Investing in a company’s IT systems is now a regular part of planning.
However, it’s easy to focus on only a few areas of the business instead of taking a holistic approach. In order to avoid this scenario, the company must look at all areas of the business to build a robust IT infrastructure.
How to manage your IT investment
Connecting the dots
The challenge of migrating legacy systems and platforms can put businesses off IT improvement. It is a time-consuming process, especially if the business has expanded through M&A activity or partnerships. In most cases, data will be stored on different systems and in different formats, so consolidation is quite significant and will inevitably require a sizeable investment.
This issue can often go ignored as staff grow used to working with disparate data sets and systems. However, this severely hampers productivity as employees have to navigate multiple programs to find client information or historical data. It is also likely that mistakes can be made when the data does not exist on a single accessible platform. Well-thought migration and consolidation, will streamline processes and allow the business to focus on delivering results.
Bringing on help
To achieve the best possible results, IT investment often needs to go beyond in-house systems and tools. As competition increases, businesses need to improve both their output and processes; this is where investment in outsourcing providers can prove invaluable. However, many often overlook this solution, largely due to historical views of outsourcing.
It is important to remember that outsourcing does not mean replacing the internal team with a third party. That is an option but is by no means the only choice available. More often than not, outsourcing provides enhanced support on projects and services, alleviates the burden of certain processes or simply provides advice on current business practices. If outsourced effectively, the IT team will have more time to develop and improve processes, while the third party deals with the day-to-day tasks.
Planning for the worst
IT investment typically aims to improve current technology or streamline certain processes, but there can be a huge gap when it comes to planning. Businesses are so familiar with using technology they often forget to strategically plan how to mitigate risks and unforeseen issues that can occur when things go wrong – be it a system failure, security incident or transport strike. When the company is hit by an unexpected event, staff can often scramble to continue their working day. Without a clear strategy in place, the business risks financial loss due to the inability of staff to work effectively and efficiently. This doesn’t even take into account areas, such as reputation damage and regulatory penalties.
IT has a vital role to play in providing a comprehensive, structured and strategic business continuity plan that is able to respond to any challenges that can impact company operations. A key barrier to making improvements in this area is due to how the company views its IT priorities. Regulation, data protection and the general running of the hardware can seem like the most important parts of the business. However, if you do not account for the day-to-day, these large-scale IT challenges will not matter – the business will simply suffer from a lack of planning.
Conclusion
IT investment is a vital part of how a company operates. However, it cannot focus on a single area of the business. Simply investing in cybersecurity alone will not improve internal processes or streamline activity. To build a comprehensive IT operation, you need a balanced approach that takes into account all aspects of the business.
Businesses whose boards have strong digital skills enjoy benefits including 17% greater profits, 34% higher return on assets and 38% faster revenue growth according to a report by MIT SMR.
Any of those advantages would put a company in a powerful place against their competitors, so how does this one difference deliver all three? And if it’s so impactful, why do so few businesses have IT on their board?
6 reasons why having IT on the board makes such a difference
1. IT and business alignment
Businesses without IT leadership on the board often have a siloed or even antagonistic view of IT. In these environments, IT is often labelled as a non-contributor to the business since they aren’t directly creating revenue. Even worse, an uninformed board rarely considers how the essential work of IT allows revenue-generating departments to succeed.
Resentment easily grows between departments in this scenario and causes in-fighting, loss of talent and a stressful work environment. This leads to long-lasting reputational damage, a reduction in business productivity and ultimately, lower revenue.
Once senior IT executives are present on the board though, they can clearly communicate IT’s value, potential and contributions. Improving alignment and collaboration whilst reducing friction across the business.
2. A lower technical debt
Digitally strong leadership is aware of the concept of technical debt and invest intelligently to eliminate it. Businesses without IT executives or their IT support provider on their board, are rarely even aware of technical debt and make flawed business decisions as a result.
Problems accelerate for non-savvy businesses if misconceptions such as IT being a ‘necessary evil’ or a business ‘cost’ get out of control and begin influencing the board’s decisions. This causes technical debt to accumulate even faster – narrowing cash flow, increasing job disengagement and lowering the business’ productivity ceiling.
If IT has a voice on the board, they can address these misconceptions and release the stranglehold on investment and advancement they cause. This reduces technical debt, improves day to day operations (and thus profits) and re-opens the gates to innovation by strategically investing when appropriate opportunities arise.
It might sound crude, but if someone’s job or ego isn’t at risk, genuine change and progress don’t happen. Having board members who are accountable for IT multiplies the impetus for delivering on IT’s full value and encourages greater performance. This ultimately accelerates project delivery and the achievement of companywide and departmental KPIs.
Having a CIO, or a CIO-level representative from your support provider present on your board means the knowledge and accountability to deliver real change is in place. But realistically, the entire board, not just one person, should be accountable for IT’s performance since IT underpins the whole business and is where competitive advantage lies.
4. IT and business strategies support one another
In businesses without IT representation on the board, the strategic direction of IT rarely fits with the overall business strategy and maybe even works in a competing direction.
A simple example of misalignment would be if the business wanted to increase customer engagement and service, but IT had an ongoing implementation of a business management solution like ERP or Practice Management with a poor CRM system built-in.
If IT had representation on the board, they could have seen the misalignment and raised it prior to purchase. Even if the software was already bought, they could have reviewed an additional CRM product that integrates with the other line of business applications and makes up for the existing solution’s shortfalls. While there would be additional costs, the CIO would clearly define ROI in advance, with support from marketing.
IT leadership on the board can also lead to other projects which deliver on the business strategy. This would create overarching benefits, from back-office automation in any sector through to shop floor management systems in manufacturing, and perhaps AI or general process improvements in legal firms.
However, more commonly than misaligned strategies, businesses without IT on their board rarely have a real IT strategy at all. Usually just having a budget and a refresh cycle documented; putting them far behind the pack.
5. A more pressing attitude to risk management
A board without IT leadership can place a disproportionate amount of focus on extraneous risks whilst critical IT risks go unaddressed. Even if IT has a solution to hand, the board may still deny funding since they don’t understand its importance.
Consequently, increased downtime, business disruption and lost money should be expected as the underlying infrastructure becomes neglected. Downtime alone costs the average business about £4,300 per minute – a painful sum for a non-savvy board’s inaction.
But downtime is not the only risk a board without an IT presence will fail to address. Cyber-security, reputational damage, data loss and other critical issues will go neglected without the correct emphasis from IT.
When IT has its place on the board, the correct emphasis is placed on IT risks since there’s an inherent understanding of their importance. Pressing issues can be correctly raised, evaluated and solved by top-down management, reducing downtime, disruption and the associated costs.
6. Broadened horizons
If you look at a CIO’s job description, you’ll see requirements like:
Create business value through technology.
Strategic planning of business growth objectives.
Ensure tech systems and procedures lead to outcomes in line with business goals.
Oversee the development of customer service platforms.
Manage IT and development team personnel.
Approve vendor negotiations and IT architecture.
Information risk management.
Establish IT policies, strategies, and standards.
Develop and approve technology futures and budgets.
Beneath the IT-specific language, these are all essential skills for a board member to have. Without IT leadership present at board level, these are skills you’re missing out on.
