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
August 11, 2010
In last weeks book review about ReWork by Jason Fried & David Heinemeier Hansson I mentioned that you may not agree with every point the authors mention.
I think the one point in that text I don’t fully agree with is the one on meetings.
The authors, to paraphrase slightly, state; don’t have meetings at all, except in an emergency.
For most of us SME’s, there are good reasons that you should have meetings.
1) In many small to medium businesses here is the primary disconnect I often see when dealing with IT staff or suppliers.
The business management responsible for IT?
Well, they never speak to technology staff unless something is broken. For non-technology managers (ie COO, CFO etc) responsible for their IT, if you are not in regular communication and demanding both tactical and strategic updates, I consider you to be abdicating, not delegating your technology function.
2) You know the old story of the blind men trying to identify an elephant when they can only touch very small pieces?
In our fast paced world, many of us travel, many of us also work solo – often not even in the same location. We can begin to get a feeling of disconnect, a feeling of absence. We begin to lose sight of the bigger picture. We begin to be like the blind men, never seeing that bigger picture.
An occasional meeting (even with only video) can help keep people feeling connected and ‘in the loop’. Enabling them to take a look at that elephant.
3) Simply enough – Ambiguity.
Have you every been caught in email CC (carbon copy) hell as people argue, negotiate or discuss?
I am sure most of us have!
Email or other non-visual methods of communication when the issue is explicit instructions or a request, I agree – no need to waste time on a meeting.
But if there is any form of ambiguity? if participants need to negotiate? to discuss? to resolve? (even on a one to one basis) Get it on the table, and get it cleared up quickly. Don’t sit through eight hours of back and forth email hell.
With the above being said, I disagree with vague, useless, time sucking meetings just as much as any body else!
You don’t need everybody in the company to attend a meeting, only the people required for a decision.
Proper agenda, and follow it. Don’t wander off track.
Explicitly clarify and repeat what was decided – and what was not decided – and summarize the next steps and each deliverable.
The SMB Takeaway
There are many really, really bad meetings going on in most of our businesses, yes – you need to fix them! but a blanket No meetings! is usually not the right response.
Photo Credit decafinata 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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January 11, 2010
A decent article at silicon.com titled; How to manage your CIO: What every CFO needs to know
I can only rate it as ‘decent’ because a few of the recommendations are from constituencies with vested interests in one space, and their opinion is that their space should always be job 1. (The cat will always tell you to leave the bird cage open right??)
To quote from the article;
Around 23 per cent of CIOs surveyed last year said they currently report to the head of finance, compared to 38 per cent who reported to the CEO.
It is not just the overall percentage of CIO’s reporting to the CFO, the article contends that IT Leadership reporting to the CFO is also trending upwards. Overall I agree with most of the details outlined. In fact, in the SME space, it is probably more common for IT Leadership to be reporting to the CFO anyway.
So, What if you are not a techie CFO?
Many of the individuals interviewed agree that there is not a huge need to be a pure technologist when managing your IT Leadership. That is very true – however you must be able to understand the relevant level of detail about IT.
As a CFO, you would not approve a new facility without understanding the pros and cons of each possibility in that decision! And for many businesses, IT is frequently even more of an investment, so understanding its applicability and limitations is critically important. (Hint: IT does two things really well, integration and standardization)
Consider a second reason for this relevant level of detail. Your sales team has initiated a project that requires extensive IT support and assistance. Your IT Leadership has recommended Vendor ‘A’ as best at meeting the technical part of those requirements. But hey! after a golf game – a sales chap tells that Vendor ‘B’ has a product that should be less expensive!
What you may not know is that option ‘A’ is leveraging all your existing, (and amortized) infrastructure investments, and is also leveraging existing skill sets. Option ‘B’ requires new infrastructure, new skills, and new resources. (Hint: Your investment today is your operational cost tomorrow!- so it pays to understand what those choices will be like down the road.)
The (In)Famous Silo
The two organizational processes that usually have the most cross functional view of your organization are finance, and IT. With your IT reporting directly to finance, there is always a risk of IT becoming a single silo under the finance portfolio. Since IT has its fingerprints across your manufacturing, your supply chain, everywhere, you need to avoid the problem of IT becoming too insular, risk can rise as input is not obtained in a cross business fashion on initiatives.
As an example, CFO’s can be comfortable insuring or hedging facilities or currency risks, but the risk of data theft through improperly secured POS (Point of Sale) or other systems can be new. (hint TXJ Nasdaq TJX reportedly absorbed a 188 million charge after their POS breach led to the theft of credit card data) Ann All at IT Business Edge has another example of that here.
Look at The Soft and Squishy
Sure, there are hard dollar ROI calculations that can be made when investing in quantitative business technologies that improve transaction speeds or processes. But one area where finance and IT Leadership can learn from each other is improving the calculation of soft benefits in IT. These softer dollars can include external qualitative issues such as brand awareness or customer loyalty. But they can also include internal issues such as collaboration or convergence.
IT and Finance should be meeting regularly anyway. Double that for their leadership teams.
Meet regularly, ask questions, play the devils advocate
And for heaven’s sake, ensure everyone is speaking English (or your native language!)
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Photo Credit Let Ideas Compete via flickr