I have not been naughty. In fact, I have been very nice this year, so please can I have ………
As the year comes to a close and the silly season of 'use it or lose it' IT budgets comes upon us, the software and hardware vendors in particular seem to relish in the chaos and madness that such inappropriate behaviour drives.
“Please can I have some big data, some AI, a new service desk... oh and some RPA!” Bah humbug! Why do we still face this madness every year?
If we really can’t change the financial process and have to put up with this situation, can we please start asking for some 'value' rather than just a shiny new toy! Now, wouldn’t that be fun?
“Dear vendor, I have some IT budget left and I want to buy some value.” Yet I fear many would respond with great value propositions, only to sell you another IT toy.
So, it’s probably too late to do much this year, but as 2019 is just around the corner, why not start looking at every IT initiative and analysing the real value it delivers. Why not track the value in a dashboard through value mapping, so you really can see what is delivering the most value to your organisation. Why not become value obsessed and turn every conversation with your business to value realised and those with you vendor to value received??
Last week, I sat down at a social gathering with a friend who is an IT Director. I asked him how much money he will be spending next year on 'right of bang' activities or projects as opposed to 'left of bang'. On the back of a napkin he started making some notes and adding up a few things and, to my horror, he stated that two thirds of his 'project' budget was spent on reaction. He could not tell me how much of his 'operational' budget was 'right of bang' as this needed more analysis and data which he did not have to hand, but he implied that a significant part of it would be spent on fixing, rather than avoiding, problems and improving the service.
I put it to him that many organisations believe that a pound spent 'left of bang' could potentially save five pounds being spent right of bang. Though it is very difficult to substantiate this, as there are few case studies out there, the message hit home. A disruption carries not just the cost of repair; you also have to include the lost business cost as well! I then challenged further, asking how he can ever translate a pound spent 'right of bang' as being value to his company. Our conversation below makes interesting reading.
Him: "If you have a disaster, every pound spent on DR is the best money you have ever spent."
Me: "I agree, but wouldn’t it be better to not have the disaster in the first place?"
Him: "Incidents always happen - fact. So, we need to spend money on ways to improve how quickly we can resolve them."
Me: "Do they? Or are some of them avoidable or even self-inflicted? Diverting budget to better service design could stop a large percentage of them and then you won’t need to spend as much on the few that remain!"
Him: "We have so much information locked in our IT management tools that we have to put big data over the top, so that we can make sense of it all!"
Me: "Seriously! So, your tools are so bad at generating management information that you now need to buy another tool to sit on top of them to do it!"
Him: "Well, I am thinking about just putting it all in the cloud and then it will be someone else’s problem."
Me: Mmmm... but you still need to manage business demand and your consumption - and the regulators will still hold you accountable!"
I feel bad about picking on a friend at a social event but sadly I feel this way of thinking is still common place - and he agreed that I could use this chat for the article. Far too many IT departments fail to spend money in the right places, or, worse still, spend money in a last-minute attempt to use up an IT budget allocation and then find themselves requiring yet another IT transformation to implement what they have just purchased.
Rob Grey called this out so well in his great article "Running another Transformation Program? Why?" when he stated that “there is a lack of understanding about how the transformation will affect the firm’s operations and drive value”. In fact, I would go even further than the examples used in this article and state that there is no consideration as to how they will drive value!
So, as the year comes to a close, please take a few moments to reflect and look at:
*Where your IT budget is being spent in 2019 – left or right of bang?
*How do you measure value in IT? Hint: its not just cost savings.
*Have you rushed to purchase something to use your budget allocation? Remember, a puppy is for life, and the IT puppy in this case may sound like a simple IT purchase, but it could result in an IT transformation, changes to your operating model, changes to your governance, etc!
*What are you going to do differently in 2019? Becoming value obsessed would be my recommendation!
Also, take a moment to reflect, as we often forget the past, ignoring the obvious and jumping straight into the promise that the future may hold. Think about the wise words from Dickens in A Christmas Carol: “I will live in the Past, the Present, and the Future. I will not shut out the lessons that they teach.”