The Virtual CIO: Is there a case for outsourced IT Direction and Management?

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IT Strategy in small & medium businesses

When it comes to IT strategy, many small and medium businesses go with the flow or take their lead from suppliers or salespeople, whose main interest is in selling products or services to earn their commission. Is this in the long term interests of the company? Could another solution suit them better and which offers the best value?

For quite a few years now many SMEs have paid for outsourced managed IT services contracts which cover maintenance and support of their systems.  These can be a great solution and can work very well, so the company does not need to hire a dedicated IT person.

Alternatively, as the company grows staff may be recruited to look after IT Support internally.  Again, this is great.  It fills an immediate need and the company’s systems can run smoothly for a while.

However, IT as a strategy has failed to engage the board members of many companies. Consequently board level decisions are sometimes made without any, or sufficient input, from an independent or impartial IT executive. This can have a number of implications:

  • Unnecessary costs
  • Unnecessary technology
    • It’s new and shiny … it must be good for our business … really?
  • Assumptions about
    • business processes and problems
    • ongoing maintenance requirements
    • available solutions
    • how to support business growth
    • how to reduce costs

It is likely that the directors, or executives, of the company realise these issues, but they will not have the budget to recruit an IT Director, Technology Director, CIO or CTO. Even if they could find someone there would be insufficient work to keep that person busy.

With the current rate of change of technology and applications, IT direction has become a requirement for every company regardless of size. A tailored IT strategy for a business should be part of the organisation’s business planning and will be critical in their productivity and effectiveness. What works for one company will not work for all.

So, who is currently looking after the long term best interests of the company with regard to IT?  Who understands the business direction and what technology will be best to support it going forward?  Who performs the analysis to ensure that what supplier A recommends is the best fit for the organisation? Traditionally this has fallen to the finance director or CFO. Now I don’t want to upset finance directors, particularly as they sign off on my invoices, but this is not their core strength and their focus is naturally elsewhere.

Enter the Virtual CIO & CTO

To address this gap a new breed of service has emerged in the IT industry where experienced professionals, not salesman, are offering a consulting service to remedy this very problem. At Analysis Logic we call this the Virtual CIO or CTO (Chief Information Officer or Chief Technology Officer) service and can also offer an Interim IT Manager option.

A Virtual CIO, CTO or IT Director works in the company’s interest to get the best value from the existing investment, to ensure business continuity or disaster recovery (BC/DR) plans are in place, and will work. They also ensure that future technology projects are properly aligned with and determined by the business needs. Opportunities are identified to do things in a more efficient and cost effective way and align appropriate technologies to support business growth.

They offer direction and leadership for:

  • ICT policy, roadmaps and budget
  • Business Analysis
  • Vendor Management for hardware, software, cloud services, etc.
  • Resource Management
  • Infrastructure requirements and development
  • Expert input for
    • Product and service development
    • Business strategy
    • Mergers, acquisitions and divestments
    • Significant events (e.g. moving premises)
  • In-house vs outsource competitive analysis
  • …

The best thing about these Virtual CTOs/CIOs/IT Directors is the flexibility on offer. For a small business an occasional or ad-hoc consultation is probably enough. For example, a one-off audit to reassure the board that things are as they should be in their IT estate.

In larger SMEs an ongoing regular and dedicated block of time may be required. This is scaled to the actual needs of each individual company and can be as little as a few hours per month. They pay only for what they need. Indeed needs come and go so there may be a generally low commitment, which ramps up to cover projects, then ramps down again. They are not full-time or part-time, you get them for the right-time.

A good Virtual CIO should be vendor and technology agnostic. They will be truly independent and will bring an unbiased perspective to your technology needs. Of course they will use their knowledge and experience to guide the process, but they will always be open to alternative approaches. They won’t recommend something just because it is popular, or their standard way of doing things. They will analyse the requirements and pick the solution that offers the optimal performance vs cost benefit.

With purse strings being tightened in the current market can you afford not to consider ways to improve your use of IT to drive efficiency/productivity and save money?

 

Scott Petrie is Managing Director of Analysis Logic Limited, an Information Technology (IT) and Operational Technology (OT) company based in Aberdeen, Scotland, UK. He has over 25 years’ experience of successful design, development, implementation, support and management of technology solutions in industry and has a rare ability to bridge business and technical disciplines to create better understanding on both sides.

Article originally published on LinkedIn May 6, 2015: https://www.linkedin.com/pulse/case-outsourced-direction-management-scott-petrie