How Should a Small Business Prioritise IT Spend?
With so many new technologies on everyone’s radar at the moment – the Internet of Things, Big Data, Machine Learning, Artificial Intelligence – just how can you be sure your IT budget is being spent wisely?
IT budgets are usually comprised of three main elements:
• Maintenance, support and upgrades
• Regulatory requirements
It’s innovation that grabs all the headlines and attention, but for a small business – especially at the moment – the other two elements are, at least, equally important.
A big part of your IT budget is going to be lifecycle management. As recent NHS vulnerabilities have shown, it’s vital to regularly audit what you have, and stay ahead of any end of support/ end of life announcements from your suppliers.
Not upgrading when you need to leaves you open to security vulnerabilities that hackers can exploit – and means you won’t be supported by the vendor, even if you need their help when you upgrade. Plus, quite often, there won’t be an easy migration path if you leave it too long to upgrade.
Your migration path necessarily encompasses integration with other applications, assessing the data models being used, technologies and hardware, or changes to the user interfaces that demand additional staff training.
When you bear all these implications in mind, suddenly leaving an upgrade to the last minute doesn’t seem so wise – you don’t want to be designing staff training and testing applications in a hurry.
All this means, that before you spend anything on innovation, you need to be carefully and constantly auditing the critical (and non-critical) business systems you have in place, and allocating sufficient IT budget to allow you to manage and remediate risks as far in advance as possible.
Do you know when your critical business system is due to go out of support?
The impact of regulatory change will vary dramatically, depending on the industry in which you operate.
Financial services, for example, have a particularly onerous regulatory framework in which they must do business.
However, at the moment we are all facing game-changing regulations in the guise of the GDPR and the UK Government’s response to it.
Assessing its impact on your business and your necessary response to GDPR – and other relevant regulations and legislation – is vital to the successful operation of your business. Non-compliance can come with heavy financial and reputational consequences, so this must also be prioritised before the much sought-after innovation budget.
Competing for Innovation
Everyone wants a slice of the innovation pie.
Someone within one department who wants the shiny new piece of software that is going to revolutionise their function should not be confused with business innovation. It might be the latest tool – but is it really going to deliver value to the business?
Innovation has to adopt a structured approach if it is to be successful.
It is important for you to have your innovation plan must be in place; don’t wait for someone else to think of a way to spend your budget for you.
Bending to the whims of different department heads is a strategy for failure. Innovation – and IT spend – has to be rooted in outcomes for the business as a whole.
Nor should innovation be at the mercy of the latest “next big thing”. Focusing on technology for its own sake is a recipe for unnecessary spending, not competitive advantage.
Instead of coming at it from the angle of “what can the Internet of Things do for my business?” we need to ask instead “what would make my customer’s lives better?” or “how can I expand the appeal of my widget to new audiences?” or “how can I reduce my operating costs?”.
If the Internet of Things can help with the answers to either of these three questions, then fine – invest away. But if it can’t, then perhaps the Internet of Things has little business being part of your innovation strategy.
Start with the business need – not the technology.
Stand back to gain insight
Although it might be tempting to rush at new technologies and attractive vendor propositions, IT spend must be strategic.
Housekeeping and security must come first. Responding to regulation second. And the sexy, shiny stuff? A sad third place; driven by business need, not the gleam in the vendor’s eye.
If you’d like help with your IT strategy, download our free IT Strategy guide here!
Grant McGregor can help you audit your existing infrastructure and policies. Our assistance can range from planning, maintenance, support and upgrades; to cyber security and accreditations; through to creating policies to respond to new or existing regulatory requirements; or helping with innovation analysis and strategy.
Contact us today on 0808 164 4142.
Image source: Pexels