If you missed the introduction to this series, click here.
For decades the goal in enterprise IT has been to increase performance at lower cost – an annual drive to boost IT capacity and capability by 10-50% whilst cutting the cost-to-serve (i.e. the cost per unit of IT) by an equivalent amount. For many years increasingly powerful processors, expanding memory and commoditised components made this appear feasible, even in the wake of a rapidly-growing digital universe.
However, as I’ve previously talked about here, the ‘third platform’ has made this unsustainable. Solely focusing on efficiency in an era when IT forms the foundation of how companies market themselves; how customers buy products; and how finances are managed, means organisations risk serious competitive disadvantage if they don’t adapt.
Writing in the Financial Times, Luke Johnson, chairman of Risk Capital Partners picks out an investment that had to be written-off due to the company fundamentally underinvesting in IT. The adage ‘spend to save’ has never been so true as it is today; however, this investment strategy must be done wisely, preparing the business for four things:
- A new model of service delivery – widespread use of apps on consumer devices has led to an expectation that enterprise IT should operate in the same accessible, simple way. As well as an effective means of delivering information, employees are happy to use apps to ‘serve themselves’ in terms of basic IT applications, from databases to HR and finance tools, on their desktop, smartphone and beyond. After investing in the initial delivery of an ‘Enterprise App Store’ the administration and operational costs should drop for a business.
- A new model of cross-charging for IT services – the integral role of technology in delivering just about every aspect of modern business, plus a greater ability to track and monitor access and usage of IT resources, has made it possible for the IT department to shift away from its reputation as a cost-centre. Other departments can be billed for the computing resource and IT maintenance they require, freeing-up IT resources to focus on enabling corporate innovation and business agility.
- Nuanced security awareness – dealing with IT security can be a drain on efficiency and performance. With the volume of security data available, and the increasing threat of cyber-attack and cyber-espionage, IT needs to find a way to navigate the maze of security considerations and stop inhibiting the business. Analytics technology will be key to unlocking this potential.
- Agility and performance for big data and analytics – investments in technology which enable faster capture and analysis of – and connection between – all the sources of information in a business will be critical to delivering business success in the future. Assessing infrastructure and software investments that could support this objective is key, as a wrong step could force re-investment at the point that the business is ready to embrace the potential of big data.
There’s no question that this is a complex assessment. But business and IT leaders need to prioritise investment in these four areas, lest they end up written-off themselves.