Avoid Byte Wise and Gig Foolish

June 2, 2015 by

“We are lost, but we’re making good time.” Star Trek V

In the quest for efficiency and effectiveness, take the long term view. Starting with the realization that saving pennies doesn’t always mean saving dollars. And saving dollars right now doesn’t always mean saving dollars in the long run.

  1. Don’t undervalue people. If you are stingy on recognition and compensation, the deficit in employee engagement will far outweigh any ‘savings.’ A healthy balance sheet requires a healthy workforce.
  2. Don’t ignore vendor advice. You know your business best, but the vendor knows their technology best. Partner your business and IT portfolio knowledge with their product knowledge to implement and maintain the technology to positive affect. This means spending time with the right vendor resources and taking full advantage of relevant briefings, reviews and documentation.
  3. Think long and hard before not purchasing maintenance on products. Yes, you can save money, but do a pro-forma over a number of years to see what total cost of ownership is with and without maintenance. And don’t ignore internal costs (people) in this equation. Just because something can be done internally doesn’t a) mean it should and b) mean it’s cheaper.
  4. Open source and free ware are cheap like puppies and kittens. They are just different business models than more traditional licensing. They still cost money. As with maintenance decisions, do a multi-year analysis to ensure understanding of total cost of ownership. And don’t forget the qualitative aspects, like ‘does this vendor have a services eco-system’?
  5. Don’t eschew standard and best practices, but don’t go overboard either. Practices like project management, vendor management, continuous improvement, service management need to be well-known and understood in the context of your business. It’s like flossing your teeth; maybe not the scintillating thing, but necessary. You have to have these practices (yes, you do); designed and implemented in a manner that leverages the practices to positive affect in your organization. Don’t get too rigid or else you suffocate in administrivia; don’t be too loose or you’ll have chaos that leads to customer disenchantment.
  6. DIY as last resort. Unless you are a tech company building tech products, think long and hard before building custom technology, particularly in the ERP space. Answer these questions first: Do we already have something that does (most) of this? Do we have something that could be configured differently or an additional module purchased to do (most) of this? Can we buy something to do this? Do we really need to do this; is it differentiating to our business?

Last word: If you are looking for savings as part of a decision, be sure it’s clear what ‘savings’ means. Expense reduction that can be seen on the bottom line? Cost avoidance for the future? Freeing up personnel to spend more time on strategy? And once you know, track it.

“Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.” Steven R Covey

Asides:

I’m trying out the new Surface 3. We’ll see if it can replace my laptop. Watch this space.

Is T-Mobile making AT&T and Verizon nervous? Well, with John Legere at T-Mobile’s helm, it will at least be interesting to watch.

 

 

 

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