But specific skills aren’t the only thing boards with no IT representation miss out on. Thanks to their unique mindset, a proven business executive with a vast knowledge of Information Technology and its application can challenge assumptions and find opportunities in overlooked areas.
Why do so few businesses have IT leadership on their board?
Based on all these factors, you may assume every business has IT leadership at board level. However, you’d be wrong.
For a start, most IT support providers lack a mature enough offering to include true board-level assistance. This makes it nearly impossible for businesses who outsource their IT to have IT present on their board. (IT support providers with this level of ability do exist, but they’re rare.)
Many businesses also still ‘tolerate’ IT, rather than seeing its value-enhancing potential.
You may realise the illogic in this excuse. While the salary may be large, it would likely be a fraction of the potential increase in revenue a savvy board can drive, let alone the potential at the bottom line. However, short-term costs are often a driver for many businesses, so they cannot see the value they’re missing out on.
But there’s a reason that excuse makes even less sense and it’s that, if you’re smart, getting the skills doesn’t cost a lot either.
Taking advantage of an outsourced service like a CIO on-demand service gives you access to exactly the same calibre of seasoned IT executive, without the costs, risks and hassle of hiring and leading an internal big hitter.
Digital transformation and automation are hot topics – they’ve been hot topics in one guise or another since IT was born. But despite their proven effectiveness and capability to enhance the way a business operates; many businesses only pay lip service to improving their internal processes in earnest.
Why is this? The two most common reasons are that either they’ve been burned by a project or initiative that was sold to them using automation and digital transformation tags as buzzwords which then failed to deliver substantial results, or they’re distracted by the more visible (but less impactful) new campaigns being generated by marketing or sales.
This obsession with searching for new horizons whilst leaving the internal business to fall into disrepair is seen all too commonly. Even in manufacturing, companies who have been improving their production processes relentlessly for decades seem to have forgotten to apply the same fervour for efficiency gains in the back-office. There are huge gains to be made from automation, but it must be business-led and with a focus on ROI.
So, how do we begin?
1. Understand where you are
This early on, you shouldn’t be looking at the tools to conduct your automation. Nor should you even be looking for external consultants. You need to instead get a general feel for what could be improved and what should be improved in the business.
This is a straight forward exercise of breaking down the business into its component parts – typically into departments. Then list all the business operations/processes within that department, such as client onboarding, lead-processing, invoice processing and debt collection.
You should then break down these processes into steps and actions. If you can use a flow-chart then great, else just map it out in a way that the team understands.
Regardless of what method you use, it is imperative that you are as precise and detailed as possible at this point in your journey. Every concurrent step follows on from this one, so ensure you start on steady footing. The more detail you add, the simpler it is to see areas that can be automated which saves future you time and other resources.
2. Determine priority areas
As you go through your analysis you’ll start to see areas that can be improved quickly. You’ll also typically see that many internal processes can be broken down into two core types of task – actions and approvals.
Taking a typical and traditional expenses procedure as an example: An employee would open an expenses sheet and enter the details of their claims, scan in all their receipts, print the form and receipts, sign the form, hand it to their line manager, they sign-it, it’s scanned back in and finally sent to accounts for payment.
You can see from this that even with simple tasks, there’s a good deal of steps and many opportunities for automation. However, there are also some stages that are impossible to automate – the signatures are a notable example. These can still be digitised, however.
The real purpose of this step is to gauge how and where automation/digitisation can make an impact. By identifying processes that have wide stretches of actions which could be automated or lots of approvals that could be digitised you can create a priority list of tasks that you should address to have the biggest impact. The more steps and touches by people the greater the potential impact.
3. Look at technology
Thanks to the rampant rise of technology and globalisation, you are likely to be able to find tools and applications that fit your requirements relatively easy.
Of course, many systems will be able to take over many parts of your operations and the processes within them. If you can find one system that can deliver greater efficiency and ultimately customer service then it’s potentially going to save you costs, integration headaches and upgrade hassles.
On the flip-side it’s important that during this stage you find a system that maps directly to your requirements, rather than trying to change your operations to fit a system – which can happen with complete business systems that blend various applications and operations, i.e. Practice Management Systems in law firms, ERP in manufacturing, etc.
You may have to create a blend of systems to deliver a highly configurable system. As in essence you then get a much more powerful solution that will deliver you greater results and potentially a greater edge over your competition. Lots of tiny improvements soon mount up into a measurable advantage.
A clear requirements analysis is really going to help you see the gaps when looking at software solutions and systems. Do understand that it’s common to buy a total business system and then not use large pieces of it because those parts don’t truly map to your operations, i.e. you use the accounting and service elements but don’t use the CRM functionality – potentially using a 3rd party solution that integrates better.
4. Plan the project
Once you’ve mapped out your processes, bundled them into relevant categories, evaluated where the big wins will come from and have a solid system/application more or less identified then you have a clear starting point. Now it’s time to look at the project delivery.
A clear time-bound plan along with sensible milestones is essential to deliver returns from a digitisation project. You should be working in conjunction with vendors and (if relevant) developers, along with internal affected teams to create a project plan that you all buy into and approve. It’s important to of course consider costs, not just the hard costs but also the soft-costs – which will often make or break a project in terms of delivering a business-enhancing result.
If you are looking at numerous digital transformation projects, it’s important not to fall into the trap of rolling out too many projects at once or back-to-back. Too many companies go for fork-lift upgrades where they change numerous projects at once and that can cause fatigue and frustration in the user base at best. Create a considered road-map that will give staff time to become accustomed to new ways of working or new systems before undertaking more change.
5. Go hard on testing
Testing can never be overrated. You can only ever deliver an effective digital transformation project through a rigorous and considered testing plan.
Ideally, you’ll be able to pilot the new process or system in a real-time test environment. That way you can see the difference whilst ironing out issues as you go, prior to a wide-scale rollout.
This is increasingly possible now since many applications and systems are now cloud-based, allowing you to trial a system in a fully-fledged test environment without signing up for long-term contracts.
If there isn’t a way to preview the effectiveness of the new process or system, it’s important to agree what success looks like with the vendor far in advance of signing an order or contract. Too many businesses sign-up on a sales person’s promise. A project can fail because clear deliverables aren’t agreed at the start.
If you have stakeholders, i.e. users of the system, ensure that they are happy with the testing. Without stakeholder and user group sign-off you can find yourself surrounded by disgruntlement and finger-pointing. Make sure you tie everyone into success.
6. Go Live
Once you’ve signed off your testing and pilot as a success, it’s time to finish your roll out and go live with your new system. If you’ve got to this stage successfully everyone should be raring to go (communication is everything) and fully trained.
You should now be following your project plan as you bring the solution live. It’s also important to document and analyse any issues that arose along the way. Discuss them in a ‘lessons learnt’ session with the project team during or after the rollout. We all grow through difficulties, and our experiences can help those who follow after us on other projects.
7. Evaluate success
After you’ve delivered your automation project it’s important to formally look back to what your objectives were at the beginning. Did you meet them? It’s also important to do a formal follow-up meeting. Ideally once everything has been running for a few months and then maybe after the first year.
If you can clearly demonstrate the value and business enhancement over a period that’s exciting. It will also transform a boards perception of IT. It will drive it to the centre of the board agenda – which it should be right now.
