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4 Best Practices for IT Spending Outside the IT Department

August 03, 2015

As IT solutions become more standardized, the ownership and key driver behind IT investments are now placed within the business units -- not IT.
Research over recent years into the IT spending of companies has shown that technology budgets are increasingly shifting away from the IT department and into other business departments.

According to Gartner, overall IT budgets are flat and have been for going on 10 years. Traditionally non-technical employees such as CMOs, CFOs, VP of Sales, and line executives who are demanding better, more efficient ways to analyze their departments are now fundamental drivers of IT purchasing. This means, however, that these roles are not always as well versed as they should be in the best practices for technology resources that are second nature to IT teams.

 This shift is increasingly apparent in the business intelligence discipline, as BI operates across business units -- and for good reason. Business intelligence is mission critical across departments, so having a solution that is well-anchored and governed by subject matter experts is key to a success BI implementation.

 Follow these best practices for IT spending to shed light on what can be a daunting task for those looking to implement IT strategies.

1. Team up with IT

Establishing a joint venture with IT gives you the best of both worlds. Combine the invaluable insight of your subject matter experts in each business unit with the professional expertise in selection and procurement of complex IT solutions.

IT will also foster dialogue and perhaps some friendly sparring about the pros and cons of software choices between departments. The technology bridge team will meet with each division or department to document what is being done today and how it can be done better. They’ll set the ground rules for instances when decentralized solutions are okay, and be held responsible for the long-term consequences of those choices. Ideally, these conversations will result in a solution that meets the needs for your department while matching the long-term company requirements.

And, of course, run it all past the CIO before a check is written. CIOs know business. Bring examples of cost savings and value added with the new software for the company as a whole. He or she may know the solution landscape better than you think, and can offer some valuable advice and productive counter arguments.

2. Always think integration.

Integration is one of the largest costs associated with BI solutions. That’s why it’s important to leverage existing capabilities and explore sustainable options that will help you achieve your end goals.

Avoid purchasing decentralized software without strategizing with the CIO or tech specialists. Finding the “right” solution for your needs without doing so might solve whatever is your current pain point short term, but you risk costing the company significantly increased resources once you realize the need for integration of various systems and data sources such as the ERP, CRM, or WMS. 

Many software vendors—especially data discovery software—offer initially “cheap” entry prices, but once needs are scaled the cost quickly skyrockets. When considering the cost of software, you also must consider technical implementation and consultation, how easily data is accessible, front-end configuration, and the amount of training needed for employees. Now you’re looking at a dramatically different price or, even worse, a solution that ultimately can’t ever scale and must be scrapped. It happens more often than you think. 

3. Avoid siloed thinking

If the goal is increased efficiency – when isn’t it? – failing to plan for intra-departmental data integration is a mistake, even if that isn’t the immediate objective. Perpetrating siloed data management between departments all but guarantees the right hand will never entirely know what the left hand is doing.

A Procurement Manager, for example, must have insight into warehouse data, sales data, and customer data to know if they are acquiring the right products in the right volume at the right time. And how about the CMO who needs full visibility into all marketing solutions combined with CRM data and revenue data typically stored in the ERP? That’s the only way to truly understand customers’ journey and interactions with your company and take away the guesswork. 

3. Beware of snake oil.

And by that I mean beware of a quick sell-in. In order to know what solution is right for you, the vendor must know your industry, understand your pain points, and strategize with you the right next steps for your unique company on the journey to becoming data-driven.

When it comes to business intelligence and analytics, it’s fine to want fast implementation and pre-built dashboards. But be sure that the solution is future-proof. Find a solution that is flexible and adaptable so when business needs or processes change, you’re not dependent on expensive consultants to get you up to speed. The right software is interactive and dynamic, allowing you to constantly ask new questions and find better ways of doing business. A project that may have seemed like a cheap way to get going fast may end up costing significantly more time and money down the line.

Making decentralized IT investments forges a strong ownership of the end solution. Don’t hesitate to follow this trend – It’s time to put the subject matter expert behind the wheel! 

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