IT Financial Management: Master it to create endurance for your small or mid-size business.

Does your small or mid-size business have the endurance and discipline to create long-lasting value for your customers and stakeholders? Are your technology investments solely focused on cost reduction and efficiency? Do any of the following statements resonate with you?

  • IT initiatives and the business are often misaligned because what the business values is not well defined or communicated.
  • Decisions are made without a shared perspective of value.
  • IT is perceived as a deep cost center that does not deliver value.
  • The budgeting process is difficult because finance executives have a limited understanding of information technology and use a different vocabulary.
  • Common “quick-win” cost-cutting initiatives do not satisfy the organization’s financial objectives.
  • Cost-optimization projects often have unanticipated consequences that offset potential cost savings and result in business dissatisfaction.

A constant cycle in large and small companies, no matter the economic environment, has business leaders demanding IT departments to do more with less. Leaders of small-enterprise IT departments feel constantly constrained and pressured to reduce cost. Care must be taken for without informed discipline, cuts to the budget may create bigger shockwaves than the business is ready or willing to handle.

In our previous blog post introducing the IT Fitness Program, we proposed that leaders master the management of technology versus a focus on the technology itself when seeking leverage for strategic advantage. To assist SMB’s we recommended establishing an IT fitness program aligned with your business objectives. Whether your goal is to build muscle, become leaner or agile, you will use a combination of strategies (think – diet, nutrition, exercise) to achieve your objectives.

As with physical fitness, when it comes to IT financial management, you should avoid those trendy cost-cutting programs that may come with some serious side effects that could put your business at risk. Rather, adopt a more balanced and thoughtful approach that builds the endurance needed to thrive in today’s competitive environment. The conversation should start with “What are the goals you are trying to accomplish?” to help you align your financial management strategy for IT and to increase the chance of achieving those goals versus meeting short-term objectives.

You Can’t Shrink to Greatness

“Cost control is a necessary part of effective IT governance. It can help IT position itself well with an organization’s executive management”. Info Tech Research Group Director of Small Enterprise Research, states that in cases where cost containment is an enterprise-wide initiative, every department will likely need to pitch in, and it’s important for IT to play its part. Treat cost-cutting measures as an opportunity to create a more efficient and smarter department and demonstrate that throughout the enterprise.

Having led IT in large global Fortune 500 organizations as well as at smaller companies, one thing I know for sure is that “you can’t shrink yourself to greatness.” Historically, IT departments have been mandated to optimize resources and mitigate risks. Organizational priorities should drive IT priorities, but there is often misalignment. When CEO’s are asked about their priorities, they often cite “maximizing shareholder value” as a top goal. However, heads of IT typically state “improving operational efficiency” as their top priority. To exacerbate this disconnect, IT leaders can misestimate the size of their next IT budget, overestimating or underestimating, which can create issues of credibility in the budgeting process. My experience given this situation almost always leads to IT being asked to reduce their budget resulting in a focus exclusively on efficiency and cost “take outs” versus value creation.

The IT Fitness Program for the SMB

Our IT Fitness Program identifies nine sections that are based on the COBiT Framework and best practices research from Info-Tech Research Group. They are:

  • Strategy and Governance
  • Financial Management
  • People and Resources
  • Service Planning and Architecture
  • Infrastructure and Operations
  • Security and Risk
  • Applications
  • Data and Business Intelligence
  • Portfolio and Project Management

Adopting the IT Management capabilities in this framework will enable your organization to reach the full potential of your IT investments. In this blog, we will cover Financial Management and explore several capabilities including Business Value, Cost and Budget Management, Vendor Management and Cost Optimization.

IT Financial Management

Business Value:

  • Everything IT provides must have real business value. IT provides value by maintaining the benefit of existing services and functions it provides, eliminating services that no longer provide benefit, and by creating new value. This is true whether IT operates as a background utility, a broad enabler of business value closer to the user experience, or incorporating the entire chain of value from end to end.
  • Therefore, it is critical to ensure a common understanding of what is valuable for the organization to drive growth and consistent strategic decision-making. Then, equip IT to evaluate, direct, and monitor investments to support the achievement of the organization’s values and business benefits. Finally, align IT spend with business value through an enhanced governance structure to achieve cost optimization and ensure IT provides a visible contribution to the creation and maintenance of value.
  • With the above in mind, here are three steps to get your organization on the path to benefits realization:
  1. Understand business value; ensure there is a common understanding of what is valuable for the organization to drive growth and consistent strategic decision making.
  2. Incorporate benefits realization into governance; align IT spend with business value through an enhanced governance structure to achieve cost optimization
  3. Ensure an accurate reference of value; IT provides a visible contribution to the creation and maintenance of value.

Cost and Budget Management:

  • An IT budgeting process must contain adequate measures to capture and communicate the benefit of IT investments. This begins with the collection of data and ends with effectively presenting the benefits IT investments will have for the business. IT cost pressure is fueled by negative sentiment and IT can be perceived as a high cost that does not deliver value. Budgetary approval is difficult because finance executives have a limited understanding of IT and use a different vocabulary. Detailed budgets must be constructed in a way that clearly highlights benefits but avoids technical detail that is complex and confusing.
  • Therefore it is important to build an IT Budget that demonstrates value delivery. However, according to a research survey conducted by Grant Thornton, only 40% of CFOs describe their current financial planning and analysis system as effective. 62% of CFOs claim their staffs were too busy with daily tasks to make the changes needed to keep their budgets up to date. Clearly, the IT budget process and subsequent maintenance extends beyond IT and can be widespread throughout the organization.
  • With the above in mind, here are three steps to reduce IT Budgeting frustration in your organization:
  1. Plan the budget with ample time for collaboration; for example, have preliminary talks with business units to understand their plans for the fiscal year.
  2. Build the budget; for example start budgeting early, with a sound forecasting methodology.
  3. Sell the budget and its benefits; for example presell ideas, making business stakeholders into advocates for the budget