8. Start again
Digital transformation doesn’t have a clear end. It’s all about continual improvement and so should in effect be a never-ending cycle. It’s very unlikely that the change you have instilled is perfect and can’t be improved.
If you want to grow your competitive advantage and/or profit margin you should be managing change as you go; whilst also revisiting the whole process in specific time-frames. This could be every 3 months, 6 months, annually or longer if appropriate (unlikely).
Ideally, now you’ve gone through the motions, innovation, automation and transformation should have become part of your standard operations. Your board will hopefully be demanding it.
Conclusion
Digital transformation is without a doubt a buzz term. In reality, it’s LEAN and continual improvement rebadged. It’s something every business should be doing in a structured manner to survive and thrive in a global business environment. The challenges are there, but you can gain than ther is to fear.
The legal business landscape is still changing at pace and thus the firms within it need to change to protect their client base, their staff, their brand and their margins. IT systems and platforms now sit at the heart of every firm and are key to supporting these important areas.
Within the IT estate, the practice management system is king and generally includes other important solutions, such as case management, document management and CRM. There’s certainly a renewed vigour in the legal sector around technology and the practice management system is the place where most firms are looking for an advantage.
There are however several common mistakes which all sizes firm continue to make time after time when it comes to choosing a practice management system.
1. Following the herd
The legal sector is notorious for having a herd mentality, particularly around IT. It’s common to see firms choosing the same practice management system based solely on another firm’s decision. And sometimes, before that firm has even implemented it!
It’s a dated strategy, basing decisions on what others are doing rather than being driven by specific strategic objectives. Whilst 10 or 20 years ago, in a smaller, less competitive market, there may have been some merit from being in the same boat. However, in an ever-increasing competitive market, this is no longer a sound strategy.
It’s important firms choose new business systems on their own strategic objectives and/or operational requirements. And to do this properly they must understand what’s available in the market and what’s possible; however, this needs to be a continual process, not just a something done once every 5 to 7 years.
To achieve a competitive advantage and increased margins, you must map the right technologies to specific and documented requirements, both operational and strategic. This doesn’t mean ticking off a features list – it’s about being in control of the sale and having a concrete understanding of the desired business outcomes before even looking at software products. If a firm just follows the herd, they aren’t generally in control of their firm’s direction and the move to a new practice management system is often unstrategic. This will significantly impact a firm in a rapidly changing landscape.
Many firms choose new practice management systems for a variety of reasons:
Their old system is going end of life;
Other firms (the herd) are moving to a new system or
They’ve seen a shiny presentation that promises buckets of gold.
These are fundamentally the wrong reasons to be choosing new software and will often lead to failed projects – at least in terms of a return on investment or getting any sort of competitive advantage.
New software purchases should be driven by the business need, defined by the business strategically and led by the business board. Strategic objectives should drive the decision-making process and it’s important to define the objectives you wish to achieve post-implementation. It’s therefore essential to analyse and define the real business requirements upfront to ensure the right business outcomes are delivered.
Many firms also don’t know where they stand in terms of the maturity of their IT systems and capabilities, particularly how they use their systems. It’s essential to do work upfront and baseline where they are now across areas of the business and defining the key project success factors on a departmental and firm-wide basis. It’s also critical not to simply focus on the fee-earning side of the firm. Marketing, business development and back-office functions are more critical than ever when looking at a practice management system.
3. Looking at one solution to fit all IT requirements
It’s common for firms to believe that using a single IT solution to deliver multiple functions is a sensible move. This (with the exception of the smallest of firms) is a significant mistake.
Practice management, case management, CRM and the like are important business functions and you will struggle to find a package which delivers great functionality in every area. Whilst one may deliver great case management and finance functions, you’ll often find other areas are mediocre. This leads to frustration in some departments and missing out on critical features that can deliver a significant business advantage.
Typically, firms should be looking at solutions to deliver for specific business needs. They need best-of-breed (balanced against budget and ROI) and shouldn’t be afraid to purchase new systems and integrate them the core line of business applications, i.e. their financial and case management systems.
There’s no harm in having in-built time recording or CRM but not using it and choosing a best of breed add-on solution if there’s a clear business case or return. Too many firms also end up changing their operations negatively to fit into a system, rather than choosing a solution that moulds to exactly what they require. This is quite possibly the worst thing you can do as it hampers growth, flexibility and innovation.
4. Viewing IT related projects as the IT team’s responsibility
Most IT projects these days are business improvement and change projects; practice management systems’ probably being the biggest business change project most firms undertake. Although a practice management system may be software-based and run on an IT platform, the outcomes are definitely business ones, be it generally operational or departmental. To push these projects to the IT team is therefore negligent at best.
IT or course plays their part, but often, particularly around Practice Management, they shouldn’t be leading the project. They have their responsibilities, but generally, they shouldn’t be solely accountable for the business results.
If a firm has a CIO, they’ll typically be the link that bridges the ‘business side’ of a firm and the ‘IT side’. Ultimately they’ll take overall accountability for successful project delivery. However, most mid-sized firms don’t have the luxury of a CIO.
With that in mind, it’s often sensible to build project teams and boards to own the delivery of a project, such as including key stakeholders, relative partners, departmental representatives along with IT. This way everyone has buy-in, rather than pointing fingers, shrugging shoulders and saying the change was forced upon them.
5. Not checking the contractual details and deliverables
Lawyers, of course, pay attention to the contractual details around the general terms of business when engaging with a software vendor. However, they often forget to ensure that the contract factors in successful project delivery, in terms of clearly defining the deliverables at various stages of the project life cycle.
It’s critical to define the stages and key milestones of the delivery, typically alongside staged payments. This certainly helps focus the mind of the vendor and ensures that expectations are managed on both sides.
Vendors will often link payments to key stages of project delivery. However, these staged payments are not typically in place for the firm’s benefit, but rather simply to ensure the vendor is paid. It’s, therefore, a good idea that a firm leads in defining project deliverables and what the measurements of success are prior to signing any deal.
These need to be documented clearly, agreed by both parties and then form part of the contractual terms. Too often are firms left with a solution that doesn’t provide any advantages over the one previously in place, because they did not define ‘success’ at the outset.
Firms need to understand that they are entering into a long-term partnership with the software vendor when they select a practice management system. Contracts are typically multi-year so pay attention to the vendor’s obligations, the service level agreements and where additional costs may come from. This is more critical now that many vendors are delivering their services via the cloud and thus firms are getting multiple services from traditional software vendors, not just software licensing and software support.
Looking ahead
I understand that firms do not change their practice management system very often but, when they do, see it as an exciting stage of transformation. It’s a big business change project and the risks are significant. However, the advantages are also significant if managed and implemented correctly.
Your business’ Internet connection now means so much more than just being able to browse websites. So many programs, services and features rely on an Internet connection that if yours went down, you would feel an instantaneous impact.
Businesses constantly use the Internet to communicate with their clients, collaborate with colleagues and access cloud-based systems such as Office 365 and Salesforce. Using the Internet is so ingrained in our workday, there’s little you could do without it.
You couldn’t send or receive emails
You couldn’t access any cloud application services or files in cloud storage
You couldn’t access any websites or web services
You probably couldn’t use your telephony system
The only good thing which comes from an Internet outage is… well, there isn’t one.
How much does a lost Internet connection cost?
