Why should we keep investing in IT infrastructure?

Is this a trick question? Do you mean – why should we buy infrastructure when everything is moving to the cloud? Or do you mean – why can’t we just stop spending money?

Either way, it’s not news that IT keeps moving forward and infrastructure keeps ageing. Yes, we’re going to need less infrastructure as some applications move to the cloud – especially with the new release of Microsoft’s desktop suite of applications in the cloud, Office 365. However, for some time, we will continue to see a hybrid mix of local and cloud solutions, so ongoing upgrades are essential.

Just last week, I accompanied one of my staff to buy his first brand-new car as part of a salary package, and watched the trade-in deal take place. I noted very direct parallels with the IT scenario. The motivation to buy a new car stemmed from successive breakdowns, each time causing travel stress, loss of work time and unanticipated repair bills. The last repair cost $2000 and had to be paid as there was an immediate need to travel to work.

Come trade-in time, just a couple of weeks later, the vehicle was valued at $1000 – essentially its scrap value. In fact a large part of its value was the car’s registration. The “investment” of $2000 to keep it running was in fact 100% wasted. The car was a 1995 VS Commodore and it had done 238,000 kilometres. In the past 12 months, it cost the owner several times its value in repairs and created hours of downtime. Clearly it had been kept for too long, yet the owner was passionate about the car, as it felt like a part of him.

In the IT world, businesses have the same mentality when it comes to IT infrastructure. We monitor thousands of PCs and hundreds of servers, we see the hours of work that goes into the devices and see the full picture of the value proposition of the systems as they age. We only look at the cost of services versus the value of the devices, and being off-site most of the time we don’t get to see the direct impact on internal productivity, as the machines slow down. However, from our own direct experiences, we know about the frustrations of working with old, decelerating computers.

Having been in business for almost 10 years, we’ve had our own share of over-aged devices being retired. We know that as our PCs slow down, we spend more time waiting for our computers to get over a freeze, or rebooting, or waiting for a server to recover from a problem.

In our business, IT is a huge cost as everything we do is computer-based. Like so many businesses today, our labour costs are immense and we must constantly focus on improving productivity and scalability to ensure profitability.

Clearly, keeping old infrastructure is not a good option for us; even though we have the skills on tap to run repairs, we simply can’t afford the productivity impact to the team.

So my message is this: we need to retire hardware before the hidden maintenance costs exceed the cost of replacement. We don’t want to install new hardware alongside the old hardware, as we then create overly complex environments to manage.

So, make sure part of your investment in new infrastructure includes the decommissioning of old technology and ensuring decommissioned equipment is removed and recycled appropriately with reference to data protection and environmental protection.

David Markus is the founder of Combo – the IT service company that ensures IT is never an impediment to growth. We win awards for the service we offer, so If your IT environment is slowing you down, contact Combo on 1300 726 626 to organise a complimentary consultation with David.

Is your IT person really the hero that you think they are?

I speak to lots of people who have a great relationship with their IT person, whether in-house or outsourced. In fact, the IT person often feels like a friend. Perhaps this is because it’s your IT person who comes running when you have a problem and need help. They like hero-work, where they can swoop in to save the day and fly off again, to the fading sounds of cheering fans.

These heroes are lovable characters - they can be loyal and friendly and ever so helpful...Of course, this makes it very hard to let them go, especially if they seem to be doing a good job of fixing the problems.

But, have you looked at the downside of relying on this hero figure? Heroes need your systems to fail to justify their position, and they probably make money off each failure too. Heroes rarely keep good records or documentation and like to keep key, strategic information to themselves as it protects their role.

Heroes don’t think strategically about long-term outcomes - they prefer to focus on the ‘here and now’ tactical solution. They also love quick workarounds that save the day, but often these are sleeper problems that strike back later when other changes are made.

We see these characteristics in our own staff and work very hard to change the behaviour of the technical hero to make them a team player, which in our mind makes them a stronger asset. Not all technical people can be converted to the team mentality without completely breaking the hero spirit that attracted them to the industry in the first place.

However, IT is changing and business needs of IT people are shifting. Moving from crisis to crisis is no longer a suitable approach for a growing business that is totally dependent on IT systems. And covering a wide range of technologies with good breadth and depth is no longer possible for just one person, so teams are required.

