When I meet with potential clients for the first time, the first thing I always do after going over pleasantries and introductions is to dive right into the heart of what we’ve identified as the “five questions”. It’s not a sales pitch at all. We don’t consider ourselves to be sales people and our clients never have to deal with sales people or account executives or whomever; rather they deal directly with their Virtual CIO. Nevertheless, what these five questions do is get people to think about their views of IT and give them an alternative way to approach technology in their environment.

We feel that they are even more important when you are a small- to medium-sized business. The earlier a client’s company is in its development, the greater the impact Bradman Group will have on assisting it with insuring its continued and sustainable growth.

1. How do I get the best quality technology from my IT budget?

   It is important for the SMB to realize, as early as possible, that the IT budget is not a license to spend. If it’s handled that way, then you immediately force IT to become a cost center (nothing more than a money pit). We feel that it’s better to look at IT as an investment center. This is a place where sound decisions and wise use of capital will start to lay a business technology foundation that your business can grow on.

   How many times have you seen a dead-end solution that required more consulting time from the vendor? How many times have you seen well-intentioned IT leaders make costly decisions because something sounded good on paper only to find out later that the solution had no growth capability, or the growth potential was stifled at purchase time in order to save a few dollars more? How many times have you been sold a bill of goods?

   IT is full of dangerous paths and pitfalls. It’s absolutely important to keep an eye on the value that technology brings to the company. This is as simple as looking at how many hits your website gets, how many emails are sent and received, etc.

   Our mantra: Know your needs. Know the solutions. Know their value.

2. Should I focus my technology investments on systems, people, or process?

   Answering this question differs for every company, but several trends always hold true.

   Your systems and hardware are only one part of a successful IT strategy. Every company needs servers, desktops, switches, etc. Keeping your eye on raw dollar costs defies the first question (or rule) of IT spending mentioned above. Does that $500 “file server” from the local custom PC shop truly save more money than a $1000 server from a reputable manufacturer? Think about it in terms of whole lifecycle. What you save today you will spend tomorrow on support issues, replacement costs, and incompatibility headaches.

   Building a successful IT team is more than looking for people with badges and certifications. Some of the brightest and most successful people in IT are those who have had their heads down in projects and have not had the time or need to go and take tests about what they already know. The SMB is a start-up or growth phase needs these A-list players who are creative thinkers and are strategically minded. You don’t need to start with hiring a dozen “certified” developers when one A-list player can code circles around them and, with proper leadership, produce a final product that is sustainable and scalable when your company enters its maturation stage.

   Process is equally important. IT processes reflect and support the business itself. We like to say that “process is as process does.” If your process is terrible then the results will be terrible. This is good rule for the entire business, and not just IT. A strong leader can take him or herself outside of the business “box” and look inward to answer the question: Does everything truly click?

3. Are my technology decisions adding long-term value to the business?

   Perhaps to most challenging question that a business leader can ask, because our first component deals directly with “stage four” of a business: death. But not in a manner that leaves a smoking fiscal crater, but rather the planned exit strategy. Most SMBs that we’ve encountered have not considered this point. We’ve gone over it in other briefs before (read our Exit 101 brief for a glimpse).

   After your roadmap has an exit, and you’ve identified where that exit may take place, think about how technology decisions support your short- and long-term business goals. How does the decision support them and how does it add real dollar value?

   Additionally, keeping a watchful eye on business growth and direction can reduce mistakes. Mistakes in IT can be costly throughout the entire organization. One example would be a company that decided against implementing a proper SAN when IT demanded, not for lack of funds but because senior management and IT did not speak the same language. After a few months, the old system failed and the most severe result was a failed Microsoft Exchange server with several days of lost email. Was it management or IT’s fault? Neither. In many cases, business and IT don’t completely understand each other.

   Mistakes, even the smallest ones, can have real costs to the organization which can escalate in severity daily. These costs obviously detract from our goal of building business value, so it’s of paramount importance to see problems well in advance.

4. How do I properly forecast, plan, manage, and track our technology investments?

   Every good business leader knows that IT is part of their business foundation. Its needs are absolute. For example, email, telephone, and fax are logical components of the communications role. If one business day people arrived and email was simply gone, what would the effect be? How would that real cost effect the business? What if your business lost its phones? What if the entire functional role of communications failed? Keeping track of each components use and growth is equally as important understanding its value to the business.

   One misstep followed by another leads to escalating costs and losses. Patch-work solutions to real problems without foresight or vigilance can quickly turn your IT investments into costs, reducing value across the board.

   Investments in cogent strategies yield significant and almost immediate returns.

5. Once I have identified the solutions and plan of attack, how can I afford to execute?

   Building a sound IT strategy requires a person with business experience and technology experience. A common misconception is that a CIO should be business-centric. When this happens, and that balance is not present, the CIO can end up being simply an extension of a management team that attempts to force business rigidity into a field filled with nuance, leaving technology as a cost center, without a definable way for the business to use its technology as a tool for its success.

   Unfortunately for the SMB, this kind of savvy leadership is not easy to attract for a variety of reasons. How will you recruit this type of talent? How will you retain them when the average CIO salary is close to $200,000? What about their cultural impact on the business? Does the SMB truly need this person for a full 40-hours per week?

   These CIO “top guns” can be extremely formidable and a wise investment when the time is right. In the early stages however, the SMB should remain focused on building itself (I can’t stress value enough) to a level where it can realize its primary goal has been achieved. At this point, IT strategy, sales strategy, marketing strategy, and all of the other components of the business should have coalesced, leaving a sustainable and survivable entity for the next stage of its development.

These questions represent the tip of the iceberg but are logical starting points for any business leader who is looking to build a successful company, take their company out of its start-up phase and into growth, or prepare their growth company for its movement into maturation or acquisition.

Bradman Group can help these leaders achieve their goals by taking charge of the technology foundational layer which supports their business and making it stronger through the scaled application of large enterprise-level technologies and management fundamentals.

Contact us for more information. We’ll change your whole outlook!

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Tags: five questions, three knows, Virtual CIO

This entry was posted on Wednesday, June 25th, 2008 at 10:29 am and is filed under Executive Briefs, Virtual CIO. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.