Welcome everybody to week two of our technology for business podcast presented by CIT.
Today we're sitting down with Todd and Scott and we're talking about businesses and technology goals.
Why don't you guys introduce yourselves and get us started.
Sure, I'll go first. I am Todd. I am CIT's Chief Operations Officer. I am also our Chief Information Security Officer.
Greetings. My name is Scott Patsy and I am the Manager of Strategic Engagement here at CIT.
Cool. So today we're going to be talking about what does it look like to
engage or try to help use IT to achieve your business goals is really what we're talking about.
A lot of organizations have been doing this for years. There's a lot of buzz terms that show up in
the industry, whether it's business enablement or if you start talking about digital transformation.
And it sounds great. A lot of times it doesn't really mean a lot to a lot of people, including
myself who have been in technology for you can probably see a couple years anyway.
And we've been working at it. I've been in other businesses outside of CIT. I have done the whole
process of trying to find ways to enable growth for businesses and help IT enable, if you will,
like I used the term earlier, to achieve goals that were set forth by the organization. So
we'll start here. And I guess the first thing that we'll kind of start talking about is what
does that typically look like? Most of the organizations that we tend to work with do not
have an IT staff in place. Sometimes they do. Sometimes they don't. And so when you're looking
at the small and medium-sized businesses that are out there, Scott, how do they typically get
engaged with the ideas that I could potentially be using IT to help me achieve some of the goals
that I may have as an organization? Yeah, that's a great question, Todd. A lot of it has to do with
mindset. The basic mindset for a lot of people for the longest time just was that technology was
this necessary evil. We have to buy all this equipment and applications. Every three to
five years, we go through this giant Pekin Valley expense model, capital expense model,
where we're ripping and replacing hardware and infrastructure and applications. And
now we have to train people on the new stuff. And so unfortunately, technology comes along
with a negative connotation to that degree. And so understanding kind of a person's a business,
a group of leaders, understanding their mindset about technology is a large part in where that
process begins and how you begin to better engage, better align technology with what your business
goals are. And by that, I mean making sure that the business technology goals that you have
are supported by technology. And so there's a couple of quotes here or statements that I've
written down that kind of help verbalize that mindset. And so anybody that I would sit down with
and start to talk about business and technology alignment, I say these words to them and say,
listen, this is the mindset, the frame of mind that I want you to have as we kind of go into
this conversation as we begin an IT strategy exercise, whatever. And those words are this,
given the growing importance of technology in every business, organizations must have a clear
IT strategic direction and priorities that are closely linked to the business strategy.
So that's a quote from former CIO of Paypal, Brad Strock. Another one that I like is an organization
that achieves business technology alignment will generate the maximum value from its technology
investments. And then the final one is the best IT plan is no longer simply a rundown of the financial
investment required or a list of technologies to implement, rather it's an assessment of the changes
demanded to achieve business goals. Now that last one I think is probably the one that's the most
connected to the groups of organizations that we work with. Because often their IT plan is exactly
that it's a list of things that they're going to buy, right? It's not connected directly to their
executive plans. It's not connected directly to what the business three to five year business
strategy is, right? And so I'll kind of walk us through that framework, right? Wrapping around
that context. So hey, for the longest time, everyone's just been, you know, your IT plans,
the computers you're going to buy, right? And more so driving it towards the last piece of that
statement, which is an assessment of the changes demanded. You know, if you think about a larger
organization that would hire a CIO, that person's job, it's the CIO's job to change things, right?
To change the way that operational IT functions in order to support where the business is going.
So now that everyone's kind of in the same mindset, right? We understand where we're going. We
understand what we're talking about. We kind of agree on those three statements, right? In order to
align the business goals with how technology can support those things, there's some self-assessing
questions that I like to discuss. And so I'm going to go ahead and talk about the three
questions that I like to discuss. And some of these can be sensitive, so to speak.
