When Is It Time to Spend On IT?

When Is It Time to Spend On IT?

In our Government Practice, we find that as budgets get tighter, there is an increased spend on technology and infrastructure geared toward creating efficiencies. This seems logical inasmuch as spending some money to save more money really makes sense as I write it. However, this isn’t often the case with privately owned companies. More often than not, we find that as the economy slows, IT spending decreases as the focus tends to shift to revenue generating activities.

As our economy continues to slow (or at least continues to wallow in a state of extreme uncertainty) and we continue to see major banks failing, it’s increasingly difficult for small and medium sized businesses to get and maintain lines of credit. As a result, banks are essentially demanding detailed, accurate financial reports from their borrowers.  It’s been a long time since we’ve seen so much activity around Financial Reporting as a key requirement in system evaluations and migrations. Interestingly, all of these evaluations have led to pretty substantial operational improvements in addition to addressing the core financial reporting need.

In good times, it may not pay to stop and evaluate whether to fix a process or hire another body, whether our cost data is even close to accurate or whether we’re efficiently using material -- it’s always the bad times that help us focus very clearly on our costs and true performance. This increased focus on financial performance and achieving some incremental (or in many cases substantial) operational improvements can never be a bad thing. In fact, these small things may help see us through the hard times.