T. A small business with 2 million in revenue spends $66,000 per year on IT. Given this is an average, half spend more than this.
It’s tough to manage every penny spent in a business, but when we’re talking about a similar investment as a skilled employee, it deserves deliberate attention. Also, investment in tech is often made in large batches. Every 3 to 5 years when companies refresh their technology, these decisions are of an even larger scale.
Too often, minimal thought goes into how a business should invest in technology. It only becomes painfully obvious a change is needed when there is a major problem – like a computer is smoking. This reactive approach is costly.
For example, perhaps requirements are not fully considered for anticipated growth in the future. The right server investment for 20 people in one office today is probably not the right server for 30 people spread across two offices, two years from now. The lifespan of the investment can be cut in half.
The right approach also mean avoiding over-investing. I’ve talked to many organizations who have a reactive approach (not Smart Dolphins customers!). Some have more than one backup system because the first one wasn’t adequate or there is a lack of confidence – the result is wasted investment and unnecessary complexity. Or, perhaps, to play it safe, a server is double the specifications (and triple the cost) of what is needed. With a bit more understanding and forethought, something more moderate could have been purchased and provided the same benefit.
The bigger issue with poor technology planning is the massive impact this can have on the operations of the business over the life of the investment. Investing in software that isn’t the right fit could cost a business thousands of hours of lost productivity. The opportunity cost of missing functionality can also be enormous.
These are just simple examples. The point is pre-planning technology investments, proactively, on a regular basis, with a comprehensive view of the business can save a lot of money. This optimization also prolongs the life of the investment by many years and magnifying the benefits during its useful life.
IT Planning is easier said than done. Assessing organizational IT requirements takes time and the right, methodical approach. It’s more than a short conversation over a boardroom table a few months before the “roll out”. It may come as no surprise that I’m here to also tell you that Smart Dolphins happens to be pretty darn good at this planning stuff.