6 signs that your business is bleeding money and poor IT is the cause

By Frank De Pasquale

November 24, 2017

All too often, we see business executives treat IT as a necessary evil rather than an opportunity for further value. And this attitude carries over to how they make IT purchasing decisions.

With all the various urgent demands on your limited budget, it’s almost too easy to keep deferring IT investment, especially when it requires the outlay of capital. However, even though you think you can get away with delaying it for at least one more year, signs to the contrary may be right in front of you.

IT is seen as an expense and not an investment

All too often, we see business executives treat IT as a necessary evil rather than an opportunity for further value. And this attitude carries over to how they make IT purchasing decisions, with the focus remaining on driving the cost down rather than on leveraging IT for advantage.

Over time, such cost-driven purchases are likely to fall far short of expectations, requiring businesses to make supplementary purchases or make do without. And while this is happening, competitors may gain advantage though clever technology innovations.

The wrong person is tasked with IT strategy

Whether it’s outsourced or internal, almost all businesses have an IT management role – someone to manage the everyday operations, provide user support, and ensure that things keep ticking along.

But what happens often is that this is the same function that gets tasked with thinking strategically about IT for the whole business, and there are a number of problems with that. If we were to use the example of internal IT Managers, chances are:

  • They were hired to do the doing, not the strategic thinking that will inform the doing. Therefore, they are likely to lack the essential skills, training, and attributes necessary for this kind of thinking;
  • They won’t have the necessary level of influence in the business (in comparison to Executives) to effectively advocate for IT-led initiatives;
  • They may have trouble articulating the value such initiatives can bring in non-technical language that Executives can understand and appreciate;
  • They will have conflicting priorities, having to provide strategic oversight while also doing the doing, which will often result in sacrificing the former to focus on what they see as their primary job function; and.
  • Their KPIs are likely to be operational rather than strategic, supporting this bias in prioritisation.

There is no clearly defined IT strategy for your business

Most organisations will have a clear articulation of what their goals and objectives are, and a vision for what they’re working towards as a business: ‘we want to grow by 5% over the next 12 months’ or ‘we want to extend our market share interstate within the next 2 years’.

However, it is quite rare for that articulation to be translated to an IT-specific strategy that defines how IT will be leveraged for advantage to support the organisation in meeting its goals.

As a result, IT investment decisions are not guided by the overall vision for where the business wants to be in the future. Instead, decisions are based on other factors (such as cost, urgency, personal preferences) that don’t allow for IT to be optimised for the specific objectives and requirements of the business.

For instance, if you are working towards growing your business by 5%, your technology environment will probably have to scale to accommodate this growth, and this need to be factored into the decision making

Your employees are leaving and poor IT may be a factor

In recent study of more than 1000 office workers conducted in the UK, 47% of respondents said they would consider leaving a job because the tech in their workplace was so poor (McGee, 2014). Based on my personal experiences working with many Australian businesses, I wouldn’t be surprised if the sentiment would be similar here.

We all know the significant cost and productivity loss associated with staff dissatisfaction and high turnover rates. If a poor IT work environment is a contributing factor, the cost of not addressing these issues can be detrimental to a business.

IT issues are limiting your employee’s productivity

I’ve encountered a surprising number of businesses whose IT customer service was so poor that staff had to figure out their own workarounds in order to get their jobs done. Not only are these far from the kinds of workplaces that foster great work, enthusiasm, and innovation, all that fiddling around with IT issues leaves far less time for any actual work to get done!

In fact, the same study I referred to above found that the average UK worker lost as many as 11 business days a year due to technology issues (ITV, 2014) such as software errors, faulty devices, and poor network connections. That’s a lot of time wasted on bad IT.

Poor information management is causing conflict

Sensitive information is kept confidential for a reason. However, poorly managed data can result in leaks of sensitive information such as salary and benefit packages, especially among the executive team (who may automatically be granted access to everything), leading to awkward conflict within the core of a business. As you can imagine, such issues can be detrimental to the effective functioning of a business.

Are you experiencing any of these issues in your business?

Don’t worry, you’re not alone. I’ve personally worked with numerous business leaders who, when they first came to me, were far from optimising IT to its full potential. Working together, though, we’ve helped them turn their approach to IT around. As a result, these businesses enjoy clear alignment between their overall business goals and their IT investment, significantly increased productivity, and a highly-skilled and accountable team championing IT on behalf of the business.

How to make the change

In working with business leaders to optimise their IT environments to meet their goals, we follow a few specific steps to help them make the change:

1. Understand the IT challenges your business is facing

You can’t fix a problem if you don’t know what it is, so the first step is to meet with your staff and draw out the issues they face. In medium and large organisations, it’s best to select a representative sample from the different functions and seniority levels to gain an understanding of how IT issues may be impacting their various roles and ultimately, their customers.

A challenge with these workshops is to know how to illicit staff feedback in a useful way. As IT consultants, we often play a role in clarifying the impact of specific staff complaints for the executives and even back to the staff themselves.

I also recommend conducting an independent audit of your IT environment, to help you validate the reality of your IT environment against what you perceive it to be (do you actually have the systems and capabilities you think you have? If so, what shape are they in?), and to identify further opportunities to optimise your IT to meet your business goals.

2. Prioritise the areas that need addressing

When you go through the process of identifying all the IT related issues your business is struggling with, it may seem like all things need to be addressed immediately – and this can be overwhelming.

Instead of panicking or simply ignoring the issues, carefully prioritise (in consultation with your users) the importance and urgency of addressing each issue so that you know where to start. I recommend prioritising the areas that have the biggest impact towards helping you meet your business goals – to maximise the ROI of your efforts, and to drive significant outcomes sooner.

3. Clarify your objectives as a business and the resulting strategy for IT

But before you kick off any improvement initiatives, I recommend investing the time to clarify the IT strategy for your business, so that the approach you take to these changes can be validated against the strategy.

First, get a really clear picture of your approach to IT as it currently stands. Then, identify the gaps this approach has in terms of helping you meet your objectives for the business. Once these gaps are exposed, you can develop specific measures to address them, and build the foundation for your business’s goal-aligned IT strategy.

If your business is depending on your IT support resource to also drive the IT strategy, it’s a good idea to establish a new role or update an existing job description to lead the charge in terms of IT strategy. For example, I am the Virtual CIO for a number of our clients’ businesses which don’t yet have the need for a full-time CIO, but derive advantage from my IT expertise and executive insight.

4. Kick off the changes

Armed with a clear IT strategy and a list of prioritised actions, you’re ready to kick off the refresh of your IT environment. Even after all that hard work, it can be easy to get led off track, so ensure you appoint a strong project manager to oversee and ensure the success of this undertaking.

Get Exclusive
Insider Tips

Learn how to improve your business with exclusive insights we only share with our private newsletter subscribers.