Vendor Management

  • As IT services and products continue to become outsourced, IT is becoming increasingly dependent on external vendors and a transaction-based approach becomes insufficient to guarantee continued value. Vendor management often focuses on procurement, which can reduce the value of the vendor to that of the transaction itself. When IT does not manage vendors properly, performance levels can drop and fail to deliver essential services – and IT is left accountable.
  • IT often has so many vendors that it is impossible to provide the same level of attention to each vendor. Even if there are a few vendors that are clearly the most important, it’s not clear how to monitor relationships with the rest of IT’s vendors. According to a Deloitte Outsourcing Survey, more than 76% of organizations outsource core applications, services, and functions with the primary goal of reducing and controlling operating costs, yet less than 24% of organizations clearly define requirements of outsourced initiatives and have the tools and processes to adequately manage their vendor portfolios
  • With the above in mind, here are three steps to get some order to your vendor management process:
  1. Prioritize and classify your vendors with quantifiable, standardized rankings.
  2. Focus on your strategic vendors first, then, year over year, work through every classification of vendor.
  3. Standardize your processes for transitioning in new vendors, maintaining communications, monitoring performance and contingency plans for addressing vendor underperformance.

Cost Optimization:

  • IT organizations are being asked to do more with less and just because your budget is being cut, doesn’t mean that the organization’s expectations of IT are any lower.  IT cost cuts are everyone’s cost cuts. When IT’s budget is slashed, everyone feels it and fiscally prudent IT leaders need to do their part, working collaboratively with the business to convey the full implications of IT cost cuts, to help mitigate risk and preserve IT’s fundamental capabilities. Operating with a cut budget is no time to just put your head down and soldier on. Broadcast the impact of your reduced spending.
  • Whether it is just IT, or the entire organization, when the ax falls, it is critical to be able to absorb the blow. Proactively cutting costs and demonstrating continuous pursuit of efficiencies helps build a strong relationship with the CFO and increases the business’ confidence in IT. Cost optimization gives you an opportunity to realistically trim the fat and the flaws of the IT organization and increase efficiency and performance.  Don’t try to cut everything all at once or your actions may have unintended consequences for the business. Understand the magnitude and urgency of your cost-cutting mandate before taking action.
  • With the above in mind, here are three steps to get some order to your cost management process:
  1. Know your mandate; Don’t start identifying potential cuts before truly understanding the external and internal drivers that are dictating the urgency and magnitude of the mandate.
  2. Build momentum with quick wins; Low-risk, quick-to-implement initiatives that enhance your reputation as a fiscally prudent IT leader – even if initial savings are small.
  3. Identify initiatives that will save your organization money; Conduct a high-level brainstorming session, harnessing the collective knowledge of the IT leadership team.

We Can Help

Our comprehensive selection of IT Effectiveness Assessments combined with our Assess, Measure, and Improve approach, enables tailored improvement plans to be established and implemented.  Given the importance of IT Financial Management as part of the IT Fitness Program, we recommend the following assessments:

  • CEO – CIO Alignment is designed to identify and close the gaps between your vision for IT and the business, and ensure alignment of goals and objectives.
  • CIO Business Vision is designed to assess the level of satisfaction across core IT services, support and relationships with key stakeholders to identify and better understand areas in need of improvement.
  • IT Management and Governance is designed to assess the importance and effectiveness of your core IT processes and to identify and better understand areas in need of improvement.

IT Ally™ has the experience and expertise to help small and medium-size businesses succeed in establishing and improving your IT Fitness Program. To get started, check out our IT Fitness Test to get a customized report or call us at 844-4ITALLY (844-448-2559) to continue this discussion and see how we can improve your IT fitness!

In our next blog, we will cover People and Resources and explore several capabilities including Human Resources Management, IT Organizational Design, Leadership Culture and Values and Knowledge Management.

[This article was originally published on itallyllc.com.]

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Software Licensing

software licensing

SMBs face many, if not more challenges than enterprise size businesses and have less resources to take on these challenges. As SMBs take greater advantage of technology to transform and grow their businesses they often incur another challenge that provides opportunity but is often fraught with peril. That challenge is the complex world of software licensing.

Over the years as technology has evolved from big mainframe computers to client server and network-based applications and today to cloud based applications software companies have evolved their pricing and licensing policies.

Making assumptions about how software licensing works or far worse ignoring software licensing can destroy an SMB, sucking up financial resources in fines, penalties, and unplanned licensing costs. Just as bad it can damage a company’s reputation exposing illegal license use or piracy.

The upside opportunities in software licensing are in taking advantage of software companies’ options for volume licensing, enterprise licensing and the world of open source. SMBs should make sure their CIO understands software licensing as it applies to your business and take all necessary steps to stay in compliance. Many 3rd party firms can provide guidance here including the software companies themselves. IT Ally™ is ready to assist you getting and staying on top of software licensing compliance.

Here are five key points about software licensing:

1. Look into volume licenses or site licenses whenever possible. These arrangements offer lower prices and often make administration tasks easier.

2. Know what “free” means. In the context of software licensing, free doesn’t refer to price. It means free in the sense of “free speech” and refers to the rights and restrictions imposed on using software.

3. Free or open-source software has fewer restrictions. If a program is released under a free software license or an open-source license, you generally don’t have to ask anyone’s permission to use it.

