October 7, 2010
A nice article titled; The electronic health record meets the iPad from IT World Canada.
The articles demonstrates how Mr. Dale Potter, chief information officer at the Ottawa Hospital improved IT services at the hospital exponentially.
There is one key quotation that I want to point out regarding Mr. Potter’s work;
….. asked physicians how much of the information they needed in their work was available …
Look at the very first word in that quotation.
How often does your IT Leadership actually do that? Or do they try to be prescriptive without asking those questions first?
The SMB Takeaway
Ask questions and then truly listen. Only then can you begin thinking of solutions or alternatives. It won’t always be easy.
Photo Credit Leo Reynolds via flickr
October 5, 2010
I met a consultant a few days ago that provides SME organizations with implementation assistance in the CRM (customer Relationship Management) space.
In his career, he saw the writing on the wall and had migrated his skills from dealing solely with on premises software (where you shell out money for servers, software licenses and then try to glue it all together in your office) to tools supplied as a SaaS, or hosted model.
In our talk he made a comment that I found all too indicative of many IT organizations in the small to medium enterprise. I can’t remember the exact words, so I am paraphrasing a bit here;
.. in larger SME businesses, the most resistance to the SaaS model is their IT departments, it is as if the IT folks need to be able to hug a server..
That is – unfortunately sad….
Because when any part of your business starts thinking in silos, it leads a business to operate in silos too. That goes for your IT Leadership as well.
In the Small to Medium Enterprise, your IT Leadership must be thinking beyond hugging servers. Beyond the silo of what they prefer, or what they like.
As Philip Papadopoulos of the Papadopoulos Group mentioned to me on twitter;
IT should always be pro-active, approach the business with ways to solve their problems meet their goals
Strategy, Goals & IT
If your IT Leadership feel that unless they are hugging a server they are really not doing their job, then there is some internal IT change that needs to be taking place.
Your business technology must support your organizational strategies and your business goals. And that can include the tactical decisions you make to support those goals.
Mark McDonald at Gartner writes; (emphasis mine)
The strategist has a point in that new technologies and service models are changing the foundation and underpinnings for IT. The move from IT functions, to solutions and now to services reflects a major change in the way IT works that will require CIOs and leaders to prepare.
The SMB Takeaway
In some cases ‘hugging a server’ may be the recommended solution for a business requirement. But for your technology team to refuse to look at the way technology is changing, and to refuse to look at the ways that this changing technology will impact costs or growth, then they are not doing their job.
Simply but, there is no right answer for every business or situation. But you won’t ever get a right answer in your business technology if you aren’t even asking the questions.
September 27, 2010
I was honored to be interviewed by Dave Webb for ComputerWorld Canada in this piece titled; IT doesn’t handle aging well (registration required)
The interview covered my dislike for how the technology field tends to throw out skills and buy new ones, rather than educate or train;
“We do have a bad reputation (in IT) as body shops, looking for two years’ experience in a six-month-old technology,”
And from a second interviewee, Lori Keith;
“without exception, classmates from the IT field were there on their own nickel”
Other industries don’t do this – why IT?
August 30, 2010
Do you know if there is any value at all coming from your technology investment?
Unfortunately for many SME’s, they don’t know. One reason for this disconnect is that we can have very little understanding on when money spent on IT is an investment, or well, just an expense.
One way to improve your value for price in technology is to look at where that money is being spent. And for many small to medium business, the primary two buckets your IT spending will fall into is supporting your direct activities or to increase their effectiveness. (note that more strategic use of IT for driving growth is beyond the scope of this post)
Process, IT Cost And Value
I want to demonstrate that taking a more holistic look at the way you do business can improve IT spending by ensuring that your IT spend is is being applied to those two buckets.
When there is work being performed, and that work is performed more than once, you can be sure that you are looking at a process. It may not be articulated, or formalized as a process – but it is a process.
As a SME business owner or executive, if you were to write down each step, and each event that happens when a new or existing customer calls looking for your product or service – what would that chain of events look like?
Many of us will make a mistake here!
We have the tendency to say; ‘Well sales gives that information to person ‘X’ who gets it out the door…’
I guarantee you – in most cases, you would be wrong.
I state wrong, because that statement is a generality, nice to say, but usually not the exact steps being performed.
If you look closer at what actually happens, it may look more like this;
a) phone call / email is received – maybe written down on a message slip?
b) if it is an existing customer, perhaps terms or conditions are looked up?
c) if a new customer – perhaps you collect information? even just in email?
d) is a message slip handed over to someone else to look at inventory or availability?
e) perhaps forward that message slip or email to someone else who can schedule or ship?
You get the idea. It is very, very rare that what you think happens in a particular situation is actually what is really happening.
Note: For a real example of a ‘process’ in action read this post titled; Don’t Automate Broken Processes
Once you have taken some time and drawn out each of these tasks and steps, you can begin to see where your technology investments can be made to support your direct activities.
In this case, any IT tools that can reduce manual steps and work in this process can be considered as directly supporting your activities.
To take a step further, look at how long each of the tasks you identified in the previous step take.
