Making IT Budgets Strategic

I believe we’d agree the business landscape has changed. The evolution of border-less interactions, secure, remote workers and client driven security and compliance puts immense pressure on the executive staff to identify and execute against their goals. The achievement of those business goals relate proportionately to the executive’s understanding of their organization’s current technology capabilities, business strategy and the overall competitive landscape.

Often times this becomes a three-legged stool. If the organization’s strategy is to grow (organically or through acquisition), there must be a very high understanding of how they define their competitive landscape. Once that has been identified, the executives map their business model (strategy, infrastructure, execution) to delivering against that stated goal. Interestingly, most organizations overlook the relationship between the technology they use internally to secure their organization and its’ responsibility to supporting those future objectives.

The ability of the CIO to deliver technology against the businesses’ objectives has never been higher due to the emergence of cloud and next-gen technologies, IoT and edge devices, business insights and technical analytics. Through these technologies, CIO’s are able to collect data, both technical and competitive, thus providing the organization with multiple internal and external, actionable scenarios. One scenario might be: an agile infrastructure provides a reallocation of costs from a CapEx to an OpEx model thereby potentially freeing up additional funds to invest in growth strategies. The CIO maps the internal investment (CapEx to OpEx strategy and execution) to the external investment (newly available funds allocated to acquiring additional, outside resources) to achieve the objective. In order to achieve this symbiotic relationship between IT and Business strategies, a redefining of traditional IT budgets is required.

IT budgets have been the bane of most organizations. They are generally viewed as only a cost center and therefore one of the first items to be pressured during the budgeting cycle. Year-over-year flat, support-based IT budgets aren’t satisfactory in times of evolution. Since traditional budgets have focused almost exclusively on maintenance, refresh, support of the current infrastructure along with FTE’s to deliver, there isn’t much room for the delivery of value towards achieving business goals or business unit strategies. The national average for IT budget spend as a percentage of revenue is between 3-4% (Deloitte, IDC, Gartner research), and yet most organizations will admit IT is underfunded as an internal organization. What if the funding categories of an IT budget were defined to better align with the organization’s business strategies?

From an IT perspective, there are three distinct activities that occur within an organization: support of the current infrastructure, design and implementation of solutions that support incremental business changes and delivering on business innovation. If IT budgets evolved to include a percent allocation of the above items against the overall budget, then the CIO has effectively addressed how to optimize current operations, deliver insights to business units and prepare for the execution of business strategies.

An example of this could be: Organization Revenue: $25 M, IT Budget: 3.5% ($875k). Through annual strategic business planning sessions, the short- and long-term goals of the organization are identified, and the CIO determines the allocation of the IT budget to be:

  • 57%: Support of Current Infrastructure ($498,750)
  • 26%: Incremental Business Change ($227,500)
  • 17%: Business Innovation ($148,750)

In this example, the CIO is presenting to the executive staff an understanding of the goals and how the investments will support the objectives. The internal “support” investment ensures the organization is utilizing the tools and infrastructure to secure it’s current and future operations. “Incremental Business Change and Business Innovations” investments attempt to clearly align tactical enhancements to the organization (departmental and company-wide) to achieve those strategy-based goals. Too many times the lack of foresight and planning leads to an inability to define an IT Budget as strategic but is extremely important given the change and speed of the market.

Hopefully, clarity has been brought to defining the business value of the CIO as they are driving the convergence of Business and IT strategies / objectives. This powerful, business aware CIO is now helping to delineate the “what the organization wants to achieve”, and “how those investments” will drive the execution. When an organization appreciates the value of documenting a 3-5 year plan, their IT budgets become strategic and a huge competitive advantage.

5 signs you require an MSP

In today’s business environment, technology is an integral part of business operations. The problem many business owners and managers face is that technology can be difficult to manage; often requiring a significant investment and specialized team to maintain and run it. This can be prohibitively expensive too for many small businesses, but it doesn’t have to be, especially if you work with an IT Partner or Managed Service Provider (MSP).

What is a Managed Service Provider?

In the IT industry, a Managed Service Provider is a company that offers small to medium businesses the ability to outsource the management of their day-to-day technology and IT needs.

In other words, an MSP is essentially your IT department. If something technology-related breaks, they help fix it. If you need an app devised or want to upgrade hardware and software, or take a look into virtualization, they can often help in these complex areas too. Many of these organizations act as your business partner to help increase the effectiveness of your business operations, and achieve your overall goals.

Do I need an MSP?

While there are a wide variety of IT partners out there, you might be unsure as to whether you actually want or need to work with one. To help make the decision easier, we have come up with a list of five signs that your business could benefit from outsourcing your IT management to an MSP.

1. You don’t have a dedicated IT department or staff

A commonality many small businesses have is that employees often wear more than one hat. The problem with this is that those who are not necessarily IT experts, but are perhaps more tech savvy than others, are tapped to look after the company’s IT needs. Businesses can suffer from gaps in knowledge of the latest IT developments. It is also a challenge to balance IT needs while also running a business and remaining productive.

