How To Maximize Your Expensive Technology Investment
Besides payroll, your organization’s next largest spend is probably for technology. Businesses are continually expanding their capabilities to keep up with their customers’ expectations and make employees more efficient. Organizations typically accomplish this with some type of technology. But does the organization have a process to ensure that technology meets the organization’s strategy and is being fully utilized?
This is especially important if each department has the authority to purchase its own technology (potentially in a silo). Was there sufficient consideration and communication with groups such as information security, internal audit, risk/compliance, and legal?
4 Steps To Maximizing Your Technology Investment
Here are four steps you can take to help make sure you’re maximizing your technology spend:
1. Make an inventory of all of the technology (both on-premise and in the cloud) being used/paid for throughout the entire organization.
- Compile a list of software installed on servers and desktops/laptops; also cloud-based software
- Check “Accounts Payable” records to see what technology is being paid for; ensure the amounts are valid and correct
- Review the operating expense (OpEx) budget to see what technology expenses and subscriptions are planned for
2. Now that you have a good inventory, reconcile across departments.
- Eliminate duplicate software – for example, if two departments are using different learning management systems (LMS), could they both be using the same LMS?
- Eliminate unused software – if the business stopped using the software (and started using something else), then return the license. This will eliminate the cloud-based subscription cost, or the ~20% maintenance fee for on-premise software
- Reconcile licenses (e.g. Microsoft 365, Adobe) with a list of active employees; no licenses for terminated employees, and verify for employees who transferred and whose access has changed
- Combine individual licenses for tiered/volume pricing – departments may have purchased individual licenses, but the organization will normally get better tiered/volume pricing if the licenses are consolidated together
3. Next, make sure the organization is using the software.
- Fully utilize software – for example, don’t just use your customer relationship management (CRM) as a very expensive Rolodex
- If you own commercial off-the-shelf (COTS) software and want additional functionality, talk with the vendor about options:
- If it benefits other clients and gets added to the base software, there should be no additional cost, but need to determine the timeline of when this could be completed
- If it gets added as custom code, the timeline should be quicker, but there will normally be a maintenance cost of ~20%
- Make sure there is updated user/system documentation (especially if custom code)
- Keep the software current with upgrades and patches
- Ensure there are various forms of training for employees so they know how to use software; some ideas are in my “Beyond The User Manual” article
4. For future technology purchases (especially if departments have the authority to purchase their own software)…
- Review the capital expense (CapEx) budget to see what major technology expenditures/projects are planned for
- Have a central request process for software over a certain dollar amount to be vetted by a steering committee to ensure it meets the organization’s strategy/plan
- Involve IT – infrastructure requirements, configuration settings, etc.
- Keep information security, internal audit, risk/compliance, and legal in the loop; it’s better to have their input upfront rather than afterward when an incident occurs; it’s cheaper to add internal controls during the planning stage rather than after implementation.
- Once implemented, be sure to add the new software to the inventory list.
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