Ok, the title is a little provocative, I admit. I just wanted to get you here.
The truth is that many managers, strategist and company owners have an outdated idea of what IT is and how they should relate technology to business.
About 10 – 15 years ago I switched from the client side to the supplier side of IT & technology services. While becoming an entrepreneur I also became a supplier. All of a sudden, I needed to sell that which I was previously almost desperate to buy, and to my surprise, it was not as easy as I would have imagined.
The C-level manager, product owners, project managers and company owners where not only reluctant to buy IT services from a young (kind of) guy, they were actually reluctant to buy IT services in general.
Over the years I have not seen any real change in mindset. Quite the contrary, the first question when a dialogue is initiated is not seldom – “How much will it cost?”
Although I certainly understand that managers, and company owners especially are preoccupied with expenses and they obviously work to increase profit margins and improve the state of their companies, I just can´t help to think that the initial question is just simply the wrong one, and it comes from a misconception of what technology really is.
The right question is naturally – How much can we earn/save? – because, technology is not a cost, it is an investment. Imagine your company, 100% analogue and use that scenario to calculate for how much revenue it would give you.
But what if you cannot answer the question? It is certainly a lot more difficult to answer than, how much will it cost? Not necessarily.
I suggest that what companies need is not only to track their costs, but start to imagine if you did not have them. Technology is about solving problems and alleviating us, humans, from tedious tasks – but also to solve worldly problems like the environmental issues at hand, energy problems, legal problems, just about any type of problem has a technological solution.
Over the years, my most loyal and equally the most productive clients understand that when I am approaching them with a suggestion – they have something to gain. This is because I am a developer and an entrepreneur and like other entrepreneurs and developers – I like to solve problems.
So, where am I going with all of this? Well, from observing other people that I think are both great technical minds and great entrepreneurs I have identified a few common denominators in a thought process that I believe is mostly shared. A thought process that can help, just about anyone to better think about IT services as investments.
First, what sparks the idea to go ahead and invest into an IT solution?
Reducing cost? Lowering environmental impact? Increasing revenue? Attracting talent? Going into a new market? Expanding into new verticals? Opening a new office? Moving?
Whichever it may be, something sparks the idea. What happens then, is that most people say... “sigh, how much will it cost?” Here is the difference, what if you thought about this as an opportunity, imagine the following process.
Answers to these questions will help set the budget for you are trying to achieve and can make great conditional legal tools in discussions with your supplier.
But… investing in technology is not easy. We have to consider the process of purchasing software and processes, implementing systems and verifying them, and training staff to use them. Factors like budgets, deadlines, market timing and many others make up a big challenge.
So, have to we ensure that our IT investments does not turn into IT costs?
From my experience, these 6 guidelines below will help you to greatly reduce the risk of this happening.
1. Understand and document what you are trying to achieve from a business perspective
Measure, and make sure you have a KPI for whatever situation you have now and set a goal that you are aiming for. In order to determine whether or not you have achieved what you initially set out to solve, we need a proper way to measure.
2. Break down your business problems into smaller parts – Epics or User Stories
Especially if you believe you have a very demanding challenge, break it down!
Follow these two steps:
1. Stakeholders - Identify people involved in the processes or business areas you are trying to improve, and document this (If you solve this problem, whose life will become easier?).
2. Start by writing down any problem you think is preventing you from having a higher profit margin. Then, try to find logical areas that belong together and; if your overall business goal is to increase profit margin – find bottlenecks in your processes (cost reduction), find improvements in marketing (revenue increase), need to convert better? (Revenue increase), etc. Do not focus on solutions, focus on high-level necessities and prioritise them after how important they are to solve (which ones are most likely to increase your margins and which ones are less likely). Document this.
Try to figure out what smaller parts needs to be resolved in order for you to succeed in meeting the bigger challenge at hand. Depending on the size of the projects, these could be either Epics or User Stories.
3. Find and document high-level solutions to each of the Epics or User Stories
You have documented your problems, or perceived problems, that is excellent. We need to focus on having solutions for each of the parts from the problem area you just broke down.
I suggest you split this section into two parts.
a) UX If not before, this is probably where you want to introduce a role like a UX Researcher into the project. Trust me on this, over time it will have a strong positive financial impact.
I am sure that many UX Researchers will shake their heads and think that they should be present way earlier, but I disagree, and this is why – my experience from this tells me that it is a good idea to let the business managers/owners think about their business before we start researching and even thinking about solutions.
For business people, it may seem that we are starting over when the researcher comes in at this stage but I believe you will in the end have a much broader image of the problems at hand.
b) Solutions Before this point, no real technical expertise is really required, but at this point it gets a little tricky – to properly be able to imagine and suggest high-level technical solutions there is one ideal profile to carry out this assignment.
The role may have different names; Business Analysts, Solution Architect, CTO, Technical Advisor. Whatever the title may be, at this point I firmly believe that the person best suited to carry out this assignment has a decent understanding of your business and business in general but more so, it needs to be a technically proficient person with more than good understanding of information technology and software solutions. I motivate this with a question; how can one propose technical solutions if not aware of the current technical paradigms, what can be done, how and to what extent?
When you have completed step 3 you are at a point where you should be ready to start thinking about technical solutions. Most probably you have some UX Research document and a proposed high-level solution consisting of a loose roadmap and maybe some non-functional prototypes of micro-solutions that together form a documentational foundation.
These documents, wireframes, ideas and possible solutions can be reviewed again by a business/technology (B/T) adroit.
I have my own preference when estimating software solutions, but however the task is executed, ideally – an estimate should be the product of this work and it should specify on a component basis how much time will it most likely take to implement the solutions.
Maybe, at this point you will think, wow – this is just too expensive. Let´s quit and run.
Breath and take a second to look at the entire picture. Yes, IT takes time, so does construction.
Let us look at it from a data perspective, you should have all the components broken down by know, you don´t need to do all at once. Go back to the priority you made in step 1, if you feel the cost is too great right now, ask you B/T person what you may cut at this point and take later?
Calculate, what costs are you able to cover now and how what effect will this have in a foreseeable future on your profit margin, go back to point 1. Leave the less prioritized task for later.
This work can seem tedious and difficult and you may need a lot of help from your B/T person, but like everything else - practice makes perfect better.
After some work with the estimate, you have finally arrived at a point where you feel comfortable executing an agile project plan and start delivering value with a team – Great!
However, and unfortunately, you cannot rest just yet. As a Product Owner or manager responsible on the business side, your presence is needed. Questions will arise and paths may take unexpected turns.
Request that you team continuously demo for you, regardless if they use Scrum, KanBan or any other agile/lean process. Be on track! Ask how much time has been consumed.
A good project manager can efficiently track what has been done and benchmark against value produced to determine whether or not we are on track. Did the task just completed take as much time as initially expected, if not – from where will theses hours be taken?
In any agile process you need to continuously adjust, but never stop producing value.
If you have read to this point, you are probably really eager to learn or maybe just to point out where I am wrong, whichever may be the case, I surely do appreciate your feedback, thoughts and ideas. Thank you for reading!