4. Read the End User License Agreement (EULA). It’s always a good idea to review these agreements, but it’s especially important to do so for one-off or small software purchases from less well-known companies. The EULA spells out what you can and can’t do with software. It covers everything from how many copies you can install to what the software company can do with your data and what additional software the company can install on your computer.

5. You may get secondary or home use rights. You may be able to install copies of the software on more than one computer, with certain restrictions. For example, you may be able to install a copy of the software on a home or portable computer, as long as it is not used at the same time as the software is used on your primary computer.

[This article was originally published on itallyllc.com.]

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Human Resource Management

A major challenge for businesses today is human resource management. In other words, actually acquiring and retaining employees with the technical skills and ability needed to transform an organization and prepare it for a digital future isn’t happening. This is particularly challenging for small to medium sized businesses at a time when unemployment is the lowest in decades.

CIOs in the greater Cincinnati area say the unemployment rate for technical skills is actually negative. McKinsey says, The first imperative in winning the war for technical talent is developing and retaining the team you have.” Beyond the traditional levers for human resource management, (competitive compensation, bonuses, coaching etc.) there are a range of other approaches to consider. Here are five that might be right for your business.

  1. Rotate high performers. This builds depth in your IT team and provides staff the opportunity to learn new skills, enhance resumes and add value to their career and your business.
  2. Train outside technology. Train technology staff on other aspects of your business. Invest in their knowledge and understanding of your customers, products, strategies, market position and operations.
  3. Provide exposure to the company’s most senior leaders. An irreplaceable motivator for the right, high performing technology staff.
  4. Support and foster technology passions. Encourage experimentation and innovation, make time for prototypes and proof-of-concept projects.
  5. Facilitate outside exposure. Encourage participation in industry and functional groups (standard setting boards, user groups) let your staff feel connection to the larger technology community.

IT Ally™ can help you develop an active plan for technology talent retention.

[This article was originally published on itallyllc.com.]
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8 Techniques To Identify Requirements For Your Projects

Establishing a successful business today involves undertaking projects to introduce innovation and achieve competitive advantage and differentiation. The Standish Group, a primary research advisory group reports that less than a third of IT projects were completed on time and on budget last year. For SMBs delivering successful projects is a major challenge. Wrike, the collaborative work management company says barely half IT project managers have any certification. That is quite often the case for small and medium size businesses. One key to meeting this challenge is to begin projects with a robust requirements gathering plan and process. Time spent gathering requirements can pay major dividends through the life cycle of the project. A multi-track approach to gathering requirements helps unearth hidden and hard to identify needs.

Here are eight techniques to use to identify requirements for your projects.

1 – Interviews – with a broad spectrum of stakeholders
2 – Questionnaires – carefully chosen, probing questions that allow respondents to reflect and put their thoughts in writing.
3 – Workshops – that will surface divergent opinions and contrasting views.
4 – User observation – ideally record the actions and activities that really take place during a process, look for artifacts posted in cubicles, keyboards, etc.
5 – Brainstorming – surface “what if” and blue-sky ideas that help break out of the current state context and consider new visionary ideas.
6 – Role playing – have people play different roles to understand how different parts of the system will need to work to support the integrated process.
7 – Use cases and scenarios – can be used to validate the envisioned process and identify exceptions and boundary cases that need to be considered.
8 – Prototyping – helps reverse engineer the requirements by identifying “I don’t know what I want but I don’t what that” features.

IT Ally™ has the resources and methodologies to help with requirement gathering and other critical phases of your IT project.

[This article was originally published on itallyllc.com.]

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Data Quality For SMBs

Business owners are hearing a lot today about the benefits that high-end data analysis and data mining hold for their companies. That might be true, but those benefits depend entirely on the quality of data that the business has collected. Unfortunately, this data is often not suitable to deliver those benefits. Data preparation is a process businesses need to adopt to bring value to their data. There is a whole array of tools and methods that can be employed for data preparation everything from Excel spread sheets to sophisticated data warehouses and dedicated data preparation tools. These tools can be used by a company’s IT department, business users or a combination of both.

Studies show that companies using technology for data preparation achieve the following benefits:
• Improved data driven decision making – 60%
• Easier data access – 56%
• Improved analytic efficiency and flexibility – 54%
• Improved time-to-insight – 50%
• Gaining a single complete view of relevant data – 48%
• Improved operational efficiency – 44%

[This article was originally published on itallyllc.com.]

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Winning Technology Management Strategies to Future Proof your Business

Future proof business.

The rapid evolution of emerging technologies and the impact this has had on business has propelled technology executives into the C suite across most industry sectors. This has generated much discussion and activity around the new responsibilities and skill sets technology executives must accept and master. A great deal has been written to advise and assist CIOs and CTOs become leaders and successful contributors, setting and executing strategy for businesses on the path to digital transformation.

All of this is positive and will strengthen the individuals and organizations to the extent that they adopt the advice. Not so much attention has been given to the other members of the C suite – CFOs, CEOs and Board members who are also incurring new responsibilities and the need for new skills as businesses develop models focused on emerging technologies.

CFOs in particular need to recognize the expanded responsibility they have as business uses technology to develop new deep relationships with customers, suppliers, employees, regulators and shareholders.

Navigating Digital Transformation

The technology chiefs will have responsibility for knowing, recommending and implementing technology – dealing with the detailed, system integration, deployment and operation of infrastructure and applications.

The CFO’s responsibility is the financial impact of digital transformation on the enterprise and that can be extensive in ways that never came into play before.

