4 signs that your IT is costing you money

Could the latest iPad make your sales team more productive? Could a bespoke content management system allow your teams on other sides of the world to collaborate more effectively on projects? Would the latest financial services software enable your fund managers to work more efficiently or make better investment decisions? The answer to all is yes but whilst money well spent on IT projects can bring significant return on investment, all too often we witness waste.

In most businesses the IT team report directly into finance and your investment in technology is likely to be among your biggest capital expenditure. There is no doubt that the right IT investments can help drive new business initiatives, reduce costs and win new customers. But how should CFOs be assessing return on investment?

As a CFO, it is critical that you understand your IT spend and how it corresponds to your earnings.  So what are the things to look out for as a CFO- here are Synetec’s four sure signs that your IT may be costing instead of making you money:

Every IT proposal is presented as a business necessity

A hard-nosed CFO who is only interested in the numbers will often be presented exactly what he asks for; subjective data to justify every IT investment as business critical. Any proposal can be written in such a way as to make expenditure appear essential. Do you have in place a clear decision making process that clearly sets out how you account for certain costs and benefits within the business?

You are spending money on things that aren’t making you money

If your capital expenditure doesn’t relate to improved or sustained efficiency or new revenue then it’s not making an impact on how your business makes money and it’s almost certainly a luxury, not a necessity.

Before embarking on any new IT project set out the top 5 revenue streams in your business and assess the impact your potential IT spend will make in enhancing these revenues. If the answer is negligible, then you’re probably best off investing your capital elsewhere.

Your existing IT systems are slowing you down

In order to understand what’s costing you money it’s important to know what’s impacting upon your existing efficiencies. In order to do that you need to benchmark your existing system performance against accepted standards and that means speaking to your end-users.

Make decisions with the business objective in mind. Quick-fix solutions might be circumventing a non-essential problem which can potentially be bypassed or eliminated all together if its not making your business more efficient.

Unless you stay tuned into how your IT impacts upon the day to day running of the business and keep abreast of wider industry news and developments then you’re likely to miss obvious signs. Pay particular attention to systems and processes that are taking too long.

You’re adopting the latest technology without seeing any long-term benefit

For a handful of businesses there may be real kudos in being seen as the first to implement the latest innovation, but being an early adopter of new technology is risky and could prove a costly experiment for your company. Remember the earlier you adopt new technology the more expensive it’s going to be, the less proven it is in the marketplace and the less likely you will receive suitable support. At the same time as new technology is going for premium prices, the cost of perfectly suitable current versions will be driven lower, so look out for reputable bargains.

Every IT professional wants to work with the latest technology and leading edge projects but ensure that every business decision has a sound financial reasoning rather than simply fluffing the CV of IT-team members. Ask yourself, what are the benefits of the system you’re considering investing in and assess these versus your main revenue streams.

George Toursoulopoulos is a financial technology specialist and Director at Synetec, one of the UK’s leading providers of bespoke financial services software solutions. George started his career with US-software giant EDS, becoming the youngest manager in the company’s history and has since gone on to lead Synetec where he has continued to deliver world-class solutions for a number of the UK’s most prestigious Hedge Funds and Family Offices. George is a regular conference speaker on the implementation of technology within the financial services industry with a particular focus on delivering ROI and improving key business drivers. George has lectured on Microsoft development and has served as a director on numerous company boards.

Synetec feature in Business Matters Magazine

Synetec Director George Toursoulopoulos has recently written two articles for Business Matters Magazine, one of the UK's most widely read and respected business publications.

In the articles, published in February, George discusses how CFO's can best identify and plan for IT expenditure.

The articles are featured here:

4 Signs that Your IT is Costing You Money

How to choose your software developer; an insider’s guide

If you have any questions about your software systems or hiring developers then contact George or one of the Synetec team on +44 208 1444 206.


 

Nimble Agile teams can save you serious money

Agile is one of the most widely practiced software development methodologies, promoting a project-management approach built upon the principle of cycles of continual inspection and adaptation. It allows teams of developers to better deliver high-quality software through a leadership and business philosophy that encourages greater stakeholder engagement, teamwork and accountability.

The ultimate objective is that the software development is aligned with the needs of both you as the client but also the requirements of the end-users within your business, those fund managers that will be using the software day in and day out.

Whilst all projects are impacted upon by the experience and execution of the team managing it, Agile as an iteration rather than process driven methodology is particularly susceptible to human failings which could cost you thousands of pounds in waste. With efficiency and saving you money in mind, here are Synetec’s top 4 tips for getting your people started on the right foot:

Cutting corners doesn’t cut cost

IT budgets are shrinking and time-to-market demands are getting shorter, as such Agile has offered many clients a perceived ‘silver bullet’. The flexibility of an Agile project places more emphasis on the professionalism and skill of your development team- so never substitute a proven track records for cowboys who cut corners to save pennies. Remember that bad software coding creates long-term problems, adds cost and complexity. Rome wasn't built in a day, and neither are most robust software systems. Financial software is inherently complex, often with major penalties if things go wrong so cutting corners on time or testing never pays off.

Big isn’t always better

At the same watch out for big software consulting companies. They may have teams of talented software developers but that doesn't mean you will get them working on your project. With Agile requiring a partnership between developer and client, be sure to select a team of developers that understand and compliment your business.