More so, not because people don't want to answer them necessarily, but they
provoke enough thought where, you know, oh, maybe we haven't thought of that. And some people don't
like to admit that they haven't thought of that, right? But either way, these are good
provoking, thought provoking questions that I kind of like to start, you know, an exercise of the
process with or down this road to better align technology with business. So how does the IT,
how does the organization budget for IT expenses, right? And there's kind of a
good, better, best scenario, right? You know, good, or in some cases, bad,
is, well, we really don't. It's kind of ad hoc and we buy stuff as needed and there's not really
a standard that we adhere to. We're just buying things as we need them, right?
And that provokes a lot of thought because as soon as you say that out loud, well, we really don't
do that. An organization knows, well, you know, now that I say it out loud, these are things that
probably should be thinking about, right? The second one is how is technology supporting
revenue growth and opening new business opportunities for the organization?
Something that most people that haven't aligned technology and business quite yet,
something that they don't quite realize is that technology can be a strategic differentiator for
them in their marketplace. If you can align technology and business, your business can
ultimately move faster. It can make decisions quicker. Your people are more productive.
Your people are happier because their technology is working and allowing them to do the perform
their job function. In today's world, it's allowing them to perform their job function from anywhere,
right? So it's more than just is the technology working. Is it creating revenue growth?
Is it opening new business opportunity? A great example of this is for the longest time,
technology was just in the background. It's that stuff coming away in the closet that every three
years I got to buy a new one, right? And now we're taking elements of technology and putting them
out in the front of the business, leading with pieces of technology and providing
customers with opportunity to do business with us via this technology. A great example of that is
like the customer portal, right? So lots of organizations have some way that their customer
can interface with them and do direct B to C business, right? Business to consumer business.
You can go to a portal and take place an order, right? This is more than just the website. The
website's out there. Everybody knows that websites are technology. That's different. This is different.
Or to get updates and order status and information directly out of a customer's ERP system where
you may have, you know, the business is operating inside of their business systems and updating data
and updating inventory counts and things like that. You can present pieces of that technology
out to your customer, right? And so here now we're taking IT from just being this thing,
coming away in the closet, to something that's adding real value to our customer, right?
So that's one of those ways that you can take technology and innovate with it and it can better
align with what the business is trying to accomplish.
I'm going to go on. I just kind of wanted to challenge some of that a little bit. I think those
are all great points. However, we hear often for at CIT, we hear our customers come back and say,
well, we don't do IT. We don't understand IT. You kind of hit the nail on the head, I think,
from the perception of a lot of those organizations where as far as I know, those guys are back in
the corner in the dark, they're in the basement, whatever, they're out of sight, out of mind,
as long as things don't break, that's great. I don't know enough about the capabilities of IT.
How do I get to a situation where I go, I can look for a portal to do business to consumers selling,
how do they start to understand what those types of things look like for them? They don't even have
potentially the concept of, well, I'll actually follow it up with my own question with an example
to kind of help move the conversation along what I guess I was thinking. But they may not have the
inkling that there is something that's out there besides just potentially looking at Amazon,
this or Netflix, did that, but that doesn't apply to me. I'm in the SMB market.
So the example that I guess I was going to lead with, and I'll let you expand on it, was what if
an organization had something like I'm looking at potentially, for them, most organizations are
going to have typical goals, revenue growth, system automations, potentially automating wherever
things can be. Do I have a data analytics piece? Do I need to be a data-driven organization?
Do they think like that? How should they be thinking about that? And then what are the next
steps to kind of go, okay, maybe there is something in IT that I could be leaning on.
Yeah, that's that. Thanks, Todd, for reeling it back in.
You know, I think a lot of that comes from the customer, the organization's
own customer base, right? How is your customer acquiring your business today?
Right? How are they buying goods from you? And how is that happening across your market?
Right? It's perfect. It's great to look out into your marketplace and see what
your competitors are doing, see what other organizations like yours are doing,
how they're utilizing that type of technology to find those opportunities, right? And identify
places where you can ultimately provide more value back to your customers somehow.
