Monkey money management – IT spending goes bananas

I would like to talk about how the IT way of making money decisions still has a lot of improvement potential.

IT spenders out there, always balance cost and value/quality, if you always buy the cheapest solution and are just holding on to your money a monkey could replace you!

Imagine a nice jungle setting, there is a group of monkeys hanging around, relaxing, playing and in general do what monkeys normally do. Suddenly a bag of money, coins, hits the ground from nowhere and all the monkeys goes totally bananas. Everyone is trying to get their hands on as many coins as possible, there are even some brawls. When the bag of money is empty, the scene is again calm. The monkeys are getting to know the new stuff, of course trying to eat it, but since it doesn’t taste well and also hurt their teeth they decide just to hold on to the coins. They know its valuable but they have no idea how to use it so they just hold on to it really tight.

Ok, so what am I saying with this? Isn’t It obvious folks… hehe… it only takes a monkey if all you guys want to do is hold on to the money. However, if you want to use the coins, your budget, in a clever way. Its often hard to maintain a professional respect for people only focusing on always buying the cheapest solution or doing destructive bargaining, without considering for one second what they are actually doing. So many times I have seen good agreements with sensible service levels and a nice win-win getting chopped up to lower the price 10%. There is no winner in this game, except for the monkey that gets to chew on some additional coins.

Things are cheap for a reason; this is a universal rule people!

So, we have already established that you cannot simply hold on to the money, you need to do something clever with it. Like invest in development of your products, services, your quality or any other aspect of your business. Many times when I talk about projects with managers they very soon start to talk about the ROI. The Return Of Investment, the time it takes to get the investment back. I always smile and ask them, if that is what you are looking for, isn’t it ever smarter not to risk the money, I mean since you are focused on when you will be getting the money back. Most people understand, it’s to focus on why we are investing, what we are trying to achieve, the actual reason, for investing, and when I do the ROI-joke people normally laugh, say “touché” and we can have a real conversation about what they want to do.

If all you are looking for is the ROI of your investment, it’s a lot smarter not to invest at all.

Within the IT area, we are spending a lot of money. Because the things we use in the infrastructure, but unfortunately very often we are unsure about the exact business value of our services, how they are used and other vital aspects we really need to know to facilitate using our money in best possible way.

First of all, everything we do should in some way be linked to business value, being an IT Service management nerd I really like the balance between what in ITIL is called Utility and Warranty. The value discussion will be subject for another blog soon, but for now I would like to say that we always need to focus equally on cost and what we are supposed to deliver.

When Internal IT service provider starts acting as a service provider, delivering services to a client, much is won!

As always, I would also like to mention the communication problem that still exists between the business and IT. This really matters for managing your resources in a clever and proactive way. In a previous blog post about the tough life for CIOs, I talked about the importance of getting to know your customer, the business. Knowing how, when and for what they use our services, how critical their use is, often called PBA (Patterns of Business Activity) is the key to calibrate, streamline and optimize our services which of course includes our infrastructure.

The key is never to buy a lot of extra servers, just in case, the key is to have a very good relationship with the business.

Ok, to sum things up, don’t be monkey, use your money wisely and make sure that you balance things, do not focus on cost, ROI without also considering quality/business value and the actual purpose of your investment. Also, the CIO that really knows the business and how they are using the IS/IT services will most likely be a happy, successful and relaxed CIO.

Stay smart people!

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