Internet outages cost UK businesses nearly £7 billion in 2016. Whilst that was a few years ago, don’t think the age of this stat makes you safe. This figure is set to increase year-on-year and so will now be something far higher.
The table below shows the impact downtime has on varying sizes of businesses based on both the productive time lost and the cost of an outage.
The results of the study investigating the cost of Internet outages
Businesses experience an average of 4.7 outages per year – each of which cost a mid-sized business an average of £3,644.
Internet outages are clearly expensive and so your business should be doing everything to prevent them. Luckily, it’s not difficult to reduce the chance of your business seeing an outage.
How to prevent an Internet outage?
Difference between broadband, leased-lines and 4G services.
Before considering getting two Internet connections, you must ensure your primary connection is the correct type for your business. There are three main types of connection:
Broadband – Generally only good for very small businesses. This is the same connection you likely have at home. Broadband connections share bandwidth with other customers meaning lower performance at peak times and fluctuating performance. Broadband typically has a non-existent Service Level Agreement (SLA). This means if you go down, you aren’t going to be a priority to the service provider. You may have an SLA in your contract, but they are typically valueless.
Leased line – Good for growing and medium-sized businesses, necessary for large businesses. A leased-line is a private connection which only you can utilise – guaranteeing consistent performance. SLAs for leased lines operate more rigidly – giving you better uptime guarantees and faster resolutions when issues occur.
4G Connectivity – Good for satellite sites or rural offices. 4G has become a popular solution for certain niche scenarios such as remote offices or areas where other options are poor or non-existent. Although good in principle, 4G services are typically not enough for full business operations – though they can act as a lifeline if a wired connection fails.
Getting a second Internet connection
Once your primary connection is suitable, the second step is to add redundancy to your Internet connection. Many businesses think a leased line gives them immunity to an outage. However, while you may still get limited connectivity during a wider network outage, you should aim for no loss of service at all.
Since we operate leased lines for many of our clients, there are a few best practices and common mistakes we’ve seen which you should be aware of when planning your own leased line.
The Last Mile Rule
The ‘Last Mile Rule’ states that the final mile of cabling which connects your business to the Internet should be physically separate between your two connections. This isn’t always possible due to external infrastructure and costs, but it’s worth aiming for.
Having the connections enter your office from alternate directions and cabinets means a physical disruption (perhaps caused by overzealous construction workers) only impacts one cable – allowing you to maintain connectivity.
To take it further, a secondary Internet connection should be run from a different telephony exchange – meaning that an issue at an exchange doesn’t bring down your connectivity.
Automatic switching
Manually reacting to an outage is not ideal. It’s stressful, confusing and results in unnecessary downtime for your business. Instead, you want to configure your connection to automatically switch over to the secondary circuit if the primary one is down.
Typically, this is achieved by intelligent firewalls or two carriers (ISPs) working in conjunction via a managed service.
It’s also worth considering using the second connection, rather than just having it sat idle. Many organisations push certain traffic over the secondary connections, such as backups or voice calls. Obviously, if the second line fails (often more likely) that traffic can just fail-back to the primary connection.
Diversify line providers
Rather than going straight to your current line provider for your secondary connection, consider diversifying to another provider instead.
In the UK, BT Openreach and Virgin Media are the two largest owners of cable infrastructure, so if you already have a connection with one, it’s worth diversifying into the other. This is so that if the network provider themselves experiences an outage, you don’t lose your primary and secondary connections because of it.
Another benefit to a diverse approach is that if one of the major providers goes down, you can be overwhelmingly smug that your operations keep humming along whilst your competitors are frantically putting out fires and incurring reputational damage.
What is the cost of two Internet connections?
The direct cost of a second Internet connection will vary depending on local pricing so research your providers. If an identical line is too expensive, you could consider purchasing a reduced capacity line instead, i.e. a broadband circuit to just allow critical services to run in a disaster.
Doing this ensures a primary line failure won’t completely take you down, but you may find it difficult to perform Internet-heavy actions. Consider how much bandwidth you use normally and your usage at peak times to help you choose a sufficiently effective backup line.
What is the ROI of a second connection?
A second Internet connection is a preventative investment, meaning you cannot calculate ROI in the traditional sense. Instead, look at how much money your business is losing from downtime, then map this against the cost of a backup line.
As medium-sized businesses typically lose £3,644 per outage and experience 4.3 outages per year, a secondary connection would save them £15,699.20 on average every year. This can be considered the yearly ROI.
To calculate this for your own business, use this simple downtime cost equation to find your cost of downtime then multiply it by the average length of your outages and multiply it again by your average number of outages per year.
It’s also important to not just focus on the hard costs. You also need to consider soft costs, such as reputational damage. If your operation was offline for 3 days (very possible) then how is that going to impact your reputation?
Does my business need two Internet connections?
This question is akin to asking, “does my business need to be accessible to clients and customers?” or “do my employees need to do their work?”. If you’re a micro-business, then you can probably get away with a single connection because downtime losses are minimal. But otherwise, it becomes not a question of if you should get two Internet connections, but when you should get your second connection.
Don’t make the mistake of thinking a disaster won’t happen to you. Too many businesses put off investing in their business continuity and then take a permanent blow to their reputation rather than enjoying business as usual. Don’t let that be you.
Switching IT support provider is not a decision to be taken lightly but it is often a decision born from necessity rather than from choice. The perceived pain of changing support providers often paralyses businesses – leading them to endure the inept service until things become too costly to continue.
Often, the incompetence of a provider becomes apparent immediately after their service begins, but it can also arise part way through the contract if something changes within their business. Worst of all though is when signs of incompetence are hidden or the business is unaware of what these signs even are.
Finding out if your provider is up to scratch is hard. Reviews can be faked and asking them will give an inevitably positive answer. But there are some red flags you can be on the lookout for which indicate it’s time to switch.
10 reasons you should switch IT support provider
1. They don’t deliver tangible business results
Your IT support provider should provide you with a measurable return on investment (ROI).
If their strategic consultancy consists of pushing the latest tech and something vaguely labelled as ‘the cloud’ or you can describe their technical support as ‘keeping the lights on’, they’re not worth the money you’re spending on them.
Additionally, if the ROI they deliver is defined in vague terms rather than strict measurements, it can signal problems. Whilst you may be “more available” thanks to that second Internet line they installed, what matters is whether they can tell you when it saved you from an outage and how much money you avoided losing due to reduced downtime. If they can do this, it shows they not only understand your business enough to provide you with these hard numbers, but they’re focused on the metrics which matter to your business and not just tech for tech’s sake.
For the most value to your business, your provider should also follow continual improvement frameworks such as ISO 27001. Without continual improvement, their strategic guidance will eventually become too diluted and you will be better off moving to a new provider.
There is an oversaturation of generalist IT providers on the market right now and whilst they might be able to fix your PC when it breaks, they’re unlikely to be able to advise on implementing a law firm’s practice management system or fuelling a manufacturer’s lean initiatives with technology.
To provide effective guidance, your provider needs to understand the challenges and opportunities available right now within your sector. That means they should be attending events and expos in your sector, hosting events relevant to your sector and speaking in your sector’s language.
At its simplest, it may be better to look at it from the other way around. If you’re in a regulated industry and your provider doesn’t understand your industry, their lack of awareness will prevent them from creating solutions that are even allowed to be implemented. And if they can’t do something as basic as that, how can they make changes which drive value for your customers?