To be clear, the focus for the CFO and C suite should be the management of technology’s role in the business and not the technology itself. Technology is evolving rapidly and promising so many attractive potentials that it is tempting to take on an aggressive agenda seeking benefits across an array of technologies. By focusing on strategies to manage technology the C suite can safeguard and promote the future of the business.

The CFO is responsible for weighing the value of all technology investment. He or she must consider each investment in the context of the entire business. For example, a customer experience improvement must compete with a new marketing campaign and literally countless other ways of investing the business’s resources. Steps to reduce cost through automation or outsourcing need to consider the effect on customer service and ability to develop new product.

Near term decisions need to allow for strategies to future proof the business, to remain flexible and able to respond to changes in the market as customer needs change and technologies continue to evolve.

Managing Cyber Security and Risk

CFO cyber security.

Cyber security has become a major responsibility for the CFO and his peers. A security strategy to prevent compromise is essential. A strong combination of internal and external security protection must be in place. Equally important is a robust, rehearsed response plan for when security is compromised. The financial implications of a security breach are severe and far reaching.

Research conducted by the National Cyber Security Alliance found that as much as 60 percent of hacked small and medium-sized businesses go out of business after six months. While the CIO deals with the technical aspects of a breach, it will fall to the CFO to answer to the regulating authorities, banks, customers, and suppliers. and take steps necessary to restore the business to firm financial footing, if possible. Security also plays into the very valuation of the business. A security breach can have impact on the valuation of a business, and security must also be considered regarding mergers and acquisitions. A CFO must be on guard against acquiring a company that brings with it a significant security risk.

Given these increased responsibilities for navigating digital transformation, in addition to a full load of strategic and day to day operations what is a CFO to do? Well, don’t go it alone.
Small and medium size businesses can work with a partner who has knowledge and experience – real experience in situations where what they know and what they have done can be applied to their enterprise.

48 percent of SMBs plan to transform their business for a digital future yet many don’t understand what digital transformation really is.

Strategic Financial Management of Technology

CFOs can develop a playbook. Identifying areas to be addressed on a regular basis using internal and external resources. The CFO and C suite peers will learn to assess technologies that have real value for that business. They will know the cost of these technologies, the impact to the current and future bottom line and the opportunity cost of the choices they support.

They will learn to focus on the management of technology and best practices in IT governance, and portfolio management. The C suite team will become aware of and sensitive to IT debt built by deferring investment to replace aging infrastructure or legacy applications. They will avoid building liabilities that reduce the business’s valuation, increase risk and hinder the flexibility needed for the future of the business.

Mastering the Customer Experience

Master customer experience.

They will also become technology users familiar with and benefiting from data analytics, business intelligence and process automation. They will invest time and effort to learn what their customer’s experience is and how to improve it.

Partnering with a network of expert resources the C suite will demystify the hype around IoT, Artificial Intelligence, Block Chain and Machine Learning and understand when and if these technologies might have true meaning for their customers and add value to their enterprise.

To increase their ability to manage technology the CFO and peers will get involved, learning how emerging technologies are being used in their industry or similar industries. Environmental scans will assess what is being done by traditional and non-traditional competition.

By exercising this playbook periodically and repeatedly, the C suite will monitor progress being made, refining and maturing emerging technologies. This will promote development of an organization with the people and resources that can take advantage when the time is ready.

What We Can Achieve Together

If you are looking for assistance on the journey to digital transformation, IT Ally™ can help. For starters check out our IT Fitness Test and our Business Agility Test here. To learn more about IT Ally’s C Suite IT Advisor services, please visit itallyllc.com or, schedule a 30-minute consultation with one of our key advisors.

[This article was originally published on itallyllc.com.]

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4 Signs Your SMB Needs Cyber Advisory

In today’s world of rapidly advancing technology, cyber advisory is the last thing your SMB wants to think about. But in reality, that’s not ideal.

Many small and mid-size businesses don’t have systems in place if their business is under a cyber attack. In fact, one of our previous blog posts addresses this issue. Nearly 82 percent of SMBs don’t have a plan in the event of a cyber attack. As a result, up to 60 percent of SMBs go out of business within six months of an attack.

Cyber advisory is one of the best defenses your business can have, but is it right for your SMB? Here are some signs that it might be right for you from Neal O’Farrell, Managing Director of Cyber Advisory at IT Ally™.

Difficulty Communicating Risks

At times, it can be difficult for business leaders to communicate well in their organization, whether it’s to their employees or board members. For an IT leader, that can be especially true. Not everyone at the organization understands what their IT leader does, so when they try to communicate the need for more security, it may be hard for them to get that across to other colleagues. This can be especially hard if any technical problems your IT leader gets blamed for your SMB’s IT issues. If cybersecurity isn’t part of their priorities, they won’t bring it up.

This is where cyber advisory is important because advisors know how to communicate these issues, especially to boards who need to hear it the most. They can also bring forth the discussion if it hasn’t been brought up. Advisors will be more open and honest about issues and concerns since they aren’t part of the organization either.

C-Suite Lacks CSIO

If you’re an SMB, you likely don’t have a CSIO, which leads to cybersecurity not getting the attention it needs. Similar to the last sign, your management team may not have the right questions or insight to take on cybersecurity.

If you don’t need someone full-time, but you want someone who can give you the best IT and cybersecurity guidance possible, cyber advisory is the ideal solution.

No Contingency Plan

There’s a saying that “a goal without a plan is just a wish” and that holds true for contingency plans. When you see the statistics, it’s better to have a plan than no plan at all. Of course, you hope your SMB will never have to use it, but if it were to happen, it could not only save your business but also save your business money as you manage the ramifications.

