To leverage technology best, you need to get clear about what your core business is.
What does your firm spend most of its time on? What does your IT group spend most of its time on? What should everyone be focused on? Interesting questions, if you reflect on them for a moment. And here are some illustrations of churning – or non-productive behaviors – that can result from a lack of focus.
- A friend who owns a small business shared a story about what he discovered after acquiring the company: The company was producing orders on a rather consistent 2-week (10 production day) schedule. In a meeting, he discovered that it took 8-9 days before the paperwork made it to the factory, after all the proofreading, credit checking, artwork prep, etc. Then, in a matter of hours, the firm was able to produce and ship the imprinted items.
- His conclusion: We’re not in the business of manufacturing pens, we are manufacturing order forms. [Editor: Updated after discussion with the source. 🙂
- Another firm, this one a multi-billion dollar manufacturer, had IT staff spending at least 30% of its time – and IT budgetary resources – on managing server farms and data center operations at more than 25 data centers around the globe. And this firm is not in the data center business.
What it comes down to is that everyone – and especially the technologists – IT – needs an understanding of what the core business is: How does the business make money? How does each business functional area define success?
Getting IT aligned to the business is essential for business success,as is leveraging the technologies now available to help in improving your firm’s competitive advantage.
Even technology companies need the technical people to be smart about what their core business is – and when to leverage outside technology service offerings.
- One $1.5M+ startup in the internet social web space that included a real-time order communications toolset, determined from the beginning that it would outsource data center hosting, utilizing a collocation approach: This meant that the firm acquired the server and networking hardware and managed all of it, but placed the hardware in a large, professionally-managed data center. This company was in the business to drive revenues primarily through software-as-a-service, not through a data center.
- Another technology start-up chose to outsource server and data center hosting and operations. That way the data center maintained full operational control over the servers, along with responsibility for ensuring that backups were taken, all security and patch management and operating system upgrades were current. So the second firm had even less need for IT operations personnel.
Notably, both of these firms were in the technology services sector, but neither firm wanted the responsibilities or costs of building and maintaining a data center. And why should they? What was impossible in the 90s is now a no-brainer. There will be more posts on the subject of leveraging technology for competitive advantage, but the foundational concept of focus is critical to grasping how to best avail the firm of what can be done.
Now, even more technology services are available for firms to help them in focusing on their core business and contain IT spend. Many of these services were up until now prohibitively expensive for all but large firms – but can be leveraged for those companies who are smart about IT.
It’s really about focusing on the core business.