The IT of SG&A
August 29, 2008
Lauren J. Kelley at Sandhill.com has a article regarding reducing G&A expenses. The article was written regarding the mid-sized business in the software development space, however it applies everywhere.
Companies that swing between high G&A spending (often the result of a “problem”) and then major cuts in expenses often have trouble meeting profitability targets
The “boom and bust” concept from Lauren’s article is all to common in the SMB/SME and mid market. And where there is that type of boom and bust spending, I can tell you from experience that there is money being wasted on the IT side.
Even if you do drive some revenue from your business technology investments, I guarantee that there is waste that should be removed.
It goes like this;
Don’t spend a nickel until it breaks then panic & pay too much in money and time to fix the problem.
The IT Staff
Check your ego at the door. Trying to do the superman and fix every failure throughout 48 hour marathons is waste.
Your IT plan should have steady state incremental spending that is forecast over at least three years.
The Business Staff
A planned and conistent steady state investment in the IT lifecycle reduces risk, increases the accuracy of your financial planning and forecasting, and reduces the knee jerk smash to your G&A expenses.