Numerous studies show that response plans that are thought out and executed well can save an organization a lot of money when the inevitable happens. Cyber advisory services can be a great resource as your organization develops a plan. Advisors not only have the latest knowledge, but also the outside perspective. This allows them to help you create a plan that fits the needs of your organization.

Low Priority for Board

Some boards just don’t care when it comes to cybersecurity. They either think that an attack will never happen to them. Or, they expect a cyber attack to happen, but don’t have a plan and are willing to deal with the financial deficit that goes with it.

If your SMB brings in cyber advisory services, they can change the conversation in a language they understand. Advisors can push through cybersecurity roadblocks, help the board navigate security and privacy regulations, aid in decisions and bring a fresh, outside perspective on the organization. Boards not only find it helpful, but refreshing.

If these signs ring true for your SMB, IT Ally may be able to help. With over 30 years of experience and perspective, our cyber advisors can provide the best knowledge and insight for your organization. Get to know us today by contacting us or by signing up for a free consultation.

This blog is based on an IT Ally Podcast featuring Neal O’Farrell, Managing Director of Cyber Advisory at IT Ally. Listen to it here. 

[This article was originally published on itallyllc.com.]

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Cart-Path-Only: Is your SMB lacking business agility to sense and respond to market changes?

While on vacation in South Carolina visiting family and friends in Myrtle Beach and Hilton Head last week, I decided to pack my clubs and enjoy a few rounds of golf.

Our first stop was Myrtle Beach to visit my in-laws and play golf with my father-in-law, Garry, who is 80, and Griffin, my 17-year-old son – a cherished annual tradition. We arrived at the course to find it was a “cart-path-only” day due to recent heavy rains. To the non-golfers reading this, cart-path-only means that if you are driving a golf cart, you must stay on the paved path and cannot ride on the grass.

cart-path-agilityFor the average golfer like me, this is always a challenge. I am often uncertain which direction my ball will go. Therefore, having the use of a cart that can roam the course, creates more flexibility and more importantly, speeds up the pace of play. In this case, I also had not only to consider my play but my son, a novice and my father-in-law, ailing but accurate, now required to walk to his ball, though often in the fairway and easy to find. This round of “cart-path-only golf” had to end after nine holes. But never the less we had a great time together.

Golf mecca Hilton Head Island was the back end of our trip. Griffin and I booked an early, twosome tee time to beat the heat. Once again, we learned, at check-in, it was another “cart-path-only” day. Undeterred, we went on to play a very enjoyable if long and tiring 18-hole round of golf.

Upon reflecting on this experience, it got me thinking about the limitations, constraints and lack of flexibility of this “cart-path-only” approach and how it might apply to business. The objective to score low was now shared with the objective for fast play and less arduous completion of the course. To achieve this, you had to deliberately and successfully hit your ball within proximity of the cart path.

For a business that would mean constraint to a single strategy. You would have no option to adjust or to respond to market changes, locked into your lane unable to take advantage of opportunities.

I am certain the feelings I experienced on the course, being limited, slow to move and bound to a predefined path, would hamper and strangle a business trying to compete in today’s rapidly changing and dynamic market.

Defining Business Agility

In 2009, I wrote an article titled “Building an Agile Organization.” It proposed that “agile organizations have processes and structures that enable them to know what is going on both internally and externally, . . . and the mechanisms needed to act quickly on that knowledge.”

“ . . . evidence indicates that enterprises can best achieve agility by following basic management principles, using imagination to see an organization in a different light and having a willingness to adjust or change based on circumstances.”

I laid out 3 capabilities, key to pursuing and achieving business agility.

  • Learn to sense and respond
  • Emphasize improvement and innovation
  • Distribute and coordinate authority

Agility provides business the power to move quickly and easily; nimbleness. It is the ability of an organization to renew itself, adapt, change quickly and succeed in a rapidly evolving, ambiguous, turbulent environment.

Becoming an agile organization is easier said than done. But in my opinion, has the potential to yield superior business performance.

Agility Challenges and Impact

Agility has always been a hallmark of large successful, established companies. But with today’s levels of uncertainty, ambiguity, market volatility and globalization, agility is essential for any company. If you think you’re still in a corner where this doesn’t hold true, wait for the disruption to come. Tomorrow it will be relevant for you.

From a technology perspective, inflexible legacy IT systems, technical debt, antiquated infrastructure, insufficient skills and resource constraints, budgetary challenges, a short-term planning perspective, an ineffective governance process and data quality issues, could be the “cart-path-only” placards constraining your game.

It’s easy to envision how these limitations cause a competitive disadvantage. It results in the inability to meet changing customer needs, to address regulatory and compliance requirements, increased exposure to security risk and ultimately an inefficient and costly operating model.

Important Questions to Consider

If you are trying to master business agility or just want out of the “cart-path-only” mode; IT Ally™ can help.   For starters, here are a few questions from our Business Agility diagnostic that, at a minimum, tee off your own self-assessment.

  1. How quickly can your company respond to new opportunities/challenges?
  2. Who has primary responsibility for planning for change?
  3. What is the general state of your technology environment and how well do your major systems share data with each other?
  4. What is the primary factor in guiding alignment among decisions in your company?
  5. What visibility into industry and market trends do you have?

To learn more about Business Agility, please visit itallyllc.com. Or, schedule a 30-minute consultation with one of our key advisors.

[This article was originally published on itallyllc.com.]

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Introducing the IT Fitness Program for a small or mid-size business

Does your small or mid-size business need an IT Fitness Program? To help determine the answer, consider the following:

  • Have you built the muscle to protect and defend against cyber threats?
  • Do you have the agility to meet changing customer needs?
  • Are you lean enough to optimize value from your technology investments?

