Whatever your views about the outcome of the referendum, whether you think it is a good thing or not, the UK is definitely in for a period of uncertainty, which overall is probably a bad thing for businesses, investors and consumers alike. How might this impact your IT service management strategy?
Share performances in certain business sectors are out performing others; there are clear winners and losers in different sectors since the decision to leave the EU was made. The financial markets are extremely turbulent, probably as expected; a bad thing? If your business exports its goods then the fall in the value of the pound is possibly a good thing, however if your business relies on importing raw materials then the fall in the value of the pound is possibly a bad thing. In any event large changes in the value of the pound are not conducive to accurate business planning and forecasting. Of course our future prosperity as a nation will depend on the actual terms that our leaders manage to negotiate for our exit from the EU.
There are already signs that the cost of Hardware and Software sourced from overseas will increase in line with the fall in the value of the pound which will have a direct impact on IT budgets and spending forecasts for the coming year. There are many questions: How exposed is your department to a disproportionate increase in running cost? Exactly what will be the financial impact and can you afford it? Which proposed projects need to be reviewed and business cases re-submitted? What about data security rules? Is data in EU data centres going to continue to be acceptable? What is your plan for the coming months? How are you going to approach this conundrum? So many questions, but what are the answers?
Unfortunately there is no magic wand that you can wave to answer all the questions, that is why you get paid the big bucks.., the truth is you cannot change your IT infrastructure quickly hence the need for strategic thinking and planning. Predicting future trends in technology and aligning resources with company goals and ambitions is itself challenging enough without having to consider the effect of external influences like government legislation or BREXIT has on your business and budgets. Suffice to say strategy needs to deliver effective plans in line with the organisations objectives within specific economic conditions to facilitate planning to exploit opportunities and mitigate risk, but did you plan for BREXIT?
As discussed previously the value of the pound against major currencies notably the USD and Euro has plummeted post BREXIT, indications are that overseas sourced IT components will increase in cost possibly up to 20%. Would a policy to source hardware, software and services from the UK wherever possible mitigate the risk of major price increases inflicted by the fall in the value of the pound in the future?
In these uncertain times IT Executives need to take stock and review plans. It is prudent to review your top ten running costs especially support contracts and agree extended fixed price terms wherever possible. It also makes sense to review proposed projects in terms of risk/cost and negative risk/cost analysis. I am sure as IT professionals you are already on the case.
One thing that is not so obvious however, is the unknown direction that the business may go as a result of the Brexit vote. In turbulent market conditions successful businesses need to be nimble and able to react to opportunities and adopt changes quickly. This means that business systems must be able to be re-configured quickly and easily. Larger businesses still running legacy mainframes and applications are clearly unable to react quickly, any changes to these environments take time and come with significant cost. Also medium sized businesses that have outdated Client Server applications are unable to make changes quickly, although changes do come with lower cost than the businesses running mainframes, typically these businesses however are still not nimble enough to exploit unforeseen opportunities. Even those companies that have adopted the internet revolution and run browser based applications are not in the clear, although are best placed to react.
Reacting to the post Brexit Landscape
Modifying legacy mainframe or client server applications to react to the new business landscape post Brexit will typically require external consultants or dedicated internal IT staff. Consultants would spend weeks if not months scoping the work and several more months delivering the modified solution, which may or may not actually fit your requirements, while all this time your nimble competitor, who adopted modern, easily tailorable systems that can be modified by internal staff in a day or two or sometimes hours, without code changes or complex scripting, would be in the market taking your market share. By the time your organisation is finished paying consultants the market has moved on, your organisation is out of the game.
It should be noted however that not all modern browser based applications come with comprehensive and intuitive Administration features. When change is required most end users are presented with two options, either go on expensive training courses to learn a bespoke scripting language or pay the vendor a consultancy rate to make the changes. Both options are time consuming and expensive. A big part of IT Strategy must be to buy into systems that are web based and can be re-configured without requiring specialist knowledge via an intuitive user interface utilising point and click and drag and drop technology.
Systems such as ‘Simplisys Service Desk’ lead a new breed of innovative flexible software applications that are designed to enable internal stake holders to modify the system as and when required. Simplisys Service Desk is ‘Simply Smart’ by design, the familiar Administration interface allows System Administrators to make changes quickly with no need to learn bespoke scripting languages or to go on long training courses at considerable expense. Moreover Simplisys Service Desk is developed and supported in the UK. Hosted service customers enjoy peace of mind with dedicated databases and client data stored in secure UK data centres.
There are certain tactical steps that are required today as follows:
1. Review exposure to price increase buy evaluating country of origin of hardware and components and software.
2. Review the risk/cost and negative risk/cost assessments of proposed projects that have been approved and scheduled for go live in the medium term, 12 – 24 months.
3. Review support renewal dates and prices for top 10 key products and negotiate extended term fixed price contracts for as long as reasonably practical.
4. Cost of repatriating data to UK if necessary.
As well as above future strategic planning should include consideration to moving to a more nimble IT infrastructure taking into consideration the following:
1. Review of web based applications.
2. Cloud, On-premise or Hybrid Cloud options.
3. Where ever possible preference to UK source.
4. Adopt systems with modern UI in the administration functions that do not require either external consultants or bespoke training to re-configure.