Is your technology portfolio really balanced?
/Spending is easy. The hard part is getting the balance right between operations, insurance and investment.
Operations support day to day business. If email breaks, "the server goes down", or the phones fail, everyone knows about it and the problem gets attention until it's fixed.
Insurance is risk mitigation. Protection against unforeseen setbacks. Sadly, this only gets attention if either 1) a disaster occurs or 2) a compliance regime mandates. If you suffer a Security breach, you could easily spend a lot more to recover than you would have spent on basic avoidance measures—and you may never fully recover customer trust. Likewise, Business continuity avoids a temporary shutdown of operations. And poor project discipline will result in overruns in budget and time—avoidable with the right preparation.
Investments, of course, return greater value over time. This is the heart of running a successful business. Spending on improved customer experience, ways of doing more with less, or building products that can return a healthy margin.
It's all too easy to spend what we need to support daily operations, keep our fingers crossed that we'll avoid (or survive) unforeseen setbacks, and get around to an investment when we have the spare cash.
But if we overlook mitigation and investment, the business will be hurt. Perhaps not today, maybe a slow, hardly unnoticeable degradation.
And that's the real challenge. Because things aren't breaking in front of our eyes, it's out of sight out of mind.
Which is why we have to pay special attention.
Check your technology portfolio
Take a look at your technology portfolio and ask:
- What are you spending on to insure against unforeseen setbacks?
- How does your budget address investment in future benefits?
- Which spends could you cut without hurting your day-to-day business?
If less than 10% of your total technology spend goes on insurance, think through some disaster scenarios and consider whether your risks are really mitigated. If you're investing less than 50% of your total spend, your returns could be higher, perhaps much higher. And if you can comfortably cut any operational spends, what could happen if you moved the funds to investment or insurance?
Call me on +1 647 400 2514 during my office hours—Friday between 9 and noon EST—and we can talk about ways to balance your technology portfolio.
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