Flexibility comes with reasonable expectations

The great benefit of Agile is that you – the customer – can influence the deliverables throughout the development process. The software is continually evolving right up until delivery BUT- and it’s a big BUT- change can only come with ‘reasonable’ expectation.  Sweeping  last-minute changes will impact costs and/or timings, regardless of the development methodology.

Agile methodologies use an iterative approach, where small pieces of software are produced at short intervals. Tackle your project in small chunks of features that can easily be developed, changed and tested; and the system as a whole will grow more effectively and result in a more reliable system.

Most successful projects involve ownership not just buy-in

Using Agile, you as the client get to see the system working from an early stage, and play a critical part in its development, it’s evolution and ultimately if the software doesn’t deliver the end-user experience you want, then you are also part of the problem. Agile brings a democracy and accountability to software development where you as the client are a key part of the design process and should soon be encouraged to have a sense of ownership over the project. Agile methodologies rely on regular presentation sessions by the developer to the project stakeholders where these stakeholders can comment on the presented software, request changes to it and decide features that will be subsequently developed. This is where you can really make a difference, and ensure you get the software you need.

End-user experience should be part of the Vision

Know what you need your software system to achieve. The clearer and more specific your requirements, the more likely you will get a system you are happy with. Often the most challenging parts of the software development process are understanding the end-users requirements from your initial client brief. Not only do different client’s requirements come with varying degrees of technical complexity but in most cases the main client contact is not a typical end user of the software. As such translating the requirements can incur multiple cycles as comments from within the team are fed back into the process- an effective and efficient way to combat this is by ensuring one of your fund managers or software users takes part in the initial brief and testing at each stage.

These may all seem like common-sense points but it is remarkable just how many tens of thousands of pounds we see clients wasting each year, simply because of not effectively deploying the correct human resources at the right time.

George Toursoulopoulos is a financial technology specialist and Director at Synetec, one of the UK’s leading providers of bespoke financial services software solutions. George started his career with US-software giant EDS, becoming the youngest manager in the company’s history and has since gone on to lead Synetec where he has continued to deliver world-class solutions for a number of the UK’s most prestigious Hedge Funds and Family Offices. George is a regular conference speaker on the implementation of technology within the financial services industry with a particular focus on delivering ROI and improving key business drivers. George has lectured on Microsoft development and has served as a director on numerous company boards.

How to choose your software developer; an insider’s guide

Choosing a software developer is often a difficult task – much like choosing the builder for your dream home. If you go to the extreme of hiring the cheapest developers you will most likely end up with an amateur and a nightmare on your hands. At the other end of the scale, very few businesses can afford vanity projects by working with the biggest names in the business.

When it comes to choosing which software development company you work with; there are plenty of options but make sure you do some thorough research or you risk wasting money and damaging your businesses reputation.

The first place to start is by asking your contacts who they have worked with in the same way as most builders will come on the recommendation of friends or family. Whether the developer you have in mind is someone you found on a Google search or from a referral there is some basic homework you should do when first scoping out potential developers; consider this a pre-due diligence check:

1. Ask around- is this a referral, if not what is the word on the ground? While there are plenty of developers around, most will be known in their specialist vertical and will have published a portfolio of work or thought leadership. Also ensure you do an online search, many clients with good and bad experiences will leave comments.

2. Clients- who have they previously worked with and were they happy? Client testimonials on their website or LinkedIn recommendations are a useful way to gauge whether the business is reputable and held in high esteem. In the same way as Check-a- Trade sites gives home-owners piece of mind, use professional forums and profiles to establish a picture of your developer.

3. Staffing- do they outsource work and do they have the right size team to deliver on your project? A software development team doesn’t need to be large but it needs to be sufficiently well staffed with experienced developers to deliver on your project. No one wants the foundations laid, only to find your builder has been called off to another job. Again the companies LinkedIn company page will give you an insight into how the business is managed.

4. Location and duration- where are they based and how long have they been there? An exclusive address is not a sign of an exceptional developer, but the better the address and more importantly the longer they have been established, the clearer the indication about the status and stability of the business.

Once you’ve done your basic homework it’s time to get in contact and ask the real questions. From the outset be very afraid of developers promising the world; if it sounds too good to be true, our experience tells us that it usually is. In addition to this remember that the bigger your project, the more you have at stake, so this may is a good opportunity to ask the following more in depth questions:

5. Affiliations- if the developer’s website doesn’t carry a list of qualifications and affiliations then be sure to ask for these. Likewise be sure to ask for a copy of the business’ professional liability insurance and check that covers the scope of your project.

6. Technical Expertise- your developers should be able to demonstrate an expertise in current technologies and how the right development tools can be used to deliver on your business requirements. Whilst the latest technology can be exciting, you would never commission a builder to build you a house out of cardboard without first examining their portfolio of previous successful projects to ensure they are still standing!

7. Support Services- not only should your developer be technically capable but they should also offer a comprehensive professional support service from first contact, to post project. This should include excellent communication and support during the development phase, and a clear understanding of the recommended maintenance services available after launch.

8. Flexible payments- staggered payment are an industry norm. Be very weary of any developer who asks for substantial or full payment up front, you may find yourself paying for his dream home; not yours!

9. Availability of your developer- finally, a busy order book is a sign of a developer with a stable business but be warned of those that are ‘snowed under’, you may find deadlines being pushed back and a breakdown in basic communication. When agreeing project scope, especially for urgent projects, ensure that the developer has the time and resources to fully commit to the project without compromising to meet deadlines.