By Heinan Landa
It happens all the time: leaders of organizations ask me how they should be spending their IT budget. My response? IT budgeting has always been both a philosophical and practical discussion. Does your organization view IT as a need or as an advantage? Is it a competitive tool or a necessity? As indicated by the positive forecasts in IT spending and
direction, it seems that most organizations are realizing the value of technology as not only a way to sustain revenue, but to grow it.
In 2013, the two IT areas organizations are most readily investing in are cloud technologies and strategic IT consulting. The latter—and its speedy rise to market—is the subject of much confusion. Below I explore what it is, who's investing in it, and how you can identify a qualified strategic IT consultant.
What is Strategic IT Consulting?
Strategic IT consulting, or strategic technology consulting, is the practice of analyzing your IT environment from a business perspective. It is the guided process of asking the questions: Is my IT supporting my organizational goals? If not, how can IT be transformed into a business driver?
How did it rise to such prominence?
Strategic IT consulting, as a practice, has been around for a long time. However, three factors contributed to the rise of this service into market prominence.
1. Market Pressure: During the recession, organizations were holding off on critical technology purchases for a significant period of time. When the economy began to improve, many companies were able to plan for equipment upgrades or replacements that were impossible during the economic downturn. But, the organizations saw the price tag of their technology upgrades increase dramatically because they had held onto aging systems longer than recommended. The size of the investment warranted outside counsel; executives wanted to make sure the money was being spent in the right way and the project was executed properly. All of a sudden, there was a significant market demand for strategic technology consulting.
2. Pace of Technology: In the last five years, the pace of technology has advanced more rapidly than it has in the past 20 years combined. Technologies travel from new and untested to "standard" in record time. With this accelerating pace of technological change, an increasing number of executives need help sifting through the available technologies and making informed decisions.
3. Awareness that Technology is a Competitive Advantage: In the last 3 to 5 years, the business community has become aware that technology is a competitive advantage. According to The Financial Times, approximately half of the CFOs in the U.S. that were surveyed increased their IT influence and allowance. Forty-four percent of CFOs said that their influence over IT investments has increased since 2010. They are responsible for IT decisions and have a higher understanding of just how important the IT department is to the overall health and success of the organization. In addition, PCWorld reports that corporate boards are prioritizing IT spending as highly as investments in sales operations. Sixty-four percent of companies reported making a proactive shift to invest more money in their internal and outsourced IT resources. The increasing participation of C-level executives in the IT arena illustrates a shift in thinking about IT as a necessary cost to a business advantage.
How can you be sure you are picking a credible strategic IT consultant?
Almost every IT company has created consulting services to meet the market demand. Not all of them are qualified to advise on strategic business technology direction, however. Below are a few factors to consider when evaluating the strategic IT firm with which you want to work.
• Business Background: IT expertise does not a strategic IT consultant make. Does the firm you are considering have executive-level business professionals on staff? Do some of their professionals have an MBA or equivalent? You, as a business person, are in a prime position to observe what questions they are asking and if these questions suggest a depth of business knowledge.
• Technology Background: How long has the company been in business? Do they have specific expertise working in your industry, serving organizations with similar challenges? Will they make their case studies and references available to you?
• Interactions: During the sales process, evaluate your interactions with prospective firms. Do their questions suggest a high level thought process that demonstrates an understanding of your specific organizational challenges? Are they adding value and demonstrating strategic successes?
• Instinct: Part of making any decision is following your gut. How do you feel about the firm? Do you think they are sophisticated enough to elevate tech support to a business function or are they more concerned about fixing your server or pushing the latest tech trend on you? What are they recommending for your organization and does it resonate with you?
What should you look for in the strategic IT consulting service deliverable?
• Translation. Your strategic IT consulting firm should be able to explain technology as a business advantage to your senior leadership in ways that make sense.
• Business Process Improvements. Recommendations on how the proper use of technology can provide process improvements and competitive business advantages.
• Objective Perspective. Objective, wide-angled perspective (not incentivized by vendors or partnerships) to help you think through business technology decisions involving disaster recovery, backup, business continuity planning, and more.
• Benchmarking Against Industry Best Practices. Identification of additional technologies and best practices being used in organizations similar to yours, evaluation of how your systems technologically measure up against competitors.
• Technology S.W.O.T. Analysis. Analysis of your organization's technological strengths, weaknesses, opportunities, and threats in an effort to identify new technologies for cost savings, operational efficiencies, and competitive advantages.
• Policy and IT Governance Assistance. Assistance in drafting policies that mitigate risk, reflect corporate goals, and encompass industry best practices.
• Project Management, Coordination, and Staffing. Comprehensive coordination and management of projects involving external and internal technology staff, partners, and vendors.
Last Word…
In general, organizations should be spending 3 percent of their revenue on IT. If your company is in an aggressive growth mode, or trying to catch up from severe cuts to the IT budget during the economic downturn, that number increases to 4 to 7 percent. This is a lot of money, and you need guidance on how to spend it prudently because wise (or unwise) technology investments have a disproportional impact on organizational productivity and effectiveness.
Information technology no longer operates in a silo; instead it is a strategic business driver. As such, it is imperative that your firm not only elevate IT consideration to an operational and strategic level, but choose the right partner that will help you to do this most effectively.
Heinan Landa is CEO of Optimal Networks, a Rockville, Md.-based IT support and strategic consulting firm. For more than two decades, Optimal has helped approximately 500 clients navigate the ever-increasing changes in technology to make sure their technology supports their organization's success. For more information, visit www.optimalnetworks.com.
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