In the SME sector, this means outsourcing is becoming more important, to ensure costs are kept down and productivity of IT services is maximised. Your business needs access to the right skills as soon as a problem occurs, not days or weeks later. IT problems that land in the too-hard basket will cost your organisation money, as workarounds are put in place. Outsourced IT teams can provide your business with access to specialists with the capabilities that you need. For example: you might need to upgrade a server, which, for the right specialist is a two week job, or, for someone who hasn’t done a server upgrade for a few years, is a three-month project with variable outcomes.

You may need a specialist for a few days to migrate your in-house mail server to the new online exchange system. Your in-house team may take weeks to achieve this (with many mistakes made along the way), but a specialist who has already done a few might complete a trouble-free migration in a few days with no impact on your business productivity or staff morale. The apparent cost savings of using the person you have are drastically outweighed by speed and accuracy of the specialist.

We are also seeing huge benefits in the SME sector for getting new IT strategies brought into a business. As discussed in the recent Gartner article, the landscape is shifting and new solutions are available that let us work off mobile tablet devices and smart phones or allow us to open up new geographical regions with good scalable systems. This takes a strategic overview not often associated with IT tactical IT heroes.

We still need our heroes, but they need to get smarter and they need to be backed by good teams of specialists with strategic foresight. If it’s not time to let go of your IT hero, it may be time to wrap a whole lot of support around this person to ensure you get the outcomes you need.

David Markus is the founder of Combo – the IT service company that ensures IT is never an impediment to growth. We win awards for the service we offer, so If your IT environment is slowing you down, contact Combo on 1300 726 626 to organise a complimentary consultation with David.

Could our business be responsible for a breach of privacy?

We’re all at risk of privacy breaches, because we all store personal information of some kind – about staff, clients, prospects, patients or others. So long as we are storing personal information, we must be aware that we are at risk of creating a privacy breach.

I could discuss the security in place on PCs and servers in the SME sector but I’ll leave that for another day. Instead, I want to focus on how to go about disposing your data storage devices. Just look around your office and think about how many hard drives are around; CDs, DVDs, USB sticks, tapes, removable hard drives… the list goes on.

The legitimacy of the following video is questionable but it does serve as food for thought regarding how pervasive personal data can be in our systems, and how seldom we stop to think about this data as the machine leaves our office doors.

Okay, so it’s about scanned documents being found on the hard drives of photocopiers, yet it serves as a warning to all of us about the places we mindlessly store our private data and how we should go about ensuring it is removed responsibly.

In small businesses, all too often we try to recover every possible cent spent on computers. We may sell an old PC, or are just as likely to take an old office computer home for the kids or the neighbour’s kids or perhaps our favourite charitable group, because we like to help out.

But how often do we stop to think about where the hard drive will end up and what data might be on it?

As business owners, we are responsible for ensuring the security of personal information collected and so it is essential that we manage the safe destruction of those old hard drives. The machines themselves have little or no real value, but the data on them could cost us far more than the value of the reused machine, should it fall into the wrong hands.

So, when it comes to PCs, servers and other office devices with hard drives, it’s essential that we seek ethical recyclers, who will ensure data is destroyed no matter how unimportant that data may seem. While we’re at it, we should ensure that the recyclers are looking after the planet as well.

We’re still sending shiploads of old technology to third-world countries, where the components are dissembled by hand to recover precious metals and other components, creating toxic villages and sick people.

So, I urge you to think about your technology as you dispose of it.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

What business metrics should we measure to assess the performance of IT?

Wow, this is a big business question to ask of small business IT. Of course, it’s a great question to ask – but is your business really mature enough to be making these measurements and then reporting on them?

Congratulations if you are running at this level; it shows you’re really thinking about how to grow your business by making the right investments. Finding metrics that are relevant without creating a burden on reporting is the key here. The numbers need to be simple to collect, and clear in what they tell you. And, yes, you need the focus to be on business objectives, not technology functionality.

What do I mean by this? Well, for example, you don’t want to report on server uptime and storage capacity, or WAN performance and availability. Why? Because this rapidly leads to assessing costs and driving IT decisions based on a price reduction target and technology cost based budget – which is counter-productive.

It is much better to instead measure business objectives that appeal to executives, and get them thinking about enabling business outcomes with technology (at which point, the cost of the technology is less of an issue if the objectives are attained).