A provider who doesn’t understand your business is fine for day-to-day maintenance since that only requires an understanding of tech. But for even a modicum of business value, you need a provider who understands your sector. If you get this, you’ll be able to form an IT partnership that motivates true business outcomes, driving you and your business forward.
3. They don’t take security seriously themselves
It’s genuinely alarming to see the number of IT support providers who are not cyber-secure. An immense amount of trust is needed between a support provider and their client and if a support provider isn’t covering their own security, that’s a grossly negligent breach of that trust.
If your IT provider isn’t following security best practices (Cyber Essentials Plus, patch management, zero-trust e.t.c.), then it’s best to leave before a disaster occurs. Imagine how angry you would be at your IT support provider if they left your client database misconfigured and allowed for those details to be stolen and sold by criminals. Now take that anger, multiply it by your number of clients and direct it at yourself. Not a fun thought.
Knowingly using an insecure support company makes you just as bad as them if something goes wrong. And when your clients get angry at you for leaking their data or the board demands to know who is responsible for the ransomware infection which took down operations for a week, they are completely justified in that anger.
4. They won’t accept responsibility
There is a shared responsibility between an IT support provider and their client. The support provider is responsible for understanding the client’s risk profile and ensuring systems are kept at optimal performance and the client has the responsibility to act on the advice provided by the support company and operate to the standards given through the provider’s consultancy.
If one party is not completing their responsibilities, then relationships can easily break down. When something goes wrong, clients are obliged to prove how they adopted the provider’s advice and operated to a certain level and providers are obliged to explain why things went wrong, how it’s being fixed and how it will be prevented in the future.
If whenever something goes wrong, they instead blame you (and you have taken their guidance) or indicate it’s not their problem or refuse to offer solutions whilst insisting the fault lies with someone other than themselves, it’s time to move on.
5. They focus on contractual details
All good IT support providers know that when their clients are successful, they are successful. So, if you often hear “we don’t cover that” or “that’s not in your contract”, it indicates they aren’t interested in supporting your business or they are incompetent.
Of course, if you signed on for a contract that specifically doesn’t offer support for phone lines, don’t expect them to help you with your phone lines. But if they treat their relationship with you as purely transactional rather than as a partnership, it’s an indication you should switch.
For edge cases, a good provider will lean on your side and assist with the issue since they understand the importance of building their relationship with you. Providers who abide by strict contractual details are often the ones who only see your business as a source of monthly recurring revenue instead of as a partner and so would only see this help as an ‘expense’.
6. You have outgrown them
If your business goes through a period of rapid growth, it’s possible to become too big for your current IT support provider to handle. Since the alternative is purposely stagnating your business to let your provider catch up, changing support provider is the obvious course of action.
It’s not easy to measure if you have outgrown your provider. But judging by how you’re currently reading an article about switching providers, it’s possible you’re already at that point. There are a few things to look for which indicate you’ve outgrown your provider:
They are falling behind on tickets and are starting to miss SLAs
There’s less confidence in the support provider amongst your staff
They aren’t helping you with your IT strategy anymore and are solely focused on fixing problems
Their strategic guidance looks at things from too much of a narrow viewpoint
If you’re seeing any of these, it’s possible that your provider is unable to effectively manage the requirements of your business. If that is the case, it’s time to switch.
7. They talk tech
It’s easy for someone without a technical background to get overwhelmed by the acronyms and terminology used by IT support companies. If your support provider is speaking in tongues, it may be time to get an exorcist, if they’re talking tech though, it may be worth looking for an exit.
Tech for tech’s sake is what brought about the downfall of Business Intelligence in the 80s and 90s and so any provider who is still pushing the latest shiny gizmos is either still stuck in the 90s or hasn’t learned that what businesses want is results, not new hardware.
Your IT support provider shouldn’t just be speaking in the language of business though, they should also be talking the language of your sector. If they understand the unique risks and rewards your business has, they will be much better equipped to deal with those and create optimised solutions.
8. You aren’t learning
When was the last time your IT support provider told you that you were wrong (and not in the “you don’t get tech” way), explained why and then helped you create a better outcome with their guidance?
Have they ever done that?
If you aren’t learning by working with your IT support provider, they either aren’t challenging you enough or they don’t know any more about technology than you do. In either case, you should consider switching to a different provider.
Innovation only comes when the status quo is challenged and so if your support provider isn’t bringing new ideas or thinking of ways technology can help you exploit opportunities in your sector, you’re likely to stagnate.
It’s key though that the things you are learning are relevant to your business. If your provider is just going too in-depth with tech then that comes back around to point 7.
9. They’ve been bought out or merged
The acquisition of your support provider by another company should put you on high alert. Not only will there be a period of disturbance during the merge, but culture, leadership, pricing and SLAs can all shift – leading a drastic change in the quality of the service you have come to expect.
With the sudden convergence of the two providers, you may also find yourself becoming a lower priority client – further impacting your response times and availability of resources.
Shortly after a merge is also a common time for members of the leadership team or founders to leave the company. If this occurs, you may find for example that the CEO who prioritised long-term relationships with clients is replaced with one who prioritises short-term profits instead.
If after a merger or acquisition of your support provider, you find yourself dissatisfied with the service, it’s time to look for a new provider.
10. They’re much cheaper than the competition
This may seem like a reason to stay with your provider, but it absolutely isn’t. IT support is not a commodity where each offering is identical, it’s a knowledge-based service and therefore follows the rule of cost = quality. Saying you have the cheapest IT support just means you have the worst IT support.
If your IT support provider is the cheapest on the market, ask yourself what corners are they cutting to reduce prices? Of course, you have a budget to keep in mind, but when you’re presented with a cheap break-fix provider and a more expensive proactive supplier, don’t immediately discount the latter based on flat costs.
What next?
It’s unfortunate to see that 69% of businesses change support provider every year. This raises serious concerns because without a long-term relationship, how can a company get genuine results and coherent strategic guidance from its IT provider? The relationship between a company and their support provider has to be forged on partnership. But this statistic indicates support providers aren’t doing enough to create value for their clients.
If you think it’s time to review your provider, we believe you should choose a new one who is able to engage for the long term.
There are a few factors to consider before choosing your new provider though. Location, sector focus and service scope.
Location
This used to be one of the most important factors to look for, but modern support providers can fix most problems remotely. What’s more, having the ‘IT guy’ swing by each morning to see if anything is broken is a sign your provider lacks proactive maintenance and monitoring capabilities, rather than indicating anything good.
Whilst it’s wise to keep your support provider local enough to send an engineer in an emergency, you no longer need to limit yourself to just providers in your town, city or even county.
Sector focus
This is now a far more important factor when choosing a provider. With a glut of generalists on the market, if a support provider focuses on your sector, you should give them real consideration. Their specialist knowledge and experience make them much better suited to assist your business and their connections to people in your industry may provide additional benefits.
Service-scope
Finally, service-scope means what the provider defines as IT support. If the provider defines IT support as fixing things when they break, they aren’t worth your time or money. If they define it as keeping systems running and always in peak performance, they might be worth consideration. But if they define it as keeping things running, always in peak performance and backed by an ongoing strategy, you’ve hit gold.
