There’s a question many of us were asked when we were kids: “Which would you rather have – one million dollars, or a penny doubled every day for a month?” Remember?
The million dollars seemed like the most obvious answer – an easy choice – the low-hanging fruit. Little did we know that, with a little patience and a penny, we would end up, at the end of thirty days of doubling, with more than five times that million dollars, and even though my first exposure to that question was now decades ago, our culture’s current appetite for instant gratification has only increased.
When it comes to corporate budgets, the easy choice is always the one with the most immediate return. We’ve seen that projects with a payoff that takes longer than the current budget year are less likely to be approved. Whether in IT, or HR, Marketing, or any other group, dealing with long-term objectives can be difficult. In other words, take the million and leave the other four million on the table because we don’t have time to wait (the metaphorical) thirty days.
Because we solve problems with technology-based solutions, we’re going to focus on what is going on in IT. We’ve reviewed performance improvement research being done by Gartner, and it is absolutely clear that there’s a challenge with providing IT services that tie to business value – with a shrinking IT budget.
In fact, trending data shows that IT Operations budgets are expected to do more with less – a term you’ve heard for the past ten years (at least), but a challenge still apparently un-met. While many recommendations were offered at Gartner, one prominent recommendation is a focus on process management; the value delivered to the business by identifying redundant tasks, automating, measuring and improving them within your IT operations is absolutely quantifiable.
So… why aren’t more IT organizations going to the business with more process improvement projects? Why aren’t more of those projects being approved?
Consider this:
- The more that IT can intertwine itself with actual business process, the more inoculated IT is against budget cuts
- The closer that IT can get to customer-facing processes, i.e. improving the customer experience, providing additional services to customers, streamlining purchasing, returning, exchanging, and paying, the more obvious value IT provides to the business
Gartner provides an example of how IT can cut costs by automating process, and, while we all know “you can’t cost-cut your way to prosperity,” increasing the bottom line is always a good thing.
From Gartner: “Consider the potential savings of converting highly manual, approval-intensive, multi-touch activities like equipment requests and purchases into an automated fulfillment model. In this sample scenario, the time and labor from purchase request to fulfillment includes five hours of active management at a labor rate that averages $30 per hour. A single instance can cost upward of $150 per request. In an environment where 100 requests are processed per month, the labor cost can run in excess of $150,000 per year. When automation can reduce the required human interactions by 30%, $50,000 savings per year, per purchase instance is a reasonable outcome.” http://www.gartner.com/technology/research/business-process-improvement.jsp
What if IT could create multiples of this example – the metaphorical penny?
Something else to consider: process improvement can, in many cases, be done with software and services that IT is already providing to the business. Go for incremental improvement over time, and you’ll end up with a much better result.
All you have to do is start with a penny. We’ll help you double it, and double it, and….