You know, it's easy to kind of reel it right back into this, you know, right back into our phones.
That's where people are doing business today, right? That's where people are finding opportunities
for business partnerships today. That's where people are learning about your local business
today, right? Your small business. That's where they're learning about. That's where
they're finding it, right? And so if it's more than simply the ability to know that you exist
via your website and your Google search, but actually understand that you can perform commerce here
in that moment or get information as a customer from your phone because everybody's here all the
time anyway, is some of that framework, Todd, right? Yeah, okay, well, that sounds great,
but where does my 25 user organization, where do we find value in all of that, right? How do we
identify that as an opportunity? How do we identify that piece of alignment between our business
and technology? And so in part, I think it's understanding where your customer is coming
to you to find that information. Are you shipping a good? Can you present status to your customer?
A lot of this now is coming from a different place, right? 10 years ago, when everybody had an ERP
system on the server in their closet, that scenario was different. Today, many organizations are
subscribing to some type of a cloud-based service, right? For a lot of these systems that run their
businesses and integrated within those systems are the opportunity for things like what I've talked
about, right? It may just be another module. So there's not a bunch of work. It's not, you know,
you got a higher NIT guy. It's, you know, can your cloud subscription ERP system do this, right?
Some good points and examples off of that that I'll use just to kind of help put a little more
context around a few things is Scott mentioned a lot of ERP systems. A lot of times there'll be
CRM in there. So as you're trying to grow your businesses, a lot of times you go, oh, I'm just
going to lean on my ERP system and that may be as simple for most organizations as I'm going to
create an opportunity. I'm going to follow that through the pipeline, et cetera. But you can use
your ERP and I was getting back to the data analytics piece to start to drive things and processes
inside your business. I can help segment my net net work saying this customer and you can use whatever
example makes sense, revenue-wise, or you can say, you know, demographics, this customer looks like
this, sounds like this, buys like this, and you can start to get that information out of the systems
you already have, whether that be something that's built into the ERP systems or you're working with
a trusted partner to find how to get that information back out and slice it and dice it the way you
want. One other thing that I kind of wanted to throw out there is kind of an example of
something you could potentially do is we talk a lot about, I see this all the time, right?
Customers are looking for how do I automate my processes? How do I, I'm not looking to get rid
of people per se, but I want to make them more efficient and so forth. And a great example of
something like that would be accounts payable or accounts receivable, more specifically where I was
going. And what do you do with that? More often than not, most organizations are picking up the
phone call and they're going, hey, yo, us money, yo, us money, yo, us money. Well, there are tools
out there, your ERP system that Scott mentioned as an example. They can do automated things. They can
send dunning lenders that say, hey, this is what you owe, here's how you pay us, so on and so forth.
And it's a completely automated process. I've now carved that person's time back to do the
things that are a lot more strategic to my business and get away from those tactical day-to-day things.
Yeah, no, you're absolutely right. I can make a good point, Todd, in there.
You know, part of being able to ultimately deliver some of these things is
subscribing to some modern technology components, right? And so the theme here is how do we align
business and technology? And if we're trying to take advantage of modern tools, modern ability to
connect technology elements to provide more value to our customer, part of that is assessing the
kind of current environment, the current layout. How do you feel, another one of these kind of
thought-provoking questions, how do you feel you conform to technology standards? Are all the
desktop computers that you have five to six to seven to eight years old, that might present some
challenges trying to align technology with what your business goals are? Because if your business
goals are going in one direction, but your technology is kind of weighing you down in that
capacity, your people can't be productive because the technology is old, right? That's going to
slow that alignment. So to think about where you think you fit within those standards is
another good question. And not everybody knows what those standards are, right? And so working
with a technology partner to understand kind of where you score, hey, in infrastructure,
Euro five out of 10 and there's some risk and we can update that, is one way to start to begin
some of that alignment, right? It starts a lot of times with that foundation, right? Building a
house, you have to build a good foundation. So if you're going to utilize technology to be a
differentiator, to help you be a differentiator in your marketplace to help you provide better
value to your customer, what's that foundation of technology? Is it just, could it use an update?