We, as IT people, need to be conscious of WHY decisions are made in business, and ensure we’re working to create good outcomes in business capability, improving margins through productivity and efficiency, and quality of service.

Possible metrics include:

• Alignment of IT plans to business plans.
• Business value of IT investments.
• Quality of service provided.
• Level of functionality of the business systems.

The IT department needs to move away from reporting operational facts, and instead translate these facts into something executives can comprehend – such as the ability to access information systems or the cost to establish new markets or geographies.

Essentially, when the business value of IT investments is properly understood, IT is budgeted based on benefit and future possibilities, rather than a limited and limiting budget. This is the growth mentality as opposed to the reactionary mentality, and it is key to pro-active business development associated with expansion.

The level of functionality of core business systems is the other consideration. If you’re spending money on applications, infrastructure and staff, and still cannot perform your core business effectively and efficiently, then it is essential to go back to square one and re-do the plan to empower the right selection of solution, platform and people.

Constant assessment of the outcomes of IT will pay dividends; not necessarily reducing your IT spend but by improving the output of your company. Do not be afraid to look outside your current support arrangements to assess your current position, and ensure you’re making the right investment in your future technology.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

What does Gartner mean by its recent statement - "CIOs must re-imagine IT"?

Reimagining IT: The 2011 CIO Agenda certainly makes a big claim - IT is changing so rapidly, conventional thinking fails to keep pace with the industry.

This statement is as alarming for businesses that are not well informed, as it is for companies trying to offer support to businesses that want the latest solutions and the benefits of those solutions.

To quote from the Gartner Publications Executive Summary: “2010 was a year of economic, strategic and technological transitions and achievements that have made IT stronger. Over the next five years, almost half of all CIOs expect to operate the majority of their applications and infrastructures via cloud technologies. This change requires that CIOs re-imagine IT and lead it through a process of ‘creative destruction.’”

We all associate destruction with pain and expense and yet here, one of the most respected consultancies in the IT industry (who surveyed 2,014 CIOs in 50 countries responsible for $160 billion of IT budgets), is telling us that we must destroy our current plans and re-imagine the future to provide support for growth and competitive advantage. Their words, not mine.

As it happens, I agree with them. Too often I see organisations running old-school IT departments and supporting staff with an in-house IT team, who are failing to add value or support growth. Today, a business doesn’t need to be too far behind in its IT systems to be missing out on mobility, scalability, elasticity, redundancy and recoverability. If too much of the IT budget is spent on staff who are failing to innovate, it‘s very hard to invest enough on innovation to reduce the dependency on the staff.

As global economies improve, growth will be on the agenda for a lot of companies. According to Gartner, more of our services businesses will obtain revenue from digital services, but to do this they will need to become fully digitised within the business. This means information is created digitally, transferred digitally, processed and sold or assessed to create value. We are witnessing the creation of the next digital revolution.

One only needs to look at the advertising industry to see that most successful advertising agencies have either built or partnered with a digital agency, to access new areas of work that didn’t exist prior to the first digital revolution, which was created by building web presence. The challenge now, is to build web integration from front-office through to back-office.

Industries, such as the building trade, that were quick to adopt mobile phones but slow to adopt computers, are now being driven to the web, motivated by the ability to access plans, shop for components, order and review instructions from anywhere via mobile devices such as phones and iPads. The information workers are now scrambling to provide the connections and solutions fast enough to meet demand.

The CIOs surveyed by Gartner identified internal skill gaps as a major impediment to fast progress and hailed outsourcing as the key to success – concluding that they need to shift their thinking from team leadership to management of external contractors for short-term, highly-skilled jobs. These CIOs believe the consistent salaries were less effective than the responsiveness and capabilities of skills-outsourcing and use of contractors. They also claimed that when it comes to career development, they could not train people fast enough to fill the gaps.

Gartner also points out that now technology is integrated into every facet of business, IT projects are no longer just the realm of the IT department – they now have an impact across multiple departments. IT needs to be well represented at the management table and needs to make use of business results and business knowledge to drive IT projects.

All of this wisdom from Gartner is very much in line with my own experiences and will play out strongly as business continues to pick up across the developed nations. If you’re not already reimagining IT for your business, it is probably time to reflect on how you can engage with the next digital revolution, as it unfolds before you.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.