Spring has sprung (as it always does) alongside a new budget year's (similarly inevitable) arrival. So, as SMEs set budgets for the next Q and beyond, where should they focus technology spend? There is no one size fits all solution, but our ideas – and next steps – could inform your discussions.
1/ Cut costs – if you can
Sounds obvious, but where – and by how much? Inflation is driving the cost reduction strategies of 39% of these CFOs but ultimately, a business must focus on (obligatory) nondiscretionary and (aspirational) spending.
Discretionary spend includes new projects, capabilities, or services, and would appear an obvious target for the axe, if cuts are needed. Indeed, this Gartner piece recommends targeting ‘immediate impact’ in your IT budget planning.
But if expansion is part of a wider corporate growth strategy, then it may be a case of finding a better way of doing it. The business can even address nondiscretionary expenses, such as IT infrastructure and operations by reducing usage or improving efficiencies.
2/ Protect what matters most…
IT is a tricky one. While budgets will obviously grow to meet increasing costs and avoid losing market space, any increase is likely to be funnelled in one of two directions.
On one hand there’s the forward-thinking innovation customers expect and the market demands. It’s no secret that artificial intelligence (AI) and machine learning (ML) are popular with 48% of CIOs and CTOs, according to leading analysts. CIOs in this survey put cybersecurity as the No1 priority, up from the second spot in the previous year.
On the other, some are choosing to shore up what they have against volatility. The pandemic, trade wars, climate change and other internal and external changes cause the uncertainty risk-averse businesses guard against. That’s why the same survey found 66% of leaders increasing their spend on cyber/information security to protect current IT investments, rather than expanding the portfolio.
3/ … And remove what does not.
As we have discussed, the direction of IT travel is towards new, powerful technologies and cloud-based services that replace legacy systems and end-of-life applications and redundant software.
The problem is these technologies remain resolutely in place, adding to complexity and expense as older licences drain budget earmarked for future innovation.
“Technical debt sinks real time and money into systems and applications that simply weren’t built for the scale and speed required by modern business,” says this expert.
These archaic technologies also increase cybercrime vulnerability by expanding the attack surface. Reducing this ‘technical debt’ is key to supporting future investment, warns CIO.com.
Often this programme of work is included in rationalizing IT estates by cloud migration which, of course, also support the future innovation every company wants, and boosting the cybersecurity profile. Unfortunately, every SME needs that too.
4/ Skill up (If you can)
While IT is increasingly automated, people are still vital to keeping the systems running and troubleshooting every day, while delivering the innovation the company will need in the future. The problem is that there are more vacancies than people to fill them. The skills gap has long been A Thing and it is getting no better.
Having great ideas is one thing; accessing the knowledge, skills and – most importantly – bandwidth to deliver them can be quite another. Automation is some way from doing much beyond sparing our brighter minds from the most repetitive of tasks; delegating your genius, lightbulb moments, even to AI, is not a reality just yet. And some think that is not the smart move anyway.
5/ Get expert help (You can definitely do that)
Purple Crane are an IT specialist SME. We help those SMEs in the business of IT. Our big thing is creating bespoke software that does whatever our customers need it to do. And that could solve many of the challenges above.
Purple Crane can be your outsourced IT dept. We resolve the tickets holding you back while you take the business forward. How does that help you? Depends on what you need. As partners, we can support a cloud migration that could access all the efficiency and cybersecurity benefits you need, this or any year.
IT is going to be a constant theme next quarter. Choose an expert adviser.