High-performance organizations tend to view information technology as a key strategic asset, a source of both operational excellence and competitive advantage.
Tydas consultants work with top management to help organizations adopt that mindset and achieve greater business value from IT. We see IT as a critical contributor to the implementation of strategy and we assume that IT planning must focus on improving the firm’s value and performance.
We believe that bold, value-creating approaches to IT should bring boardroom-relevant criteria to IT investments and help organizations to "think bigger" about IT's ability to improve operating results. The work we do with our clients every day demonstrates that IT at its best can drive significant organizational change through increased productivity, enhanced efficiency and new ways of addressing and solving problems.
Optimizing IT Investment
Useful questions on IT spending usually focus less on how much to spend and more on how best to manage what is spent. Many studies conclude that high-performance businesses actually spend less per capita on IT than their lower performing peers. However, those organizations do spend more on targeted investments with an emphasis on value creation. The goal shifts from cost containment and reduction to improving the business's operating results.
In an economic downturn, organizations may freeze total IT spending or mandate cost reductions that eliminate initiatives on which future growth depends. Tydas research suggests that such indiscriminate approaches to budget cutting may well result in higher spending later. Such decisions can result in deteriorating IT capabilities and productivity and increasing maintenance costs to support aging applications and technologies.
Conversely, in the race to achieve competitive advantage during boom times, IT spending may grow unchecked in the absence of the discipline that value-driven investment planning requires. This approach can prove just as costly to long-term business performance as do sweeping IT cost-reduction programs in hard times.
Tydas works with clients to help them balance short- and medium-term investment agendas within parameters appropriate for the economic and competitive climate. By challenging discretionary vs non-discretionary IT budget assumptions, we work with organizations to devise clear investment road maps toward selective, strategic spending that creates value.
The advantages of this approach are usually immediate and measurable in:
reducing wasteful or non-strategic spending to release funds for critical value-creating initiatives;
ensuring that mission-critical IT capabilities are preserved in the short term; and
enhanced strategic capabilities in the mid-term as the company's IT core is strengthened.
Transforming IT to Delivery Improved Capability and Business Results
Tydas consultants operate on the premise that the firm can usually maintain strong, competitive IT capabilities and still meet demands for reduced IT spending. We believe this is especially true if the organization takes a bold, comprehensive approach that examines every facet of IT to ensure its systems connect directly to business goals, culture, and workforce performance.
Top-level organizational commitment to solving today's problems in a way that puts IT in the mainstream of tomorrow's corporate strategy, combined with necessary investment, often a moderate one, can pay off quickly and handsomely. Addressing the seemingly contradictory demands of maintaining strong, competitive IT capabilities while still reducing IT spending can generate significant long-term savings in IT expenditures.