Making Sound Decisions on Information Technology

When you have a company that generates its revenue from selling memberships, services, or products, your core business plan is to budget as much as possible into Sales and Marketing. Information Technology, on the other hand, may seem more like a necessary evil, or an incommodious expenditure most companies would rather do without.

The truth of the matter is that Information Technology plays an indispensable role in helping the company retain the revenue it earns. Technology streamlines a company's processes when designed correctly, for instance eliminating or consolidating duplicate forms of automated processes. Deciding on the right system could save thousands a month in development costs, especially when designed by an experienced database architect.

Experimenting with technology without fully understanding the technology in depth however, is more commonly the biggest waste of money a company could hope to achieve. If you find yourself moving from one payroll company to another, or one big-ticket software application to another within a matter of a year or two, then you are wasting money needlessly.

To save Millions of dollars in the long run, consider the following:

  • Move all applications entirely into the IT department

When you have Executives designing and developing applications; Payroll designing and developing applications; and IT designing and developing even more applications, then you are certain to meet with disastrous and wasteful results. Department's that build their own applications outside of the structured processes of an IT department won't comply with best practice standards, and are sure to be wasting time and money with duplicate efforts, and/or ungoverned data.

  • Meet with IT Consultants to prepare a solid plan for growth

People involved in the business of designing applications are sure to know more about cost effective ways of building an IT infrastructure that makes sense. Get their input and include them in the discussions for growth. Too often you will find managers making decisions about IT and applications, while knowing very little about the technology and how it complements other existing technology already in place.

  • Ask for a cost benefit analysis

That doesn't' necessarily mean from one company. There is a common cliche amongst managers that reads:

"I've never seen a 'cost benefit analysis' that didn't show their product wasn't beneficial".

Just like a job interview, you should also get multiple CBA's from different vendors or consultants. This will give you a clearer understanding of which vendor or consultant is including considerations that you feel are important for your company.

  • Design or buy an application that you will use for at least ten years

When you estimate the overall cost of an application, you should add the total cost  of ownership over a ten year period. You may find it would be more cost effective to hire a team of developers to build a proprietary system, rather than subscribing to an SaaS app that will cost you millions, and that isn't capable of growing with the dynamic needs of your company.

  • Find software that was designed for your specific industry

If you're considering purchasing a scheduling program for a health club that was designed specifically for the restaurant industry, then you may want to keep looking. Every industry is specific. Some apps may work for many industries, but if you're finding yourself saying, "That's ok, we can do without that feature" then you may want to talk to a consultant, becuase there may be many other incompatibilities on the back-end that you aren't aware of that will reveal more hidden fees that you weren't aware of.

The bottom line is to get advice before you decide. This is guaranteed to save you money in the long run, and it may also give you more options that you didn't know were available.

 

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