Milwaukee Biz Blog

As southeastern Wisconsin businesses strive to manage costs during the current economic downturn, it’s important not to overlook how your company’s technology is being managed.

Make sure you get the most for your technology dollar and that your Information Technology performs at peak efficiency.

Trying economic times require executives to understand the IT component of the business as a whole. Executives know their financials, their marketing and sales, human resources and administration issues. But with technology, they spend money sometimes without knowing where the return on investment comes from because some companies do not establish, measure or track meaningful IT metrics.

Variables such as system availability, frequency and severity of trouble calls, and estimated vs. actual support or performance expectations provide a starting point to determine your technology’s return on investment (ROI).

In a slower economy, as budgets get squeezed, management is pulled in many different directions. Everyone is asking for resources. Marketing wants dollars to advertise; human resources needs funds to attract or retain talent; and IT wants upgrades and improvements. But if business owners don’t understand the value IT brings, they can’t allocate IT dollars wisely.

It’s apparent to management when technology does not deliver but more difficult to truly understand what makes IT consistently work well. This can create a frustrating environment with IT stuck in the unenviable position of having to justify itself and the technology it supports.

During slow economic times, we see a number of tactics that companies can utilize to improve their technology management. For example, department charge-backs - the specific requests IT receives from engineering, marketing, finance, HR and other departments are charged directly to the requesting department. Charge-backs show which areas of a business use IT resources and to what degree. Charge-backs give management visibility to how IT dollars and time are used and the benefits that IT provides across the company.  Such benefits include improved productivity, more streamlined business processes or improving the customer experience. This knowledge helps management define the return on their IT investment.

If a department, such as engineering, spends $25,000 worth of IT resources, they need to be able to pinpoint exactly how the dollars used benefited the department. Conversely, charge-backs may illustrate a department’s inefficient use of IT resources.  For example, a department with a high number of support calls to IT related to how to use a specific technology could signal a need to improve employee training or HR’s new hire screening process. 

Ultimately, any company can benefit from more insight into their expenses and how their IT resource/dollars are truly being used. Investigate if expenses are used technology improvements, such as adding new capabilities. Or are funds needed for upgrades to an existing function or system or just for maintenance, keeping what is currently in place running - maintaining the status quo?

There are several steps a company can take to better manage technology.

1. Learn the mechanics of your IT system(s). What are the individual components of your system? For example, file, print, internet, email and backup server(s) - security, antivirus, mal-ware protection and remote access capability.  Use a documentation and diagramming exercise to allow you to understand which functions are performed in-house and which are outsourced or hosted elsewhere. Then you will better understand which system costs are fixed and which may be variable.
2. Understand where you are in the lifecycle of your system(s). For example, if all of your workstations are over five years old and your server(s) are over six years old - running Windows 2000, you may be due for some substantial hardware and software improvements in the near future. As a rule of thumb, for budgetary purposes, the typical workstation and server life cycle is three to five years.
3. Learn where your IT resource is being used. Take the information you gathered in the two previous steps to develop and/or analyze what resources are required to keep what you have running - or to “keep the lights on,” so to speak.  Think of this as a minimum system requirements exercise. Information gathered through a department charge-back process will help you pinpoint use of IT resources.
4. Turn the previous steps into meaningful procedures. Take what you you’ve learned in the previous steps to implement meaningful procedures to ensure ongoing success. By doing so, you will not only be assured that your IT performs in any economy, but also that it will evolve with and support your business objectives.

To further improve your technology management determine your company’s technology personality, set expectations and objectives for how technology is used and how it contributes to your overall business objectives, consistently review plans based on those objectives, establish measurable metrics and collect data based on metrics to evaluate and manage the entire process.

Assess your company’s IT health; take the time to learn about your technology users and where inefficiencies represent opportunity. Work with your internal IT department or your IT partner so you understand where your money is going (hardware, software, support, etc.) and how you can spend it more wisely. Good technology management can pay your company big dividends, especially during uncertain times.

Bill King is the senior vice president of Centurion Data Systems in Pewaukee.

