The six deadly budget sins

Brendan Mc Aravey, Citrix SA.

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Technology is evolving, solutions are changing, yet many IT departments are doing the same thing they've been doing for years. This amounts to bad, and often wasteful, business. Failure to adapt can prove expensive and could even lead to business failure. Here are the six deadly sins IT departments are guilty of according to local vendors, businesses and CIOs.

According to a Citrix survey, flexibility and agility are no longer a nice 'idea'; they've become a business essential.

For Brendan Mc Aravey, country manager, Citrix SA, this may seem like a headache for IT - multiple users who need secure access to the corporate network. However, this has far greater benefits for the business as a whole.

"With challenges such as loadshedding and e-tolls, more employees are demanding flexible working conditions," says Mc Aravey. "Why pay for a desk per person when a portion of the workforce is working off-site, at home or at a remote location?"

Those who do not embrace workplace mobility will lose out in the war for talent and could suffer lower employee productivity, notes Clifford De Wit, developer experience director at Microsoft South Africa. "The technology to make this happen is widely available, but we need to see a mentality shift to where it becomes an everyday part of working life."

Market-wide digital business evolution is changing how businesses operate and alters general ICT and business architecture needs. The trick, says Bruce Taylor, chief solutions and marketing officer for the Middle East and Africa at Dimension Data, is how to achieve this evolution in the most cost-effective and efficient way possible. And, very importantly, it's essential to not make unnecessary upgrades, he adds. This requires a mindset change, where businesses no longer have a linear perception of product lifecycles where they look at their technology assets as something they purchase, use and then throw away as soon as something new comes along.

To avoid this, organisations must manage all of the components in a product lifecycle and partner with the right people who are able to successfully upgrade and extend the lifespan of business assets. According to Brent Flint, services executive for Dimension Data, Middle East and Africa, reactive replacement of ageing assets is a recipe for over-spending.

The biggest money waster is when organisations choose business systems that are more complex and cumbersome than required.

Paul Fick, The Jasco Group

"Rather contract with a service provider that can help you sweat your assets and get the most out of your IT spend," says Flint. While some companies opt to overhaul their architecture at predetermined intervals, it's more cost-effective and less disruptive to examine existing systems and software and assess if something really needs to be replaced. Upgrading equipment can also mean bringing together the functionality of multiple devices into a single device. "The use of fewer devices leads to a reduction in long-term spend," he adds.

While upgrading infrastructure unnecessarily can be costly, not upgrading your technology can also be problematic. "Poor architecture probably costs IT more than all other issues combined," notes Gerhard Botha, CTO of PBT Group.

An example of how poor infrastructure can hamper a business' development can be seen in how companies choose to respond to the explosion of data. To derive true business value from this influx of information, business systems and processes need to evolve. There is no point in having all this information at your fingertips and not having the level of technology to handle it.

"Legacy systems can cause a tremendous amount of duplication and complexity, making things less cost-effective," notes Heilet Scholtz, solution consulting director at Oracle Technology. "If you don't embrace change and utilise new technologies to handle this data, you will fall behind." But upgrading legacy systems needn't require actually buying new technology. "By moving to cloud, businesses can consolidate, standardise and simplify business processes without actually having to make any sizable hardware or software investments," she says.

The strategies put in place to cut costs can actually cost more money if not monitored stringently. Mc Aravey cites Bring Your Own Device (BYOD) as the perfect example of this. While allowing employees to bring their personal devices to work can drastically reduce hardware budgets, poorly managed strategies can be a problem. Organisations must have a set of ground rules in place to highlight expectations and encourage good behaviour from employees, says Mc Aravey. "Too often, organisations restrict and try to prevent employees from sharing and collaborating, taking the chance that their workers won't break the rules by doing things such as using insecure storage or file transfer apps. This ultimately leaves the company at risk."

A BYOD employee on a consumer-grade device using sensitive public data and going directly to the cloud for sharing, storage or editing can completely bypass the control and visibility of IT. "This sort of behaviour is alarmingly common in today's organisations," he adds. While cloud has a multitude of benefits, when used incorrectly, sensitive data can be made visible to the wrong people, compromising security and compliance. "Not anticipating this risk could present a huge unexpected cost to the organisation - something that can be easily avoided by taking a proactive stance."

Many organisations think it's more cost-effective to hire a service provider or contractor to get the job done, but often there are people hidden within your organisation who have the necessary expertise. The balancing act between what you outsource and what you keep in-house depends entirely on the organisation's unique offerings and requirements.

"A company commonly outsources IT functions that do not form part of its core business," says Flint. "Since the economic recession, there has been an increase in IT service outsourcing as a means to minimise cost and increase efficiency."

If keeping skills in-house is the IT strategy of choice, it becomes ever more important to ensure that the organisation is hiring the right people. The cost of training and attempting to upskill a mediocre, but cheap employee can often work out to be just as expensive as outsourcing the task to someone with the necessary knowhow to complete the project without any handholding.

To truly utilise IT assets effectively and derive value from tech innovation, business needs to learn about IT and IT needs to understand business. This is the word from former Tiger Brands Group CIO Darryl Thwaits. IT is all too often perceived as a 'grudge purchase', he notes, adding that until business executives become more ITsavvy, they will be making investments and putting strategies in place that bear little fruit. What is required is for non-IT people to have faith in their IT staff and to trust that they will use their expertise to implement the necessary processes to complete tasks.

Poor architecture probably costs IT more than all other issues combined.

Gerhard Botha, PBT Group

For Ken Jarvis, founder and CEO of Jika Africa and former CIO at Momentum Life, Anglo Platinum, Multichoice, Naspers Limited and SARS, failure to negotiate with suppliers is one of his biggest bugbears. Organisations shouldn't be too proud to sit down with suppliers and vendors and formulate agreements that are beneficial for all. Given the rapid changes that are happening on a daily basis, the technology that met your business needs yesterday may not be suitable today.

Technology trends and buzzwords can sometimes trick businesses into thinking that they're falling behind. While it would be foolish to ignore these altogether, organisations should be mindful to not just 'jump on the bandwagon' before they've properly assessed if this new gadget or piece of software is something they actually need.

Too many IT departments and companies are overeager to latch onto the next fad/technology trend, says Botha, citing the hype around big data as an example. In the case of big data, some organisations spent untold amounts of resources on implementing an immature technology at the time and thereby creating a dependency on volatile technology. Botha advises that large corporates always investigate emerging technology, but make sure that the technology is robust, and suited to their needs, before implementing.

In line with this, choosing the wrong IT for your business' unique needs amounts to wasteful behaviour. "The biggest money waster is when organisations choose business systems that are more complex and cumbersome than required," says Paul Fick, CTO for The Jasco Group. These business systems are expensive to procure, upgrade and expand, and, most importantly, cost a great deal of money to maintain and use, he continues. "And money is wasted when the same functionality can be provided by a far simpler and less costly technology solution."

This article was first published in Brainstorm magazine. Click here to read the complete article at the Brainstorm website.