Mike Donoghue

Get Your IT House in Order

Mike Donoghue

One of the best and most interesting aspects of consulting for our Economit client base is becoming immersed in the client’s actual business. And by business, I mean the day to day operations of that business whether it be in manufacturing, healthcare, distribution or professional services.

I believe the time has come whereby a senior IT individual cannot operate successfully in any business that they do not have a sound understanding of. Gone are the days of being an IT service company and providing nothing except run-of-the-mill helpdesk, break/fix maintenance and product supply services. Although these types of services are still required and do transpose well without the provider necessarily having to have too much of an in-depth understanding of the clients business, the stock in these types of profile of “IT service delivery” companies is quickly decreasing due to a combination of a high level of price-competitiveness and the difficulties faced by the company to differentiate itself – to stand out from the crowd of the many other companies out there doing more or less exactly the same thing. And no, simply claiming you deliver the “best customer service” no longer washes. Potential clients are much wiser to that kind of pulp nowadays.

But what of the client’s themselves? Is it simply enough to “know the client’s business” in order to provide them with the most sound technical and financial IT opinion on where they should take the technology aspects of their business forward? In short, the answer is no.

IT is a critical enabler of pretty much most businesses these days. But a better, more intelligent standard of IT can’t help right some of the wrongs that fundamentally exist in a business. Good IT should ideally be applied to good practice and procedure. If a business operates inefficient processes in the first place, then a better standard of IT when applied will do one of two things:

  • Make the newly improved IT systems seem like a waste of time and money because all that has been achieved is that bad practise has effectively been digitised – most businesses that fall into this category will be the change-resistant, bizarrely set in their ways, reluctant to try something new types that although may be comfortable now, will struggle to compete in tomorrow’s viciously fast-paced economy. Ever heard the phrase “always do the same thing – always get the same results”? Well, like it or not – it’s true. Most importantly, staff won’t buy in because they will see it as an over complication of their day to day tasks and failure will be abound.
  • Force the business to look introspectively at itself by asking questions such as: Do we really need to be doing it this way – surely there has to be an easier method? What would be the net effect if we changed this process? Can we measure this process for effectiveness? Why are we wasting so much time and money printing things off and creating an increased fire hazard in the process (a personal favourite of mine)?

So to be clear, better IT can help a business with poor processes and procedures up to a point. But only up to a point. It can benefit in areas such as resiliency, capacity management and processing horse power. But unless those fundamental processes and procedures improve, the holy grail of actually getting IT to reduce operational costs and even more so, increase sales revenues for the business will continue to elude. Only the businesses willing to change their fundamental operational approaches will yield these rewards when combined with an excellent technological standard.

Business man with ball and chain

Vendor lock-in

Business man with ball and chain

The term “vendor lock-in” is a fairly common one in the IT industry. It is basically a supplier-devised mechanism of ensuring that a customer is retained for the maximum length of time possible whilst maximising sales of as much product or service (or both) during that time. This is usually achieved by (some would say) unscrupulous means of “less than straightforward” contractual endeavours and/or “closed door” products/services that rather inconveniently for the customer, makes it very difficult for integration to occur between those vendor locked-in products/services and other products/services which the customer may wish to use in the future. Unless possibly an extra piece of software is required to be licenced from said vendor to make the integration possible – at a cost to the customer of course?

Obviously we’re all in business to make money – but vendor lock-in is something that has existed for far too long now in the IT industry and in our experience, is NEVER the best scenario for the client and only ever works in favour of the supplier – regardless of what the supplier says to defend themselves to the contrary.

In our opinion, the successful retaining of a customer on a long term basis needs to reflect one major benefit to that customer – value. Without the purpose of value, there surely would be no reason for a business relationship in the first place. Therefore it could be argued that the suppliers who aggressively purse vendor lock-in as a strategy, have a short term view of the actual value that can be realised of their products/services and use vendor lock-in methods as a dubious means to snare unsuspecting customers.

In other words, beware. Vendor lock-in may not only result in unexpected costs for the business in the long run, much worse it may also result in inhibiting business growth.