[TriLUG] [OT] What's the value of IT?

[Justis Peters]

Jim,

By saying that small business owners only care about saving money, I
think you're only articulating one side of the coin. The spirit of what
I think you're saying is that business owners only care about what
positively impacts the bottom line. This can be accomplished both
through saving money and through increasing revenues.

One of the things I distinctly like about how Phillip is approaching
this question is that he is asking what value we can create through the
use of information technology. Value *can* be in terms of efficiency,
which can save money, but even the real value of efficiency can
sometimes be in faster response times, higher customer retention, and
higher quality deliverables within a given time frame.

There are a few stereotypes one can make about small businesses vs.
large businesses. The hyper-focus on "saving money" is a common one and
is frequently what determines which businesses stay tiny and which
experience rapid growth. There's a slippery slope between "saving money"
and paralysis. After all, the easiest way to save money as a small
business is to fire everyone and close the doors.

The businesses that grow rapidly are those who are able to nimbly
evaluate opportunity-cost as the opportunities stream past them. At some
point, they reach out and invest in an opportunity that has an outsized
ROI. In some cases, those opportunities can include information
technology as a core component of execution.

An interesting flip-side stereotype is that large businesses only care
about the "obvious" bottom line and won't invest in things with
intangible ROI. While this isn't entirely true, and you can find
examples of companies investing in innovation programs, employee
satisfaction perks, and philanthropic pursuits, it's generally true that
somebody at least tries to spin these in terms of a "business case"
before signing a check. Small business owners tend to be similarly
hyper-focused on the bottom line, but you're more likely to find people
within the SMB market who will buy something just because it's shiny or
because it makes them feel like they quit their day job for the right
reasons. Even if they make up some napkin-sketch business case as to why
it makes sense for their bottom line, there's a lot more emotion and
personality that goes into the purchasing decisions in a small business.

You can certainly make a good living by selling exclusively to people
who focus on "saving money", but you'll also find yourself eternally
justifying prices and speaking to customers who only care about that. I
encourage you to look at the positive, the "value creation", side of the
equation. I'm looking forward to seeing what Phillip comes up with.

Kind regards,
Justis Peters

Jim Ray wrote:
> Small business owners don't care about IT. Small business owners care
> about saving money. If we IT people don't save small business owners
> money, we are an expense that will go away. The small businesses that
> don't get it probably will not get it and must feel pain before they
> have a gain from what we IT people do.
>
> Correlating IT to saving money is the only avenue to reach small
> business owners.
>
>
> -----Original Message-----
> From: trilug-bounces at trilug.org [mailto:trilug-bounces at trilug.org] On
> Behalf Of Phillip Rhodes
> Sent: Wednesday, May 13, 2009 4:40 PM
> To: Triangle Linux Users Group General Discussion
> Cc: Triangle Java User's Group
> Subject: Re: [TriLUG] [OT] What's the value of IT?
>
> Matt Frye wrote:
>
>   
>> The question of the value of IT is really pretty elastic.  It's 
>> connected, at the very least, to the mission of the parent 
>> organization and how well (or badly) IT is integrated into that 
>> mission, and more directly, to the way the IT organization is 
>> "designed" around the needs of the organization (the focus of my 
>> book).
>>
>>     
>
> So the core thing I'm trying to sort out - which I don't think I've
> articulated well so far - is this:
>
> How to explain to a small business owner, who isn't particularly tech
> savvy, and who's business isn't inherently technology oriented at all,
> how IT / high-tech can assist them in making their business more
> successful (eg, growth, productivity, profit, whatever metric you like).
>
> I'm thinking about things like a flower shop, construction company /
> general contractor, bakery, etc.
>
> I'd like to think it would be possible to distil out a core set of basic
> principles regarding how IT is used to improve the performance of
> companies, and turn that into something understandable by anybody even
> if they don't have a lot of existing "tech savvy."
>
>   
>> The tricky thing about value, especially in IT, is that it's relative.
>>  What the IT Director sees as a valuable pursuit may be seen as a 
>> waste of time by a CEO.  Does the CEO know what he's talking about?
>> Maybe not.  Ok, probably not, but of course he's the boss, so no 
>> matter how much of a wacko he is, his opinion matters.
>>     
>
>
> Good point!
>
>   
>> I look forward to seeing more discussion on these matters in a wiki,
>>     
> etc.
>   
>
> The wiki I have setup is at http://itbook.wikidot.com/  feel free to
> check it out.  There's not much there yet, but I have high hopes...  :-)
>
>
>
>