If you’re searching for a better IT support provider, our Total Service package provides the comprehensive support and consultancy you’ve been searching for. If you’re not quite ready to make the switch yet, book an online review to discuss your challenges with us.
It is well known that inefficient operations reduce margins and weaken your competitive position in the global market. It is also well known that manufacturers are famous for their dedication to cutting out inefficiencies wherever they can in their operations.
But whilst the shop floor has received the benefits of technologies such as robotics, softer practices such as visual management and initiatives such as lean, manufacturers’ dedication to optimisation is seemingly contradicted by how many of them have forgotten to apply the same fervour to another key area of their operations: the back office.
This is the Optimisation Contradiction.
Why should you optimise the back office?
What happens in the back office doesn’t stay in the back office. Inefficiencies here directly counter the rewards of your wins on the shop floor and since inefficiencies are often allowed to build up, their counterproductivity is multiplied.
As an example, there’s little point holding the shop floor to incredibly high-efficiency standards if at the same time as much as 68% of the paper being printed in the back office is unnecessary. Imagine if there was a 70% material wastage on the shop floor. That would be unacceptable.
So how can you make your back office a productivity powerhouse like the shop floor? We believe that through the intelligent application of IT, it’s not just possible but it provides additional opportunities to improve your firm.
How to make IT deliver an advantage in the back office
1. Embrace Software as a Service
Monthly instalments will give you more control over your IT budget, better-optimised software and often live support to assist with overcoming roadblocks. All of which keeps operations in the back office running smoothly.
However, there is some ill will towards Software as a Service (SaaS), as many manufacturers see subscriptions as more expensive.
The issue with this mindset is that it looks at the software in a static point of time and ignores the continual updates and support SaaS applications have. When you buy a one-off piece of software, you get what it is and nothing more. Any bug fixes, feature updates or integrations will need to be acquired separately, either as an add-on or as part of the next major release. When you buy software on a subscription, you get continual updates and new features as standard.
2. Categorise and control your talent
To complete work effectively, you need people with the right skills in the right place. This might seem obvious but so many firms fail to assign their talent optimally – probably because they’re trying to assign 100 people with different skillsets to 20 tasks which require different combinations of these skillsets. It’s impossible to do in your head but IT systems excel at this sort of thing.
With a talent management system, your HR team can see exactly the skills each employee has and therefore allows you to intelligently recruit whilst controlling and developing your existing talent. Employees also gain visibility into their training program – resulting in greater engagement.
By managing your talent pool this way, it leads to a better-skilled workforce, better allocation of these skills and an overall more engaged and efficient workforce.
3. Optimise processes with ISO
Every manufacturer should have already strived to ensure their shop floor processes are to ISO standards, but few turn their sights to the back office once this goal is achieved.
In the back office, ISO 22301 and ISO 27001 are the two key accreditations.
ISO 22301 is about minimising IT downtime and ensuring data integrity with redundancy and network resilience, and backups and encryption.
ISO 27001 is about securing your assets (personal information, intellectual property e.t.c.) through policy, software and hardware with the aim to prevent an intrusion or breach.
If you do decide to proceed with accreditation, an external consultant can help you to identify and resolve any weaknesses before the assessment process. Once you’re adhering to ISO principles and have become ISO certified, you’ll not only be far more resilient against disruptive incidents which threaten your efficiency and productivity but it’ll be easier to pick up business since it’s proof of your dedication to continual improvement.
4. Secure your position
In March 2019, Norsk Hydro – a global manufacturer of aluminium – was hit by the LockerGoga ransomware. The malware spread from the back office into networked machines on the shop floor and ended up impacting global processes, forcing the company into manual operation mode. Overall predicted losses were £41.2 million.
To put this into perspective, Norsk’s quarterly sales volumes for Extruded Solutions were 333,000 tonnes. Factoring in the losses equates to an increased unit cost of £123.72 per tonne or 12.4 pence per kilogram. Cleary a massive hit to the bottom line.
Cyber-security in the back office should now be important for obvious reasons. But despite being essential, some companies negligently assume they can get away without basic security in place. Typical areas of negligence are multi-factor authentication, patch management and rights management – the lack of even one of which instantly compromises the optimisations you’ve worked so hard for, not to mention endangering your reputation.
If you want to improve your security posture but don’t know how then Cyber Essentials accreditation is a good place to start. You’ll need to go beyond this since it only addresses the basics so something like ISO 27001 should be your true goal since it’s much more robust.
5. Digitise and automate
Another clear sign of the Optimisation Contradiction is that whilst manufacturers have strived for 100% automated shop floors in their quest for efficiency, they have at the same time forgotten to automate and digitise even the simplest tasks in the back office.
For example, even something as simple as obtaining a signature requires a long, physical process. First, you would need to print and hand over the paper for the person to sign. Then, scan the document to send a digital copy to the requester and shred the physical one for security. Finally, upon arrival, the digital signature would be stored in a safe location. With e-signatures, you can remove the physical processes of printing, sharing and shredding.
Automation can also help tackle highly repetitive or routine tasks in the back office, to free up time for more strategic, value-add work. By implementing automation in the back office, you should see more KPIs being hit and a more efficient workforce overall.
6. Modernise legacy systems
The general rule for hardware is you should refresh laptops or PCs every 3-5 years and servers every 4-5 years. Whilst it’s tempting to sweat IT assets, the lost efficiency and increased volatility means doing so will likely cost you much more than you ‘save’ by not upgrading.
Updating hardware allows back-office workers to work much faster. Less waiting and more responsive systems result in more streamlined workflows and therefore higher employee uptime.
But it’s not just the raw speed and efficiency values to look at. There’s also the matter of reliability. As hardware ages, it rapidly becomes more prone to failure. A study undertaken by Google revealed that one-year-old hard drives have an average failure rate of >2%. A figure which quadruples to 8% by the time the hard drive is two years old.
The wasted time and potential for data loss due to ageing hardware is something to bear in mind when considering the cost of an upgrade. Ask yourself if you can afford to spend time recovering or recreating key data and then decide whether you should upgrade to current hardware.
7. Make things lean
Much like the ISO standards, lean is something many manufacturers already apply to the shop floor, but you can gain similar benefits in the back office. By managing the IT systems in use, eliminating excessive bureaucracy and redistributing talent and resources, you can create major improvements to efficiency.
Lean in the back office ranges from small changes such as moving the office printer into a more ergonomic location to undertaking upgrades to IT infrastructure and setting up a rolling upgrade cycle for hardware.
Performing a thorough analysis of back-office functions against lean can give you valuable insights into where problems are arising, allowing you to make genuine process improvements and cost savings.
Below is an infographic to help you with applying lean in the back office.
In summary…
To truly improve the efficiency of your firm, you need to be directing attention to the processes and systems both on the shop floor and in the back office. It’s easy to think that processes not directly related to production have no influence on efficiency, but they do.
Here’s an important question for you: Do you only eat your lunch after having died from starvation?
You will have likely answered “no” to that question, so here’s another one for you. Do you only fix your IT issues after they cause damage to your business?
You probably said “no” again. But unless you’re using proactive IT support, you should be saying “yes” instead because this is exactly what you’re doing. Waiting until the worst has happened before addressing a problem.
What is reactive IT support?
Reactive support (sometimes called break/fix support) is where the focus is on fixing IT issues after they occur, instead of preventing them from occurring in the first place.