A question I was recently asked by an interviewer from comSpark was, “What do you think is the trend in technology that all industry leaders should be aware of right now?” My answer may surprise you. Below is an excerpt from my response which was published in the spring edition of Lead Magazine.

“It is difficult to just pick one. However, I believe that the most important trend is about leadership and culture, specifically, how we think about the management of technology versus the technology itself. One thing is certain – technology will continue to evolve. It has, quite frankly, outstripped the pace of technology management. Compared to disciplines such as finance and accounting, IT management is in its infancy. We, as business leaders should never get too enamored with one particular latest and greatest technology or trend.”

Perhaps you thought I would have responded with big data, virtual reality, artificial intelligence or another hot topic. Although these are transformational technologies in fashion today, do we know what will be fashionable tomorrow and in the future? Let’s not forget that many companies are still figuring out how to migrate from legacy technologies, move to the cloud, leverage e-commerce to expand their businesses and enhance their customers’ experience.

Earlier this year, IT Ally™ introduced a new diagnostic, called the IT Fitness Test, to assess the effectiveness of the IT management capabilities in your company. This diagnostic is based on industry frameworks such as COBiT and leverages research from leading IT analysts such as Info-Tech Research Group. The test is a way to gauge whether your IT capabilities need to build muscle, become leaner or agile or both; to secure your business, meet changing customer needs or maximize the value from your IT investments.  

Your IT fitness program will need to be tailored to best address your business objectives. Like a physical fitness program, if your goal is to build muscle, become leaner or agile, you will use a combination of things (diet, nutrition, exercise) to achieve your objectives. With IT fitness as with physical fitness, you want to avoid gimmicks like diet fads, lose-weight-quick pills or slick workout equipment. Whether you are determining the IT needs for your business or establishing your personal fitness program, the conversation should start with “What are the goals you are trying to accomplish?” to help you align your strategy to increase the chance of achieving those goals.  

What’s at stake for SMBs?

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The latest technology trends for SMBs, look similar to those I have seen in my past role as a CIO. SMBs are beginning to leverage artificial intelligence, data analytics, machine learning and robotics as key strategies to drive efficiency, scale and differentiation. Cloud adoption has become the platform for digital transformation. Cybersecurity risk is being proactively addressed and significant investment is being poured into improving the customer experience. Access to these technologies is becoming more available but there is a double-edged sword when figuring out how to leverage them properly.

For SMBs the need to manage IT, is paramount to success. Technology is changing rapidly and affecting every aspect of a business. SMB’s need to proactively leverage proven best practices to realize the full potential of their technology investment, regardless of the technology being adopted. For example, you are thinking about the vast amount of data available that can be leveraged to learn about your customer’s buying patterns or service preferences, but if you have no single version of the truth regarding your data, this will be a very difficult task. Or, you are trying to reduce the cycle time for a business process to create a unique customer experience, but your IT systems have been built in silos and are not integrated. This presents a significant challenge to achieving your goal. You get the idea, it will cost more, take longer, and you might never get there.

These are common issues, difficult to overcome in large organizations with plentiful IT and financial resources. So how is an SMB expected to cope, given their limited resources and expertise? Well don’t despair just yet – and that’s right, you have an Ally!

The IT Fitness Program for the SMB

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In the above examples, there are several IT Management capabilities that, if in place, could help realize these solutions faster, more cost effectively. At IT Ally, we have created a unique IT Fitness Program for SMBs that leverages Enterprise IT capabilities. Our IT Fitness Program identifies nine sections that we will describe in this and in subsequent blog posts. The nine sections are based on the COBiT Framework and best practices research from Info-Tech Research Group. They are:

  • Strategy and Governance
  • Financial Management
  • People and Resources
  • Service Planning and Architecture
  • Infrastructure and Operations
  • Security and Risk
  • Applications
  • Data and Business Intelligence
  • Portfolio and Project Management

As we introduce the IT Fitness Program for the SMB, let’s take a closer look at Strategy and Governance, a core foundational capability to establish alignment of business objectives and overall priorities for IT.

Strategy and Governance

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IT Strategy:

  • Traditionally, IT was seen as a separate support function. As such, IT strategy creation often happened in isolation and without a good understanding of the business. That’s no longer an option. A list of projects is not a strategic plan. A good strategy clearly links projects to goals. A compelling strategy proves more than IT’s contribution to business objectives. It justifies and prioritizes what needs to get accomplished and in what order.

IT Governance:

  • IT Governance is the number-one predictor of value generated by IT, yet many organizations struggle to organize their governance effectively. Optimizing IT governance is the most effective way to direct IT spend to provide the most value in producing or supporting business outcomes, yet it is rarely done well. IT governance needs to address the changing goals, risks and contextual environment of the business. A first step in establishing IT governance is to align IT with the goals of the enterprise. A proven methodology for accomplishing this is to establish a charter for IT that is built around the characteristics of the business.

Performance Measurement:

  • Service metrics are a key tool at IT’s disposal in establishing its value to the business yet are rarely designed and used for that purpose. Creating IT service metrics directly from desired stakeholder outcomes and business goals, written from the business perspective, using business language, is critical to ensuring that IT services are meeting business needs. Measuring, managing, and improving IT performance in relation to critical business success factors, with properly designed metrics, embeds IT in the value chain of the business and ensures IT’s focus on where and how it enables business outcomes.

IT Management and Policies:

  • Well conceived and enforced policies are a valuable communication tool. They help your organization spread the message of what needs to be done and how it should be done. Policies aren’t just your rules. They communicate how you do business. Use them to start a discussion with employees on how you do what you do.

