Scale, a critical indicator of success in a competitive marketplace.
Economic Lenses: Grow Revenue, Decrease Spend, Increase Value, Avoid Costs
When the market is tough, the need to be more competitive is greater than ever. Below, we will explore how companies can use technology as a competitive advantage to drive business outcomes while also providing their organization the scale and agility required to align with market demands. We all know that if you aren’t getting ahead, you are falling behind.
Getting ahead. This phrase makes a few assumptions:
- You know what direction you are headed in.
- Strategically, the direction you are headed in is the right direction.
With the assertion that these are true statements, a number of very interesting conversations took place across our panel about what it means to them when we talk to our customers about how to “get ahead” or “be more competitive” and how technology can be leveraged for competitive advantage, whether facing an economic downturn or unprecedented growth.
This was an exciting topic for our panel as there are a million ways that companies can use technology to facilitate new innovations or enable the business with new capabilities (which we will talk about later within this series). However, one comment that we heard over and over across our panel was that IT needs to be able to scale through the use and combination of different consumption models to meet the needs of the business, we thought this idea was worthy of a whole blog to explore this further. Those that can both scale up or down fastest can achieve a distinct advantage against their competitors.
As we dug into the topic of scale, this was one of the simplest principles for companies of any size or industry to use to be better poised in any market condition.
One panelist believes that it is because some IT departments are still very insource focused. They continued, “Don’t feel like you have to do it all yourself, look beyond your four walls. The availability of services for your business to consume, are richer than they have ever been before.”
The other reason is simple: reality. It isn’t realistic for every organization to move fully to a consumption-based model based on existing investments, business requirements or technical requirements, so the trick is finding the optimal combination of traditional and pay-as-you-go consumption models based on the needs of your organization.
Think about this: if your business changed today and you no longer needed the resources that you have invested in, what happens? For many, this is not a fun scenario because it means waste. It means that you have paid or are paying for something (potentially expensive infrastructure or people) you no longer need or is being underutilized. If the implication of unnecessary spend on the bottom line isn’t bad enough, we think what is more disadvantageous to an organization is when lack of ability to scale means they continue to pay for what they don’t need. The costs are sunk and reallocation isn’t an option. Flipping the switch to off or dialing back can mean the difference between profit and loss.
We are seeing abundant growth in shadow IT – where spend is happening outside of IT. What is the ripple effect? We have an entire industry trained to put technology in place to address issues. The danger of non-technical people signing off on data and applications has a ripple effect and ramifications such as security and integration.
“IT needs to become the orchestrator of consuming services, adaptive sourcing or bi-modal technology. So business units don’t go outside of the purview of IT. We also need to create small, fail fast teams inside IT departments that take on pertinent business problems and that can be solved with technology. The idea is to be agile; solve, test, iterate, and ultimately fail or succeed quickly. You need to create a team that is not operational but a team that knows your business processes. The key is to focus on what you are good at and outsource the commodity components of IT.” – Alastair Woolcock, North American General Manager, Strategic Business Solutions
On the flipside, what happens during a period of growth? Early bird gets the worm, right? Those companies that are in a position to scale infrastructure and resources to pounce on a market opportunity first can give themselves the best opportunity to establish themselves as a market leader, capturing customers and capturing revenue.
Things to Consider:
Management Strategy: By keeping your IT team focused on what is core to your business and the alignment of your technology priorities to your business strategy, can you more easily scale the resources needed for the day-to-day operations? Does removing the requirement to hire a senior full time resource reduce cost, especially when that individual only needs to work on “senior” tasks or projects from time to time and isn’t core to your everyday business?
Consumption Strategy: If you build a multi-million dollar datacenter you will always have to pay for the physical datacenter and the equipment in it, the staff, the maintenance, the power, heating and cooling, etc. If you purchase a software solution through traditional licensing for your team, what happens if your team shrinks or grows by 30%? Have you explored Hybrid Cloud or SaaS solutions instead?
Continue with the series: Part III Are you throwing your money away? Lack of efficiency could be hurting your bottom line.
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