By Bill King

Change. It's life's one true constant.
In the business world, the ability to keep up with change is vital. Over the past 17 years, as an information technology (IT) service provider working with small to mid-sized businesses, we've seen a great deal of change in the way businesses work, in many different areas – electronic correspondence, remote connectivity and offsite data backup, to name just a few. Quickly changing technology offers as many exciting possibilities as it does new threats and risks. Viruses. Hackers. Spy-ware (mal-ware). These challenges were not on the SMB marketplace radar in the early 1990s.
How do you stay ahead of the game? What is the most efficient way to address new challenges while meeting your company's technology needs?
There is no one size fits all answer. Finding your true technology fit is as unique as your company - and the combination of people in it. The key is to understand your company's technology personality.
For example, is your company always after the latest and greatest or do you prefer the tried and true? Do you want to manage your technology in-house or would you prefer that a close business partner assume all or a portion of the responsibility?
Discovering your technology personality is fairly easy and well worth the effort. Take the following "Company Technology Personality Quiz."
Select the answer that best describes your company:

When it comes to considering new ideas/concepts:
a. We're open, we like to be the first to try.
b. We take a wait and see approach. We want to know what will work and what won't.
c. We're content to let others forge the way.

When working with new ideas/concepts:
a. We see the innovation advantages early on.
b. We prefer improving on accepted ideas over forging new ground.
c. We only embrace widely accepted ideas/concepts that have been around for awhile.

Regarding surprises:
a. We have a tolerance for surprises. We easily roll with the punches.
b. We can handle a few here and there, but would rather avoid surprises.
c. We have no tolerance for surprises, we like the predictable.

Our technology approach:
a. Pushes the limits.
b. Maintains the status quo.
c. Just the basics.

When thinking about technology, I view my company as:
a. Innovator
b. Realist
c. Cost conscious

If you mostly chose "A" to answer the questions, your company fits the leader/innovator personality. Companies whose industry is growing or facing a lot of changes may fit this type of personality. They view technology as the driving force in their business that provides a competitive advantage. This personality has its strengths and limitations. On the plus side, such companies find innovative ways of doing things. In turn, such innovation gets perfected into a skill and they see advantages sooner than others. These companies adapt easily to unpredictable environments, uncover new opportunities and realize bigger returns.
On the other side, these companies may do things because they are new, not necessarily because they're better. They may lose sight of disadvantages, take unnecessary risks and stand to realize bigger losses.
Most companies fitting this profile are best suited to the Managed Information Technology (IT) Care service model. By finding a managed IT care partner they can trust that they are able to look beyond simply resolving technical issues. A close partner is better suited to look ahead and anticipate future company needs. Since the partner, not the company, is responsible for technical decision-making, the company's management overhead is reduced. The partner shares their IT risk including loss from hardware or software failure, viruses, disaster, user error and other issues. And, because service costs are "not to exceed" based, IT expenses are largely fixed and predictable without budget spikes or surprises. Managed IT Care frees resources so the company can focus on core business activities.
If you usually picked "B" to answer the questions, you're in the mainstream/realist personality group. Generally speaking, smaller companies in mature industries usually fit this personality type. They view technology as giving them a distinct competitive advantage. Mainstream/realist companies are open to exploring new ideas and concepts and will adopt the idea that represents the best result. They reduce risks associated with new ideas and concepts resulting in a predictable success rate. But, they may also be close-minded at times shying away from innovation. These companies have a lower return on investment potential associated with new ideas and concepts than the leader/innovator type. They may also be slower to adapt to unpredictable environments.
The mainstream/realist company is usually best suited to a hybrid of the Managed IT Care, which I mentioned earlier, combined with As You Need IT care, better known as time and materials. In a combined Managed IT Care and time/materials arrangement, you leave certain aspects of your technology management up to your provider and on other aspects, you take the lead to manage your provider's support. A hybrid of Managed and As You Need IT Care offers a degree of predictability and reduced technology risk while retaining your ability to manage your hourly service requirements.
Finally, if you mostly picked "C" to answer the questions, your company fits the cautious/follower technology personality. You always look before you leap! You are interested in ideas and concepts with known results, good or bad, to manage your risks. You are very predictable overall, can easily recognize ideas and concepts that will work. You make choices that are widely accepted and minimize innovation risks.
On the flip side, your company adapts to change very slowly and might be hesitant to consider ideas that aren't highly predictable. Companies with this personality may miss opportunities or fail to capitalize on early innovation advantages.
If you fit this technology personality, the As You Need IT Care service model, as mentioned earlier, will likely work best for you. In this arrangement, you're in charge of your technology. A provider may offer counsel but you ultimately decide what gets done and when. You are happy to assume a degree of responsibility for technology management by purchasing your providers time only when you need them. The As You Need IT Care model suits your hands on management style.
Learning your company's technology personality definitely helps you choose the right technology partner and combination of IT services. Personality compatible technology choices will do more than just help with your bottom line. They will give you real peace of mind - and that's priceless.

Bill King is the senior vice president of Waukesha-based Centurion Data Systems.