Something is radically wrong with IT today! Spending ranges between 3.2% for enterprises with revenue over $2 Billion in revenue to as much as 6.9% for organizations with revenue under $50 million. Not too long ago IT costs were at a firm 1% of revenue where they remained for nearly 50 years!
Interestingly enough, computing equipment is much more powerful than it ever has been and costs a fraction of what it once cost.
So where does the money go? The majority of spending today in your IT organization is on people! Your money is spent on both salaried employees and on 3rd party consultants.
Tech Pro Research reports that the number one priority for organizations in 2016 is improving efficiency of business processes.
How can this be? Haven’t you been investing in systems that provide process improvement for the past 50 years? What is going on within IT today.
In this post I introduce key concepts which I will drill into in future posts, but lets look at the mess that IT has become today.
Most organizations have many different technologies today, both hardware and software. There is a mix of purchased business applications and those developed internally or via 3rd party consultants. If you look at your IT staff you will find job titles of people like various types of “architects” that provide no direct return on your investment but cost you very significant salaries.
You’ll find new methodologies like AGILE which take control away from the business including control over what is important to be delivered and when!
You will see a vast array of internal “frameworks” and technologies that were supposed to improve IT productivity when in fact they do they exact opposite providing little or no value.
While the cost of hardware has dropped to all time lows, your total cost of supporting computing infrastructure has increased. Factor in security and privacy concerns that are now a major part of your infrastructure cost and the costs have spiraled way beyond that old IBM Mainframe that used to run your entire company! I’m not advocating a return to IBM mainframes, but think back to the organization and productivity of those days.
It’s time to take assess what is happening in your organization and how IT is performing for you. If you think you are not getting a good rate of return for your investment in IT and if you feel that IT is holding back your company instead of helping you leverage new and emerging markets, its time for an in-depth independent assessment.
I have done these assessments studying every aspect of your IT organization and its value and concluding with a recommendation on how to reduce your costs and improve the ROI on what you do need and get from IT. Additionally, I have helped put management structure and processes in place that put control over IT directly in the hands of the business where it should be and provide a means of isolating business executives from the techno-babble of modern technology.
I will describe my assessment process further in coming articles, but 2016 is the time to regain control over IT and insure it is meeting the needs of the business instead of being a playground for technologists.