For a long time, reactive support was the only type of IT support possible. But with modern analytics and systems management tools, better monitoring and even the rise of AI-enhanced predictive models, proactive support is now not only possible but widely available.
Yet despite the proactive model being available, many businesses continue using reactive support – often unaware of the damage it’s causing them.
Their choice of IT provider is most often to blame since the cheapest support rarely offers even a hint of proactivity. Instead, cheap providers favour the legacy break/fix approach as it allows them to get better margins on their clients.
Why is a reactive approach not good enough anymore?
1. Leaves the core of the business vulnerable
IT is vital to every department and process within a business. So, if there’s a problem with IT, there’s a direct business impact. This can range from being a simple inconvenience right through to a complete halt of operations. Accompanied by the typical reputational damage.
With a reactive approach, these problems both large and small can arise far more often. This isn’t necessarily because reactive support is worse at fixing problems, but because reactivity is worse at dealing with them.
With a reactive approach, an issue needs to be actively causing pain before it’s addressed. And this results in far more issues reaching employees.
Compared to the proactive approach’s continual improvement mindset, reactivity is also lacking. For a start, a reactive approach has no way to stop issues before they begin impacting the business. Reactivity also lacks the ability to apply past experience from one client to another. Eliminating most common issues completely.
With so many things going for proactivity, it seems like it should be the default. But it’s an approach that many IT providers only pay lip service to. Only with a focus on continual improvement, along with ensuring all systems are proactively monitored can an IT provider call themselves proactive. But once they do, many problems can be fixed long before their effects become visible. Reducing potential damage and minimising employee downtime.
By the time a reactive IT support provider begins addressing an issue, your customers or clients will already be feeling the negative effects. Perhaps a crypto-jacking infection on your web server is causing your website to become unresponsive, locking out customers. Or a failed piece of hardware has meant critical client assets are lost. These sorts of issues occur far more often with a reactive approach in place and can have major ramifications for your business.
The largest of these is that outages = lost clients. We live in a time where every business is commoditised. So if you experience frequent issues due to reliance on reactive IT support, your clients can and will switch to your competitors.
Additionally, if you have SLAs with clients, failing to meet them due to a spotty service can have direct financial repercussions. But needing to compensate your clients will not cost you a great deal but will also erode trust, resulting in further problems.
3. Allows issues to grow out of hand
With a reactive approach, issues are only fixed once they’re having an impact on your business. This means that a problem which has no immediately visible impact can go unnoticed until it’s far too late. Here are a couple of examples of the sort of things which can go wrong.
A few hours before going out to meet a prospect, a director’s laptop locks up with a message stating she must pay a ransom to unencrypt her data. Clearly the victim of a ransomware attack, the director is dismayed to find it has encrypted the files she needs for her meeting.
Upon recovering the files from their nightly backup, the company finds that the latest snapshot was actually several weeks old. The nightly backup had been encountering an error and failing each night. Without proactive monitoring in place to spot this issue, weeks of data were lost including the files she needed for her prospect.
On Monday morning, the finance department finds they can’t access their finance software and are all seeing an identical error code. Upon calling their reactive support desk they discover that the error code means that the software’s licence key has expired. It takes a day to renew the licence key and costs a considerable amount to do so. Due to no proactivity in relation to managing licenses, a whole day of productivity is lost and the unexpected cost takes a chunk out of the department’s budget.
A final point here: with a reactive support provider, there’s no guarantee that an issue fixed once is fixed for good or across all systems. Without proactivity, the same issue can arise many times, needing to be fixed from the ground up each time.
A proactive IT provider will instead flag the example issues as non-conformances due to their impact. Then, by putting controls in place, they would ensure that the issue won’t happen again not only for the affected client but for any of their clients. This prevents wasting resources on readdressing issues whilst also ensuring you’re always becoming more resilient to issues.
4. Blind to vulnerabilities
When most businesses think of cyber-attacks, they think of ransomware or DDoS attacks, both of which are very visible. But, most malware is designed to stay hidden on a network for as long as possible. Stealing as much data as it can or working its way up the chain of permissions to execute a catastrophic blow.
With the average compromised system staying undetected for 146 days, having no active monitoring due to reliance on reactive support is a dangerous choice to make. By leaving yourself blind to hidden vulnerabilities due to a lack of active monitoring, the impacts of a breach can also become far worse.
Hidden spyware can steal more data, resulting in more affected clients and a larger GDPR fine.
Hidden ransomware can move further laterally across the network before striking. Increasing the number of files locked and the ransom cost.
Hidden crypto-jacking can wear down hardware and reduce employee productivity for longer.
Hidden viruses can establish themselves far deeper within a device. Increasing the time and money required to remove it.
Lacking proactive monitoring and system vulnerability scanning allows these threats and more to stay on your network for far longer. Putting your business at a much greater level of risk than it needs to be. But with proactive monitoring and regular vulnerability scans, you can identify these risks and remediate them far quicker.
5. Normalises failure
When using reactive IT support, issues will often be common, recurring and irritating. The sheer volume of these small problems can easily overwhelm employees, causing them to either just get used to it or leave the company. Neither outcome is ideal.
In the case of employees who leave, a replacement must be found and retrained. But even after this, they will still have a chance of leaving the company for the same reasons.
Considering that the cost to replace a well-trained employee can exceed twice their yearly salary, high turnover can be catastrophic for your cashflow.
As for employees who get used to the issues, they may end up causing you more financial damage than those who leave…
6. Kills efficiency
With a reactive approach, each small issue needs an employee to take time out of their day to deal with it, instead of it being pre-emptively resolved.
Whether through having to call the reactive service desk or from reduced productivity whilst dealing with the issue. Even only a few minutes of disturbance per issue can make the wasted time mount up.
For example, if each small problem takes 5 minutes to identify, diagnose and fix and each employee experiences only one issue per day. A company with 40 employees will lose 16 hours and 40 minutes each workweek.
Extending this over a month, the company will lose 66 hours and 40 minutes. And over a year, 800 hours will be wasted. The same as having an employee lay on the floor all day, for 100 days whilst on full pay.
It’s also worth remembering that without proactive management, the same issues can keep recurring. From this, it should be easy to see how lost time can pile up, causing a significant impact on a business’s operations.
7. Proactivity is possible
This list could have consisted of this point alone because the simple fact that proactivity is possible should be enough of a reason to change to it. However, this wouldn’t have been very informative to you, the reader. Nor would it highlight the potential dangers of continuing to use the reactive model.
When comparing the two models, it’s not even a matter of weighing up the pros and cons. The proactive model is a direct upgrade. For one final analogy, it’s like determining whether to use a Palaeolithic hand axe (see: sharp rock) or a chainsaw to cut down a tree.
It’s also worth noting here that many IT support providers sell themselves as being proactive when in truth they’re not. It may be that their monitoring is proactive or one part of their operations. But this alone does not mean they are proactive.
You should aim to understand how your IT system is managed since this shows you what gains can be made with some quick initial changes.
If you don’t know what a CIO is, or want a refresh, check out our existing article on the role of a CIO. Since this article is aimed at businesses who are aware of what a CIO is but want to know if they need one, we won’t be covering it here.
Does my business need a CIO?