Innovation:

  • Stakeholders expect more from IT today than technology resource management and risk mitigation. New technology available today provides an opportunity for IT to improve and innovate in many, if not all, areas of a business. An IT strategy aligned with the goals of a business will highlight opportunities for innovation IT will be viewed, not as a cost center, but as a center of innovation, vital to the growth and prosperity of the business.

Stakeholder Relations:

  • We have stressed IT governance and business goal alignment as important components of an IT strategy. The governance and goals are not internal to the IT function but belong to an array of stakeholders inside and outside the business. They have different needs, sometimes competing with each other that must be addressed by IT leadership. The relationship IT builds and maintains with these stakeholders will determine the success of the IT strategy. Identifying and prioritizing stakeholders; listening to them and managing their changing needs will be the primary agenda of IT governance.

We Can Help

Our comprehensive selection of IT Effectiveness Assessments combined with our Assess, Measure, and Improve approach, enables tailored improvement plans to be established and implemented. Given the importance of alignment as part of the IT Strategy and Governance Fitness Program, we recommend the following assessments:

  • CEO – CIO Alignment is designed to identify and close the gaps between your vision for IT and the business and to ensure alignment of goals and objectives.
  • CIO Business Vision is designed to assess the level of satisfaction across core IT services, support and relationships with key stakeholders to identify and better understand areas in need of improvement.

IT Ally has the experience and expertise to help small and medium-size businesses succeed in establishing and improving your IT Fitness Program. To get started, check out our “IT Fitness Test” to get a customized report or call us at 844-4ITALLY to continue this discussion and see how we can improve your IT fitness!

In our next blog, we will cover Financial Management and explore several capabilities including Business Value, Cost and Budget Management, Vendor Management and Cost Optimization.

[This article was originally published on itallyllc.com.]

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Podcast: Inside The IT Ally Business Model – An Interview with the Founder, Michael Fillios

Listen to this IT Ally™ Podcast interview to learn more about the formation of IT Ally and how they are helping SMB’s to leverage technology for strategic advantage.

Read The Podcast Transcript

Hello, I’m John Connors, writer and commentator on technology in the business community.

I’m here today with Michael Fillios, founder and CEO of IT Ally, the recently established company dedicated to providing competitive advantage in technology to small and medium size businesses.

I’m going to ask Michael what makes IT Ally unique, capable, and the right choice for SMBs. Michael, by way of introduction can you tell us how IT Ally came about and what you expect to accomplish?

Basically, if you look at the importance of the small and medium businesses in our economy today there are number factors that we should consider.

1. Statistics show 3 out of every 4 hires in our economy are coming from small businesses. 

2. This demographic certainly represents a significant portion of our economy in that it supports a lot of our GDP growth and

3, just the sheer size and scale of businesses that exist, nearly thirty million, just in the United States alone, represents a significant portion of our overall market. 

That being said, there are number of companies that have attempted to service this market space, particularly from an IT consulting perspective, and that have not had wide success.  My view on that is that these companies were established businesses servicing much larger clients and decided that they wanted to go downstream into markets to grow their businesses. 

Yet that still left the infrastructure, overhead and complexity that just, quite frankly, is not attractive to the small business owner. 

That’s one of the things that makes IT Ally more unique is that we were conceived with the sole intent of servicing small and medium business owners and spent a lot of time in developing the appropriate offers that would allow these organizations to not only afford but also digest the service offerings and that is where some of the uniqueness of our business model comes into play. And, now we’ve begun to see wide interest in our offering. 

Not only in the areas of IT but quite frankly, in areas outside of IT, in other functional areas such as legal, HR, finance, sales, etcetera. 

So with that, the nature of the IT Ally model, essentially what we are doing is providing. enterprise level capabilities and talent to the everyday business and we’re able to do this, as I said, by packaging up our offerings such that they are affordable and digestible to these businesses largely on a subscription basis which is how we provide them. 

Michael, you have a broad-based background in large businesses and in various sectors. Tell us about your experience and how it has prepared you and IT Ally to provide leadership for smaller scale enterprises?

I believe the modern day IT leader needs to possess a variety of skills and capabilities to be successful in today’s dynamic and challenging environment.  My IT leadership experience came as an accident as I was asked to lead an ERP evaluation, selection and implementation for a $30M global pharmaceutical company where I was in charge of Accounting.  I still revert back to this experience as it was the beginning of thinking about IT from a business perspective meaning, what outcomes did we want to achieve as a business and how was technology going to enable them to be realized 

Although, at the time, the technology landscape was also evolving we never got enamored with the technology itself.  My early experience in auditing and leading the accounting function, being a management consultant, a start up entrepreneur and ultimately a corporate CIO in large global companies, has given me a very unique set of experiences of seeing IT in many different facets. 

From acquisitions, to divestitures, through bankruptcy and emergence, across several decades of technology evolution, I have benefited from applying technology to solving many different business challenges including, growth, cost containment, risk mitigation and customer experience which quite frankly are many of the same challenges that SMB’s are facing today. 

Leaders of small and medium sized businesses have several priorities vying for attention in today’s environment. And technology is complex and rapidly changing. How can IT Ally assist these leaders in making technology challenges more approachable as one of the many factors they have to deal with?

The challenge for SMB’s is that most of these organizations don’t need to have a full time IT leader certainly not a CIO, Chief Information Security Officer, roles like this, but quite frankly have some of the same complexities that a fortune 500 company would. In fact, most recent trends reported by SMB Group on the Top 10 trends in technology for small and medium businesses suggest that many of these companies are faced with some of the same decisions around how to leverage technology such as artificial intelligence, analytics, big data as well as many others on the list including robotics or internet of things not to mention having to do it in a secure fashion. 

