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Beware of Self-Inflicted Complexity |
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| September 18th, 2024 by Vincent Hagedoorn | If there is one topic in my conversations with multinationals we all agree on, it’s the complexity of the IT domain. The general point of view: IT is harder to understand and manage both technically and financially. | |
| Security vulnerabilities, software updates, build and change requests, regulations, just to name a few. There are many internal and external factors that can affect your IT business and may create opportunities or risks for your organization. Finding out which ones to endorse or which ones to block, and making sure money is well spent is not an easy task. | |
| We find that even more complexity is introduced if available resources are not focused to meet strategic objectives. Multiple versions, same functionality, legacy systems, exceptions, and bespoke solutions usually all exist because of this. The footprint of such risks and growth blockers quickly amounts to 30% to 40% of the total IT costs. | |
| To get rid of this complexity by own doing or Self-Inflicted Complexity as I call it, we advise to implement a demand management process that aligns IT investments to corporate strategy. Challenging the upkeep of bespoke solutions if you desire to operate at low costs, and matching demand and supply with agreement on integral costs are some examples where such a process will reduce, rather than introduce complexity. | |
| Want to know more? | Contact us! |
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Is your finance department able to keep up with IT? |
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| June 11th, 2022 | Value Tech Everyday. It's in the name. We help our clients get the best value from technology whilst closing the gap between finance and IT. | |
Is there a culture clash between IT and Finance? |
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| Clever what ICT is doing these days. Continuous delivery, automated testing and continuous improvements. Every single day! But what about the rest of the organization? Annual budgets, fixed chargebacks, silos, bureaucracy and via the cost categories trying to understand why and how costs move in IT. Not surprisingly, there is a great need for IT controllers. | |
Taylorian model |
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| Alongside ICT, the other business units seem to be stuck in the 100+ year old Taylorian model (rake and silos), remaining focused on control without a value perspective. Product owners who organize around value from ICT therefore continue to face existing procurement systems with authorization schemes and responsibilities designed to make a 19th century factory efficient. Strange isn't it? | |
A great way to close the gap! |
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| We give fun in-house trainings to boards, MT's and budget holders in which we discuss this force field and expose the core problems. Super cool training with innovative insights! | |
| Interested? | Contact us! |
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| February 3rd, 2022 | Value Tech Everyday. It's in the name. We help our clients get the best value from technology. A proper tracking of IT assets really helps to explain the added value and costs. That's why we closely follow the news around IT Asset Management (ITAM) and affiliate with good ITAM initiatives such as the Dutch Association of IT Asset Managers. | |
Dutch Association of IT Asset Managers |
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| The objective of the Dutch Association of IT Asset Managers (ITAM NL) is to work together with all stakeholders to further professionalize IT Asset Management in the Netherlands. In order to elaborate on this objective, the association promotes the exchange of knowledge among its members, with the aim of increasing knowledge, market transparency and a better connection between supply and demand. The association is independent and strives for optimal interaction between all stakeholders. | |
| The Dutch Association of IT Asset Managers regularly publishes a member newsletter of which you can find a sneak preview below. If you are interested in ITAM NL membership, just follow this link! | |
ITAM NL Newsletter |
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Foreword by the Chairman |
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| Hennie de Hoog (Chairman Dutch Association of IT Asset Managers) looks back at 2021, the start of ITAM NL, the importance of having sponsors like USU and Flexera and the need to share knowledge and information. | |
Flexera on "2021 State of the Cloud" |
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| The Cloud is not a miracle cure that automatically solves all problems. Given the speed at which companies are currently on the road to digital transformation, it becomes important to continuously check its added value. We need practical solutions to optimize IT spending. | |
Brandon Smeets (Lead ICS User Services at Canon): "Four ways to describe ITAM" |
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USU & Value Tech Everyday: Building a bridge between IT and Finance |
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| Look at your organization's IT systems as if it were a factory. IT is getting to the core of every business and its impact on continuity and costs is vital. A decision on an IT investment requires information on the quantity and quality of the IT environment. This information is often already present in the IT asset administration, but has not been used for financial assessment. Assets are just as important for IT financial management as they are important for IT service delivery. | |
| Need more information? | Contact us! |
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| December 24th, 2021 | For a successful financial year-end closure it’s good to consider some IT specific items. Last week we already offered our first blog with tips and considerations that will help you to be compliant to your accounting framework. Today we continue! | |
Closing the financial books of your IT department |
Part 2 |
Last minute hardware purchasesCheck if any last minute hardware purchases trigger additional software contracts that are based on hardware metrics. |
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CyberattacksIn case you were recently hit by a ransomware or other cyberattack, check if you have all accruals in place to cover for the damage done. |
