Avoiding the traps in IT spending

IT trap

April 08, 2013

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A company finds a new piece of software on the market which, on the face of it, looks ideal for their needs. Failing to follow up references, essentially because the software is so new, the product turns out to be not quite what the company was after. Employees never make as much use of it as they could have and what isn’t exactly a wasted investment turns out to be yet another product that didn’t deliver on its promise.

Sound familiar?

Unfortunately, this tends to be the story with much of the money spent on IT. So what can your business do to ensure its getting plenty of bangs for its bucks?

Perhaps the most important point is to ensure that money spent on IT is focused on those parts of the company where it can add most value. A survey by KCom, a managed services communication provider, shows that more than a quarter of managers say the biggest barrier to more IT investment is convincing the board that the existing spend is earning its keep. When planning new investment in IT, consider two questions.

  1. Will this investment help us increase top-line sales – for example, by aiding the sales, marketing or product fulfilment teams?
  2. Will this investment help us to become more productive in what we do and cut costs – for example, in areas such as accounting and administration?

If the answer to either question is “yes” then it’s likely that it will be possible to make a strong business case for the spending. Establish your objectives at the outset. You need to understand what the project is supposed to achieve and how its success will be judged.

This is important, not least to prevent the kind of “scope creep” which allows IT projects to run out of control – over time and over budget. The way to avoid scope creep is to look ahead at the outset and ensure that the project will meet the needs of the business not only today but also as it evolves three to five years down the line.

With a background in IT and Finance, Peter Bartram is a prolific writer and former editor. He’s written 21 books and well over 3,000 feature articles for newspapers and magazines.