How to manage your IT as an investment portfolio

Information technology (IT) often accounts for more than 10 percent of an organization’s spending; however, many companies are managing this as an expense rather than an investment.

“You don’t want to think of IT just as a single expense item on your profit and loss statement. Instead, look at it as an ongoing investment that needs to be managed,” says Paul Sems, general manager at Blue Technologies Smart Solutions.

And like any other investment, IT decisions are not easy, so business leaders need to ask:

  • What is the return going to be?
  • How is it going to perform?
  • Is this the right investment when considering other investments I’ve made?
  • What are the risks associated with it?

Only by actively tracking performance to make smart investment decisions, choosing the right portfolio pieces that work well together and managing all risks will you be able to get the most value out of IT.

Smart Business spoke with Sems about how to update your business practices now to maximize this part of your business.

Where do you see companies struggle with IT management?

When businesses see IT only as an expense, they probably don’t monitor performance after installing a new technology. They don’t  have a real-time dashboard that shows how much IT investments are saving or costing.

Another mistake is buying technology without considering the company’s entire IT platform. For instance, several department managers might acquire the technology tool he or she needs without talking to anyone else. The result may be different tools with a lot of overlap.

The last area is risk. When you make financial investments, you take time to understand the risk associated with each investment. From an IT perspective, you need tools to measure your risk as it relates to the impact on your security, data loss, data privacy, productivity or team morale.

Many times executives assume that IT investments are being managed properly, but how do they know? That’s why processes to document, monitor and certify can ensure everything is working as it should.

What can businesses do to improve the way they manage IT?

Companies need the right set of tools, so management can understand exactly how well systems are performing in order to use that information to make decisions. They need to know which systems need to be replaced and how much value improving those systems will add. And by monitoring an IT investment’s performance and improvement, business leaders can see real results and an investment’s worth.

These tools must provide decision-makers with relevant business information, not just how many open tickets were closed or how many CPUs are available. Dashboard reports should tell you: How much did we invest in IT and how does that align with our IT strategy? How much are we investing per customer, per order and per employee?

A company also should implement a portfolio approach to new and existing IT investments to ensure that all investments in your portfolio complement, improve value and reduce risk. It may take some added design and engineering services, but your investment needs a strategy behind it.

Finally, do an IT risk assessment so you know exactly what could go wrong, how to mitigate those risks and how to react if something negative occurs.

How can firms get help with implementing these new tools and processes?

Every organization needs to make sure it has a clear picture of its IT investments. Often, IT departments are very busy, so important-but-not-urgent tasks like managing IT investments can go on the back burner. That’s why you may need to reach out to technology partners who can help produce these types of results. Partners can help you get access to performance benchmarks, implement ongoing monitoring and present ideas for maximizing your IT investments.

Once these metrics are in place, you could get immediate results, such as being able to take corrective actions to mitigate IT risk. You also will have the right data available to aid in making the best decisions about how new hardware or software work with existing technology. And most importantly, you’ll know you’re doing everything you can to get the most of out of your IT investments.

Insights Technology is brought to you by Blue Technologies Smart Solutions