So, these are very daunting challenges for most Fortune 500 CIOs never mind small business that are thinking about how do we leverage these wonderful technologies to help us grow, differentiate and secure our businesses.

So, that’s the opportunity,  how do we bring folks that have had this experience, we’re talking about individuals with 25 – 30 years’ experience, that have been in wide ranging situations, understand how business runs and want to apply that experience and capability to these organizations that need it to not only survive but effectively to thrive against the continuous competition that arises in the marketplace on a daily basis. 

So that in a nutshell is IT Ally. We are continuously adding to our offerings, not only in conducting assessments of what a world class IT organization needs to look like at a small or medium business. But also providing other services, education and ways that we can provide full services to our partners and our clients. 

Confronted with the complexity of technology, an SMB leader might be concerned with the financial commitment needed to take on a robust technology agenda. Can you talk about the cost and value proposition IT Ally offers?

One of the advantages of our business model is that we have built from the ground up exclusively to service the small and mid size business market.  Because of this, we have really focused on packaging our offerings so that they are not only affordable, but also digestible to our clients.   

When we look at the SMB market, we define it by the number of employees.  For example, small businesses are those with 1-49 employees and medium size businesses are with 50-499 employees.  With this level of diversity, it is essential to have offerings that will scale up and down, be repeatable, yet still allow for some level of tailoring to meet our clients needs. 

For example, we offer several fractional models to access our CIO’s, CTO’s and CISO’s on a subscription basis depending on the level of scope and engagement necessary to deliver value to the client. 

Michael, we have talked about your business experience as an executive, successful in managing technology and deriving benefit for businesses but you can’t duplicate that success yourself across an SMB client base. What resources does IT Ally bring that can operate in the trenches to leverage your expertise into successful, cost effective initiatives?

That’s a great question and one that we have been very deliberate about as we conceived the business from day one.  To your point, we wanted to be very careful to not create a business that wouldn’t scale beyond one person.  To that end, we have created a business model that enables our subject matter experts to leverage our content and intellectual property to create a consistent and repeatable experience for our clients when delivering our services.  Naturally, we are very critical about the quality of the folks we bring into our network and make sure that we are vetting them accordingly.  The IT industry is a rather close-knit group particularly for those with 25-30 years experience and it is pretty easy to reference check individuals as you typically know them or know someone who does.

You have alluded to the importance of an organization’s cultural readiness to adopt and benefit from technology. Can you discuss that further, and tell us how IT Ally can assist businesses in attaining the necessary level of cultural readiness?

It is true that viewing IT as a strategic weapon starts with the tone at the top of the leadership team. In small business, this is typically the owner, president, CFO or other leadership team member.  I have seen a wide-ranging view of the importance of technology over my career across different industries and size organizations and sometimes it does take an outside voice or an event to trigger this thinking. 

For example, some companies are more passive as it relates to information security until such time an unfortunate event occurs such as a breach of data, or vulnerability is exposed.  Or it could be a competitor that introduces a new application that dramatically changes the customer experience that threatens your very existence or value proposition.   

The role that IT Ally can play is to provide an outside in perspective that helps an organization to see technology differently – not just as an enabler to automate an existing process, or to increase productivity, but also a way to grow, differentiate and secure your business.  Much of this starts with taking a very fact based and data driven view, leveraging our IT Effectiveness assessments to create a baseline that can highlight potential weaknesses and areas for improvement.  Armed with this data and our experienced team, we can typically be very compelling in shifting this mindset. 

Michael, your response indicates that a successful technology agenda extends beyond infrastructure and software and permeates many areas of an enterprise. Do you see IT Ally providing services outside the traditional IT environment? If so / where might that be and how is IT Ally equipped and qualified to add value in meeting those needs?

Yes, we do and have been developing a network of other leaders that can support other functions such as Legal, Marketing, HR, Accounting and Sales.  In fact, these partners take a very similar approach to servicing their clients on a fractional basis, making it affordable for SMB’s to access these services on a demand basis.   These partners are very complementary to our business and allow us to provide a full spectrum of services to meet most of the needs of our clients.  In effect, we are all trusted advisors and become a valuable extension of the company’s leadership team. 

Tell us more about the partner ecosystem and how that is becoming an important asset to IT Ally and your clients. Do you see that continuing to expand nationally and internationally?

To that end we’ve also established a pretty extensive partnership network that ultimately extends what we do, that allows us to serve our clients more completely. So, where we don’t provide or don’t desire to provide those capabilities we’ve got companies in our portfolio of partners that would be happy to service them. Again, these are in areas that are in complementary businesses perhaps in other functional areas such as in legal services or HR.

But it enables IT Ally and my overall team to really provide a holistic view to business owners and help them in ways that go beyond the areas that we directly serve. So, the partner ecosystem is extremely important to us we are adding partners on almost a daily basis and coming in contact with organizations that want to engage and be a part of this overall ecosystem. 

Michael, / IF this discussion has raised the interest of SMB leaders who want to learn more or take next steps with IT Ally to assess their technology position and opportunities, what message would you leave them as to how to proceed?

I would say take us for a test drive.  Our offerings are priced in such a way that allows an organization to start small in an agile like fashion to experience our value proposition.  We are very confident that we can deliver value to our clients and welcome the opportunity to earn a position as a trusted advisor to their business. 

Thank you, Michael for a stimulating discussion and to you, our listener. Contact Michael Fillios and IT Ally at 844-4ITALLY or 844.448.4559 or email info@itallyllc.com.

[This article was originally published on itallyllc.com.]

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