A widely held notion is that only large, multi-national corporations need the service of a CIO. This may have been true a decade or so ago, but with IT now central to the whole business it’s no longer the case.
So then, if every business can have a CIO, how do you know if you need one? Here are some key indicators you can look for which show you’re ready for a CIO:
1. You lack the information to make business decisions
When there are plans to make a change in the business, a lack of data and information can plunge even a good idea into uncertainty. Lacking the knowledge for major IT-related business decisions results in project delays. And when the time does come to choose, it’s a decision made on the promises of a salesperson rather than on proven facts.
These factors often limit the scope and effectiveness of projects. Resulting in a lower value or poor performing outcome.
A CIO helps by de-risking the decision-making process. By using their knowledge of technology and the wider business, they can find a solution that has its base in hard facts and proven performance, rather than going by guesswork and hope.
The CIO also gives an amount of certainty to making IT-related business decisions. This can help drive change and adoption, giving you an edge over your competitors who may be uncertain about how to review and apply new technologies such as AI or initiatives such as process improvement and automation to their business.
2. There is friction between departments
When one system or department’s poor performance and operations restrict the ability of another department to get work done, animosity and frustration can arise. This friction is often made worse by siloed departments. This causes rifts of communication, priorities and strategy to form and makes employees feel like they are fighting against their co-workers to get work done.
By being a mediator who ties together the IT and operations sides of the business, a CIO can help reverse this friction. Producing a unified strategy and operating environment means employees will be working towards a complementary outcome. And since everyone will be working in tandem, the likelihood of bottlenecks forming is also reduced.
Finally, because the CIO is in a neutral position, not aligned to any specific department they can be an impartial judge over which department is in the most need of IT resources and systems.
By relying on the facts and listening to each case, they can determine whose requests and priorities to address first. Rather than having each department claim that they are in the most need.
3. There are regular complaints about IT system performance
When constant IT issues are occurring, employee performance will decrease. For a 40-employee firm, even five minutes of disturbance per employee per day will waste over 16 hours a week.
A CIO will listen to the complaints being made and use their knowledge to identify and address the root of the problem. Be that through their own team, a service provider or a software vendor.
This not only minimises employee’s frustrations but it also improves their efficiency. Making a difference to your bottom line.
A CIO can also help you understand where issues might arise in the future as your business grows. They have the expertise and experience to know when you’ll meet friction and pain from an IT or operational standpoint. Allowing them to smooth out the road before you get there.
4. The business is going through a period of change
When your business is experiencing change (moving premises, going through a merger or acquisition, moving to the cloud, expanding teams, e.t.c.) there can be uncertainty around the potential threats which arise and unseen opportunities which pass by. Large scale change in the business’ use of IT can also create unease from a strategic standpoint.
A CIO has the experience, skills and expertise required to get things done in this situation. And thanks to their knowledge of both IT and business, they’re able to take advantage of the opportunities and mitigate the threats which may arise during a period of change.
5. You don’t understand the benefits IT can bring / You see IT as a necessary evil
When a business sees IT as a necessary evil, it’s inevitable that they’ll commit the least money, time and effort towards it. But businesses which do this only end up handicapping themselves since IT is not only ‘a cost’. Instead it’s the main area where you can gain a competitive advantage in the modern business arena.
The ‘IT is a cost’ mindset arose in the early 2000s due to a decline in business intelligence and a lack of understanding in what IT is. Investments were being made based on trends and hype, not fact. And when people were burned by their mistakes, it leads them to think of IT as a waste of resources.
The CIO helps bring back the business focus and knowledge that so many businesses have lost. Allowing IT to once again become a performance enabler.
When there is no interest, there is no innovation.
There needs to be someone on your board who is excited about the potential of IT. Without this momentum, you risk projects being put on the backburner or dropped altogether. Slowing your pace of innovation, or even causing stagnation.
So in a world where you either innovate or go out of business, the CIO’s interest and proven experience in technology are vital.
By staying abreast of the latest trends and opportunities a CIO can ensure you’re always getting a business advantage. And with their understanding of the business applications of IT, new technologies and systems can deliver improved business processes and productivity. Giving you a competitive edge.
How big of an investment is a CIO?
To hire an in-house CIO, you can expect to be paying a salary of ~£150,000 per year. And for a highly qualified candidate, up to £240,000 per year – almost a quarter of a million.
A CIO’s salary is likely to eclipse that of any existing senior IT employees you already have such as an IT Director or Chief Technology Officer. It may also surpass many of your other C-level executive’s salaries as well. This is because the role demands a blending of technical and business knowledge alongside at least a decade of experience in similar roles and so employees can command a premium for their employment.
If you’re unable to part with this much cash or are already concerned about cash flow, you may now be thinking that a CIO is out of reach. Fortunately, there’s a second and increasingly popular route: a CIO service.
Because a CIO service has many clients, you get to benefit from the economies of scale which allows prices to be much lower on average.
Combined with how you only pay for the time you use their consultancy, rather than a yearly salary, a CIO service will typically be far more accessible than an in-house employee; all whilst offering the same benefits.
With the evolution of cloud platforms in recent years, I find that companies are now more seriously considering relocating their on-premises IT infrastructure into public or private cloud in order to realise operational efficiency and cost benefits. A key part of such an infrastructure is likely to be the company file system. On the face of it, this may seem like a very simple infrastructure component to migrate but there are some key areas that should be considered and planned prior to undertaking the migration.
1. Choose your cloud carefully
Essentially, you have the choice of public or private cloud. You would likely want to consider ongoing running costs and security features of each cloud-based solution. Beware of some cloud-based solutions that will charge for not only storing data but its transfer as well – they could lead to very high ongoing costs. Consider enhancing access security with multi-factor authentication – after all, your company files are likely to contain confidential/sensitive information. Also, be mindful of the limitations of the cloud solution – for example, file permissions from the source system may not be maintained or files stored in a long nested path/with long file names could be problematic during a migration process.
2. Consider your file characteristics
If you are predominantly working with large files then you may find that only moving your files into a cloud-based solution could cause operational difficulties due to the slow opening of remote files. This would in part be down to your available internet bandwidth. Typically, standard office files work well when accessed from remote cloud storage environments but larger files (videos etc) may require additional cloud service features such as streaming, to make access to them efficient.
3. Evaluate your business systems and processes
Since file systems are core to most businesses, it is likely that there will be other internal (and possibly external) business systems and processes that interact with the current file system. These should be assessed to determine how the file storage system could be migrated into a cloud-based solution without negative impact on other internal systems and processes.
4. Assess how company staff need to access the files
A cloud-based storage solution probably makes file access more flexible in terms of not being tied to specific locations when accessing the files but it also may change the way that staff have to access the files. For example, staff may be used to accessing files via a mapped drive and a cloud-based solution may be web browser-based. Carefully consider how this could affect operational efficiency as staff learn a new way of working.
5. Plan DR and Business Continuity
Most businesses have an operational reliance on their file system. If you migrate these services into the cloud, then it’s important to consider things like office Internet connectivity resiliency and how the cloud-based file system can be backed up / recovered in the event of a disaster along with what inbuilt resilience the cloud solution offering may have. This will help to ensure minimum business disruption.
With careful solution selection, planning and preparation before implementation – a migration of file storage systems to a cloud-based solution should provide optimum cost and operational efficiency benefits with minimum business impact.
