Managed IT Services: Understanding the Value of IT

Managed IT Services : Understanding the Value of Information Technology

Lets face it, whether your a Network Manager, Director of IT, or even a Corporate CIO. You are charged with the technology needs of your company, which puts you under enormous pressure with “C-Level” management and other senior executives to prove the value that IT is creating for the enterprise. After all most senior level executives and business owners view IT as a necessary evil or an unnecessary burden on the companies budget.

In most cases, whether you like it or not. IT is the single biggest item on any company budget, that does not have direct ties to revenue generating activities – you can call it what ever you want, we look at it as a necessary expenditure and a strategic investment.

Most senior level executives, c-level management and business owners are ignorant about the importance and the indirect role that IT plays in the success of their company. Often their frustration with failed IT projects, poor choices when it comes to IT partners and other technology vendors are partly due to the lack of IT leadership on the part of their internal IT department (If they have one) or their CIO.

The biggest hurdle most IT managers and CIO’s face has always been is convincing and making executive decision makers understand how to use IT as a strategic weapon. This is primarily due to a number of factors, including their inability to explain failed IT projects and their spending habits on new and emerging technologies not because they need it. But because it’s the latest and greatest toy, gizzmo or gadget to have on your asset list.

Whether such expenditure truly enhances a companies ability to compete, become productive and yield a higher ROI on all it’s activities is to be seen. Not to mention the man hours that are spent on less fruitful projects and toys. This kind of spending habits of IT departments have resulted in executives having less confidence on IT as value contributor and more doubts on making mission critical IT investments for fear of another failed and costly IT project.

Call it cry-wolf syndrome, IT managers and their underlings will request purchases that are deemed necessary and yet most IT projects never make it to the light at the end of the tunnel. After this kind of repetitious performance, it becomes increasingly difficult for network managers and CIO’s to show justification on their departments spending and makes its difficulty for senior management to see the true value in IT.

This pattern of overspending, under delivering and never completing projects brings about a perfect storm of allegations from both sides. The executives blame the IT department and its fearless leader for failed projects, wasteful spending and poor departmental performance on the balance sheet and by the same token the other side will always allege that senior management don’t understand the need for IT, and their lack of knowledge resulting in decisions to not execute project or further invest in tools and technology.

Which leads us to the eye of the storm, which is the resulting debate as to the value IT brings to the companies bottom line. Both sides typically argue their case and thrash each other on the other lack of knowledge, understanding, or concern of over or under spending. In reality, neither side actually know the true contribution of IT. Because neither side has ever sat down to measure it.

So this begs the Million dollar question. If neither side have ever taken the time to measure the performance of their IT investment, then how on earth can one place a value on IT? For better or worse this vicious circle will continue to be a sore topic for both sides for eternity unless someone breaks the circle and cries out loud “Time-Out” and bothers to quantify the true value of all and any IT investment.

What is all the fuss about, we still have not found the abominable snowman, or the loch ness monster or Noah’s ark. Why are we all, in some shape or form arguing about IT value, and what exactly is IT value.

To sum it up. IT value is:

The benefit derived from an IT investment to:

1. the company
2. its shareholders
3. and the consumer who consumes the product or service that is delivered by the company.
4. to differentiate a company in an effort to gain an edge over its competition through enhancements derived from strategic IT investment.

So next time you are thinking of an IT project, IT equipment purchase or any form of IT investment, ask your self does the project offer the above values and is it worth the time, expenditure and the risk.

A great example of IT value is the following true story:

A client of ours who has used our On-demand IT services for over Four years was approached with an offer to fully manage and monitor their IT infrastructure. The business owner reviewed our proposal and said “No”.

That’s an executive decision we respect and honored. When the business owner was asked why they had decided to not go ahead with the Managed IT Service offering. The small business owner responded by telling our sales rep, “Well in 4 years i have not spent a great deal of money on IT and yet it all works, so what could possibly change that?  And why would i spend half of what i spent in four years on just one year of Managed Services?”

Obviously this business owner like most did not see the value in their IT investment and did not have the belief in spending to further enhance and secure their existing IT infrastructure.

Several months later the same small business owner called and was frantic over a computer that had died and would not reboot. Upon arrival, it was discovered that they did not renew their anti virus software license from Symantec resulting in the system being infested with hundreds of viruses and destroying critical boot time files and infecting important documents and files.

The customer was given two choices. 1) repair and attempt to recover infected files or 2) re-install and start again. They chose option 1. What makes option 1. difficult is that coincidentally the hard drive also crashed resulting in bad sectors and data loss.

To cut to the chase, the cost of reviving and recovering data from the crashed drive cost more than the cost of Managed IT Service for one full year. Needless to say, the business owner now began to see the value in what we were offering and it’s contribution to her companies bottom line.

Don’t be a statistic, make smart and informed decision and see value where it exists. If you need an unbiased opinion with no hard sell then give us a call or visit us at eZigma.com to learn more about what we do and how we add value to your companies bottom line