Based on research commissioned by BNP Paribas Leasing Solutions, Rob Bamforth, Principal Analyst at Quocirca, discusses how to spread the cost of strategic IT investments without missing out on the value of doing it right.
It appears from a fair amount of macro economic data that the UK is moving into a period of growth after a significant period of downturn since the financial markets crisis in 2008. There may be doubts as to whether this is a sustained or balanced recovery, or even a blip before drifting downwards again, but either way, many organisations are now facing the effects of a significant period of under investment in their IT and communications infrastructures.
Some will have been playing a game of 'wait and see', assuming that things might become clearer. Others may have simply been focused on keeping systems running with limited resources and staff. The reasons are now relatively unimportant, but the consequences do need to be addressed as the evolution of technology products has continued unabated. So, whether preparing to take advantage of new opportunities and markets, or having to cope with further downward pressures, many will be finding their IT and communications systems will require some sort of overhaul.
Tight budgets might have acclimatised many to trying to make incremental or tactical improvements to existing systems, architectures and business processes. This approach can work for a time, especially when IT innovations fall into the well-worn categories of small, faster or cheaper. However, many recent trends have been far more disruptive, bringing consumer attitudes into the working environment, blurring the boundaries between work and home, and connecting just about anything, anywhere to the Internet.
Many now require organisations to make a step change in their use of IT which extends beyond simply 'buying it', to become 'buying into it'. Changes have to be made at a people and process as well as a technology level. This means making a strategic investment and a serious commitment. In this case it is highly likely that incremental spending will no longer be sufficient or effective.
These disruptive trends have also brought increased complexity to IT solutions that have a wider impact on the working environment. No longer is it a simple matter of buying discrete items of hardware or software. Technology choices have become virtualised and need to be integrated. Effective solutions now require investment in the right blend of hardware, software and services. Delaying or trying to avoid purchasing one element that might once have been considered secondary now becomes a false economy.
The skills required to support this blended solution of IT products and services are typically well at home in the reseller channel, where a mix of different technical skills and the ability to integrate them have often been in demand. However, the scale of sudden investment required by a reseller's prospective customers to allow them to architect the right sort of solution may pose a challenge.
Smoothing out any sudden step change in spending to help the end customer meet its strategic objectives would be valuable and minimise risk for both reseller and the end customer. It also avoids any lengthy delays or uncertainty, both of which have significant impacts on any IT project.
Cutting the upfront cost of strategic infrastructure investment is something that can be provided by alternative solutions such as managed services. Where the technology is well defined or a discrete set of services, this can be accomplished relatively easily. Entire systems can be hosted and managed or individual elements could be delivered in a public cloud-based 'as a service' type proposition.
This might make it easier to spread the impact of IT costs through recurring monthly subscription based on usage, although moving an entire system architecture into a public cloud-based approach would not only be challenging but potentially undesirable. Making the transition is something that will require effort and predictable cost management.
System architectural and strategic decisions should in any event be based on business requirements not on financial constraints, and so the best approach would be to ensure the financing options support the right technology decision. This not only means that the customer gets the right and complete IT infrastructure in place, but that they can have it when they need it, rather than trying to make do and mend. This gives them flexibility to then support business moves to grow, or to manage costs or risk.
Those involved in selling and supply can be confident that they can offer the optimum solution to keep their end customer happy and strength the customer relationship. They should also be assured that they have won the entire piece of business and can be rewarded up front, rather than risking losing out or being undercut as customer circumstances change over time.
With the right financial package the entire infrastructural solution - hardware, software and professional services - can be incorporated. This ensures that even the most complex and strategic integration projects can be delivered without having to hunt around for pockets of funding or under spent budgets.
Getting off on the right footing with any IT project by delivering a system architecture that is based on the entire business need provides a firm foundation for future innovation, and is the best way for IT departments and their supplier to be recognisably acknowledged as supporting commercial goals.