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Asset ValuationCheck for unused or idle IT capacity that you might need to (partially) impair. |
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Vendor CommitmentsCheck your mid/long term commitments to vendors and see if your spend is on track. If this is not the case, you might need to impair. |
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Split ContractsSome investments contain both hardware and software. Be sure to split them accordingly towards the company financial statements. |
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Happy holidays!This is the second post with some of our most valued tips for year-end closing. We posted our first one last week! Please keep in mind that year-end checks are less cumbersome if you perform them regularly throughout the year! We suggest using our Connect Business Value and Optimise Investments services. You will be more precise and have less surprise at the end of the year, saving you precious time in the process. And let’s be honest, who would argue with that during the festive season? |
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| December 17th, 2021 | For a successful financial year-end closure it’s good to consider some IT specific items. Value Tech Everyday offers top tips and considerations that will help you to be compliant to your accounting framework. | |
Closing the financial books of your IT department |
Part 1 |
Optimize your EBITDAThe board and shareholders will be delighted if you bring them an opportunity to improve your companies EBITDA. Check your cloud invoices. Most of them will have to be booked as Opex, but check if the contract contain Capex elements. If so, you'll have to book them as Capex.This creates a Win-Win: You'll be compliant to IFRS and improve your EBITDA in one go. If you need support, just contact us. |
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Check Software PortalsCheck the software portals you have with your suppliers. You might find used licenses that aren’t reflected in the accruals yet. You might also be surprised by the number of portals available in your organization that can trigger financial impact. It’s good to list and manage them periodically. |
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Free LicensesAnticipate to licenses that are currently free of charge but at some point are priced by the vendor. A Google Vault license was such an example we experienced last year. |
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SaaS LicensesMany companies have a relaxed attitude towards SaaS licenses, because you're never under-licensed. Still, that doesn't make the opposite also true: We encounter companies that have more SaaS licenses than they really use and also companies with too expensive licenses (higher license tier than required). |
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AccrualsCheck if you have more deployments of software than you have contracted. Record them as accruals. |
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FX RiskCheck any FX risks on IT contracts that are denominated in a currency other than the domestic currency of your company. |
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| This is the first post with some of our most valued tips for year-end closing. We will post another one next week! | |
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| Efficient and effective IT Financial Management is a challenge, even for the most experienced CIOs. Finding the right tool for managing your IT budget is just the first of many steps on the way to increased transparency, stakeholder acceptance and greater benefit. Ensuring the success of an ITFM venture requires more steps. The Gartner study “7 Steps that Drive IT Financial Management Tool Success” gives you valuable insights into how your company can achieve the best results with your ITFM tool. | |
| Value Tech Everyday delivers IT Finance expertise to help you do more IT within a smaller budget! Many businesses are faced with the challenge of doing more with a reduced IT budget. Value Tech Everyday offers a suite of services for finance and IT management to support them in getting the job done. | |
We support our clients in taking the right steps:
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Steps to IT Financial Management |
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| USU is a leading European provider of software and services for IT and customer service management and offers an ITFM solution based on IT Services as defined in the ITIL framework. If you are interested in the Gartner study “7 Steps to IT Financial Management tool success”, you can download it from the USU website following this link. |
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| Interested in Value Tech Everyday's proposition? |
Interested in the Gartner report? |
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Need to get more out of IT for less? |
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| October 1, 2021 | 60% of businesses expect IT budgets to shrink or stay the same over the next 12 months. In many companies, the IT budget can’t keep up with the growing need while at the same time it’s unclear if the money is well spent. Value Tech Everyday helps you get the best value for your IT budget! SME or corporate? Talk to us and learn how to get the most from your IT budget. |
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IT spend will grow to 3700 Billion next year |
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| September 28, 2021 | IT financial transparency is more than understanding where you spend your Euros in IT. Equally important is to understand how your IT investments are serving your business strategy. In case growth is the goal, be sure to invest in scalable IT. In case your company wants to operate at the lowest possible costs, be sure to stay away from bleeding edge technology and don't deploy multiple instances of the same functionality. Question is how to align this on a daily basis? We can support you with simple, effective and easy implementable solutions. Interested? Leave a message here. |
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Improve your EBITDA with € 1M+ |
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| September 3, 2021 | Improve your EBITDA with the professional support of Vincent Hagedoorn and Dick Kleijn. Let us check your IT contracts and we will improve your EBITDA with at least € 1M. Interested? Leave your contact details here. |
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