While for some small businesses having a knowledgeable tech person look after the IT on top of their main job works, the chances are high that they aren’t planning for a future in IT and may not be able to carry out complicated upgrades or even ensure that your systems are secure beyond the current environment. This can undoubtedly lead to increased problems in the future, which are likely not going to be fixed.

Instead of hiring a full-time IT staff member, you could look into using an MSP who can offer the same services, but at a fraction of the cost. This allows your employees to focus on their main roles, while also allowing you to rest easy knowing that your IT demands are being adequately taken care of.

2. You have continuous tech problems

At first glance, many of the systems we use on a daily basis are relatively simple. That is, they are simple when they are working. But, when systems breakdown business owners quickly come to realize that the technology utilized in their businesses and the systems that support it are not only complex, but are becomingly increasingly so.

Complexity aside, all technology will eventually break. When it does, you need to factor into your budget resources to make replacements and repairs. If the technology incorporated into your business is constantly experiencing problems there is a good chance this is having a negative impact on profits and productivity.

By partnering with a quality MSP that looks after your technology, you can be assured that a team of experts are running your technology and systems efficiently and that you are able to meet IT demands and scale to meet future needs. Decreased maintenance and replacement costs can help improve your overall productivity and even profits.

3. The people looking after IT are overwhelmed

Any growing business needs technology to be able to scale to meet and support growth. This often overwhelms even the most seasoned IT professionals. Even if your business has a dedicated IT role or team there is a chance that they can become overwhelmed.

When the pressure is on important issues may not be addressed and corners may be cut in order to meet current demands. This can lead to increased costs and problem issues down the road, resulting in an even more overwhelmed Technology department.

The great thing about quality IT partners is that you often don’t have to outsource all of your IT needs to them. If, for example, you have an employee who is a whizz with building computers but does not have the time to oversee the whole of your technology needs, then outsourcing some functions can free up their skills or allow them to work more effectively in their main roles.

4. Your IT budget is unpredictable

The cost of technology is ever changing. Some months you may have to replace a computer while others may see a new server needed or a security issue that needs to be dealt with immediately. Because of this, actually budgeting for technology is incredibly hard, especially for small businesses.

Most IT partners offer their services on a flat-fee, monthly basis. This makes it easy for companies to budget for technology. The upside to this is that while your budget is predictable, overall costs and overheads are often reduced because your systems are kept in better working order and will last longer.

5. You have trouble prioritizing your IT needs

It can sometimes seem like a new system is needed on a near monthly basis. From servers to email systems; computers to mobile devices; your business will almost always require ongoing technology. The problem many businesses face is that they simply are not equipped with the skills and the know-how to recognize what their IT priorities should be.

Do you update a server, or look for a new email solution first? And in what order do you need to implement updates? It is not always obvious what the answers to these questions are, especially when everything seems urgent. If you outsource the management of your technology, the companies you partner with can take the time to get to know your company’s needs and demands and prioritize. This will make your organization more efficient and better able to reach business goals.

If you are struggling with technology in your business, contact us today to see how as your IT partner, we can work with you to ensure that your technology is working for you.

What Does it Take to Become a Dell Premier Partner

At NetWize, we are proud to have partnerships with many reputable companies, such as Microsoft, HP and Cisco. One partnership we’d like to highlight is Dell, one of our Premier Partners. What does it take for a business to join these ranks, and what are the advantages? You are about to find out!

In order to first become a Dell Partner, a business must possess three essential things: an active website, an email that is tied to the business and a valid certificate for reselling. Once you move up to Preferred Partner status, there are additional requirements, like completing at least one PartnerDirect competency, in areas such as storage, cloud computing or systems management, and certain level of sales over the previous four quarters upon completion of core competencies. The next level of partnership is Premier Partner, which is what we are here at NetWize. Premier Partners require two or more completed competencies, with at least $750,000 in sales in the previous four quarters, as well as the completion of one Dell Solutions training course. In addition, Premier Partners must display the PartnerDirect Premier Partner logo on their website (something we take pride in doing).

Once you have moved up the ranks, there are many advantages to be had. Dell Premier partners have access to active Channel management, field marketing, and engineering teams. They also engage with the Dell direct account managers to ensure that their clients are receiving the very best possible service, pricing, and support.  In addition, Dell works closely with its Premier partners to ensure that they are trained and up to date on all products and services and that the partner understands the Dell product roadmap.

In addition to being a Dell Premier Partner, NetWize is also a Dell GeoPartner. GeoPartner is a relatively new program that allows Dell direct sales representatives to leverage local partners to deliver services. The local partner delivers the service under the Dell banner, thus broadening Dell’s service reach. There is a relatively small number service providers included in the program, and Dell isn’t necessarily looking for hundreds of partners to join. Instead, they want to select companies, like NetWize, who have the specific skill sets that can meet the needs of its customers.

Ready to work with an IT provider who can assist you in many different areas? Contact NetWize today!

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