Did you find one area where the majority of time is wasted before your product or service can actually be delivered to your customer?
Real World Example
A company I am familiar with is using an on-line sales force tool to track their sales funnel. In your sales funnel, I know that there are some critical numbers needed to gauge your success. Simple examples could include gross margins, cost of sales etc.
The automation tool that this organization was using had some sophisticated advanced metrics reporting, but as a higher cost option.
Because they wished to avoid paying for this reporting option?
From the president to the sales director, five senior people spend hours per month collating the data required for those metrics!
Looking at the time being wasted in their processes has shown them that getting the additional automated reports is more than worth the cost, in other words, to increase the effectiveness of their process.
The SMB Takeaway
Is a tech spend proposal supporting either of those buckets?
If not – why are you spending it?
August 17, 2010
A truly excellent piece by Patty Azzarello titled; Uncertainty is Expensive
Every unanswered strategic question leaves legions of people in your organization, less productive and more expensive than they would be with clear direction.
And I have to agree with that statement.
Nature, business & IT abhor a vacuum
When people have no specific instructions or direction, what happens?
More aggressive managers start to push their own – often conflicting agenda’s.
Disconnected and competing silo’s start being built.
And IT costs?
They can grow by staggering amounts as managers with clout want duplicate IT infrastructure, software or tools that they believe is best for them. Not what is necessarily best for the organization.
Along with these duplicate or unnecessary expenses, some IT investments can be made that may run counter to your strategic direction.
I have witnessed enterprise class software purchased, installed and training being performed – then canceled for a competitive product due to lack of communication and decision on strategic direction.
I have witnessed the most insignificant and minor issues take days or weeks to resolve because the silo’s built by those managers with clout refuse to talk to each other, or provide clear direction on strategies and goals for their parts of the organization.
The SMB Takeaway
Ms. Azzarello says it perfectly; Uncertainty is expensive
Eliminate uncertainty. Ensure that clear direction is available for everyone in the organization, and lastly – make sure that you have the governance and management processes to ensure that decisions meet these goals.
Photo Credit Eirikref via flickr
August 13, 2010
Yes it is Friday the 13th – and my wife broke a large mirror today – so if you are superstitious, stay home in bed!
Forbes has a good interview with both the CIO and CFO of an organization titled; The Perfect IT Department
In a larger context the article discusses several of the business / IT issues I have written about here for SME business managers. I want to pull out one really good quote;
Because when I look at the maturity of an IT organization it’s not about infrastructure. It’s not about apps. It’s really about information
The SMB Takeaway
Technology by itself should be last on your agenda.
Photo Credit norrix via flickr
June 4, 2010
This is the second post in this series for getting a handle on IT spending by doing a complete zero based IT budget. Again, the target for this post is CFO’s (or other SME executives) managing IT where they have lost visibility of IT spend, and also IT staff just promoted to that first IT Manager position.
In the first post, I started off with many of the details you need to collect that will allow you to determine what you actually spent (both CAPEX and OPEX) last year. (If you are newly promoted IT staff, yes there is a reason why we want to start in the past!)
This second post will finish off the details needed to get a reasonably accurate description of your actual IT spend for the previous fiscal year.
So, in addition to the details you collected from part 1, document and include the following;
- IT salaries, fully loaded. If you are a new IT Manager and don’t have the exact salaries and load rates, get a fully loaded summary from your finance team.
- Telecommunications. Your business may choose not to include telecommunications costs under the IT umbrella, but I will recommend that most SME’s should consider it. Simply because most SME’s don’t have dedicated telecom charts of accounts either.
Now, with the details you have been collecting from the previous post, plus these new ones, ensure that there is a breakdown of these costs. A cost basket of Services is unacceptable. A heading of Services with a breakdown of what is the level of detail that we are looking for.
At this point you will have a spreadsheet breaking down;
- Recurring fees (hardware, software or services)
- Non-recurring fees (hardware, software etc)
- Consulting / services / support / training
- Hardware / Parts
If you are a CFO responsible for IT, like many SME executives, you will now be going good god!!! We spend WHAT!!!??
You will also have shortness of breath, dizziness, and an increasing sense of panic. Clear signs of a coronary.
My recommendation is that you hit the gym for an hour, or have a few stiff drinks at lunch, and then revisit.
We have not reached the forecast for the next fiscal yet, but if we look closely – there is a wealth of information in this summary of your previous years actuals.
- Look at the services. Still need them all? Anything there that has not been used in years? Anything that has become such a low value add that you can look at replacing?
- Recurring fees – especially software – many of us have been forced to cut staff in this recession. Are you paying fees for more staff than you now have?
- Look closely at those ‘miscellaneous’ parts and supplies. If those are hitting the the dollar value of a FTE, you have structural problems, either through your purchasing process, or in your TCO (total cost of ownership) planning
- Non-recurring fees, hardware or software. There may be circumstances where 100% of your staff need that expensive software. But perhaps 20% need it while the rest just think it is a nice to have. As an example, you create PDF files? Adobe Acrobat Standard version does 90% of what the Professional version does, yet is almost half the price.
Next post in this series will start to dive into the forecast part of this first zero based budget!
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