Technology investments can create value for the organization by reducing costs, increasing productivity, enhancing customer service, or supporting growth. But many IT leaders are hard-pressed to prove that value and therefore justify their expenditures.
IT teams typically do extensive research and due diligence in selecting technology products. They look for solutions that will not only meet immediate requirements but will be manageable and scalable. They have to consider compatibility with existing infrastructure, availability of in-house skill sets, manufacturer support and a host of other factors. They've learned the hard way that multiple systems with limited functionality are often more expensive in the long run than full-featured solutions.
However, it can be difficult to articulate that reasoning to business managers and people in finance. As a result, IT may not be allocated to the budget needed to get the best solution for a particular project.
The art of debate
To make matters worse, the criteria that led to the product selection may be forgotten when it comes time to replace the equipment or purchase additional units. Busy IT teams rarely have the time or inclination to document how they are using the solution and the benefits it provides. When purchasing says there is a similar unit for half the price, IT doesn't have a strong enough argument to get the desired product approved. They can't prove why they need it and how it will create value for the organization.
To overcome this challenge, IT teams needs data that supports their position and the ability to present that data in the right way to the right people. A trusted partner organization can help with consulting services aimed at aligning IT investments with business requirements. It starts with a site audit to determine what solutions are in place and how they are being used. The team then works with IT to formulate a set of questions about those systems and answer the questions with data collected from the systems themselves.
For example, what is the total cost of ownership of the system? If that system is replaced with a lower-cost unit, how will it impact other parts of the IT infrastructure? Would you be saving real dollars or creating costly headaches?
This exercise can provide IT teams with the information they need to justify the cost of the system based upon the value it delivers. It can also identify systems that aren't being used to their fullest potential, and perhaps cases where a less-expensive solution would be a better choice. This makes it possible to reallocate budget where its needed most.
Although IT is essential to business operations, many organizations still consider it a cost center. Instead of viewing technology investments as a means of gaining competitive advantages, these organizations look for ways to keep IT costs to a minimum.
IT teams can benefit from working with an objective, third-party consultant who can translate purchasing decisions and budget requests into a solid business case. When the people who hold the purse strings ask IT to explain why a particular technology solution is necessary, you need to be able to provide the data-driven analysis that proves the investment is worth the cost.