The best way to quicky craft and easy and winnng IT Strategy without making bad Choices and being stuck with inadequate IT Infrastructure
In the First Post of this mini series, I have shared how to transform Data into Information and how to easily get started right away with very little costs. You can read it here if you didn’t read it.
The second challenge people were discussing is that they know the strategy of their organization is less “Predictable” than ever and this won’t change. On the contrary, this will accelerate.
New needs, that are still unknown today, can become a priority next year.
Several reasons were discussed:
- Developing new Products / Services
- Needs to scale-up fast
- Being part of a Joint Venture / Partnership or even an M&A
- New Technologies to integrate in the workflow
- More security / regulations issues and needs
- …
Accelerated Strategy and Opportunities will impose, more than ever before to “Keep Control” on both IT-related Costs and IT-related Needs to make sure the organization can develop or shift its strategy and take advantage of these new opportunities or manage those new constraints.
First, as a “Strategic Thinker”, the IT Manager will not only promote tools and systems to help value creation but will actively work hand in hand with the CFO and CMO to help find the best cost effective solution.
The conclusion?
Shift from a Spending CAPEX / Investments to more Predictable OPEX
Here are the few arguments that gathered most of the consensus in any presentation that were given:
- OPEX are easy to budget and have a double advantage: They are directly impacting the P&L costs (which helps to make better economic decisions) and they are compatible with the imperfect knowledge of today about tomorrow’s uncertainties (which is gives more decisional flexibility and freedom while minimizing risks). Near terms needs are always better managed than long term forecasts… That’s that simple and even more relevant in today’s world.
- The Cash should be freed-up for investing in initiatives driving Revenue and Profit growth. IT Infrastructure, like Offices and Buildings, will not be on the Capex lists anymore.
- OPEX, being more transparent, shortens the Decision-Cycle in a dramatic way and let a company being more reactive and act fast with opportunities.
- Pay-per-use, Pay-per-Capacity, Pay-per-User, Pay-per-Service, … is the way to go as it should be seen as a Software or Infrastructure Mutualization among a much larger market. This helps to drive both the costs and risks down.
- It’s easy to Scale-up fast AND to Scale-down when needed.
- But there is more: the more users and the more needs, the faster those “shared” services and infrastructure can be developed, upgraded… The “Faster, Cheaper, Better” strategic advantages are reinforced when you have 1 system gathering 10.000 users versus 10.000 using their own systems. Competitivity is a natural result of that approach.
- Finally, a last but very important argument was presented and discussed. This isn’t only a CAPEX vs OPEX thing: the buyer shifts the responsibility for actual results to the Service provider. It combines “pay-as-you-go”, the reduction or elimination of capital equipment, well defined shorter-term commitment and no risk of longer-term decision based on guesswork.
The 2nd Rule impose to face unpredictability while keeping “Control”.
Strategic IT Managers embrace more and more the “Paid-for-as-a-service” not only for Software but also their Infrastructure. The Cloud being a good example. SaaS another. Both will become the norm going forward.
This way of looking at the IT environment makes it very affordable, with no Capital outlay, it’s flexible enough to scale up or to scale down, it minimizes risks whilst allowing to stick to Strategic needs.
In my next Post I will review how to manage any “IT Legacy” and decrease their “Complexity” as they grow with new systems while starting from the existing situation.
Once more I will share with you some very insightful best practices I gained with leading CIOs who are already successfully implementing these solutions.
Leave a comment or ask a question here below. I will answer you and provide even more information.
Best regards
Valéry Guilleaume
CEO and Founder of Nodeum