Right? An important part of that is what do you and the leaders of the organization,
what do they think about technology and what is its perception, right? Like I mentioned earlier,
on, ah, you know, we still have a legacy mindset that we don't really think technology can do that,
right? That's going to be another thing that will kind of slow that process of alignment, right?
I was going to throw another thing in there too, as you were talking about some of the standards
and whatnot, and you were talking about the foundation. One of the things that you were
talking about kind of resonated with me in the sense that compliance seems to be something that's
coming up and it's starting to become a more prevalent piece of business. Nate and I talked
about this last week if you haven't to catch the podcast, but where I was going with it is manufacturers
in particular have really seen as fairly significant uptick in compliance, and what ended up happening
for them is if they happen to have any kind of business that's working with the DoD or something
along those lines, they've now been thrust into this area where they've got to get compliance,
and Scott was kind of alluding to is, again, it's the, I don't know what I don't know,
how do I start to get that foundation in place? How do I start to find ways to get that in place,
and then start to move forward? When it comes to being a differentiator for you and your industry,
it's certainly possible that the fact that you've got your ducks in a row, you can go to market
quicker, you go, look, I've got all the documentation, I've got all the foundation in place, let's go,
I'm ready to end this thing and close the deal. Your competition down the road is still going,
I don't even know what this thing is that I may have to comply with. And of course, there's all
kinds of tools that automate the compliance and reporting pieces for organizations as well.
Right, right. I would add to that by saying the thing that we're starting to see in the
marketplace is that vendor risk assessment process, right? So your customer is going to
start to ask you these questions. How is your business aligned with your technology? How are
you meeting technology standards as an organization? Have you implemented these security standards?
Have you implemented these technologies to protect my data that you have of mine, right?
The data that your organization has about me, your customer, and are you protecting your own data?
Those kind of answering those kind of questions from a vendor risk perspective is less regulatory
and more again, like your customer coming in saying, we are going to award you more business
if you can answer these questions in a satisfactory manner, right? If we know you're protecting our
data, you're protecting your own data, you've got to take a modern approach to technology and
you're beginning to align technology with your business goals, that's you're going to win
my business over the next guy that is not. So I love the point and I guess one of the questions
that I had kind of early on is we're talking about IT, we're talking about spend, we did talk about
the historical stuff, whether it was CAPEX or as you're starting to see a lot of the world move
into an operational expense process as well, is what is and how does that tie to an ROI? I think
you made an excellent point of this is going to drive business for you, which is an instant ROI,
but as business leaders are going through this, how do they look at it? How do they define it?
How do they go? All right, I'm thinking about this as starting to click for me, but really,
how do I pay for it? How do I justify it? Man, I just kind of wanted you to expand on that piece
a little bit as well. Yeah, and it goes back to kind of one of my first statements, which is
how does the organization budget for IT expenses, right? I can't tell you or give you advice on how
you're going to pay for it, unless you can answer me the question, do you have an IT budget? And if
you do, if you're not isolating those costs within your budgetary process, then that's going to make
that process very challenging, right? Something that I would look to an industry number that I know
of, kind of the gold standard is comparing IT budget to revenue, right? And the average
across industry is 3.64%. And so everybody who's listening to this, their wheels are turning,
oh boy, okay, well, I'm right on par with it. And that's the average across industry, right? If you
look at healthcare, if you look at financial, they're 7%. Manufacturing is a little bit less
than that. So that's a good opportunity to say, how do we align with the rest of businesses
and organizations with our our IT budget percentage to revenue? That's a good marker to say, if your
revenue is X, you should be spending about X on technology in order for you to be able to maintain
modern systems in order for you to begin to align technology with business goals, right? So that's
a good way to start to answer that question, Todd. Great, great, great question. So I want to kind of
kind of go back on here. I got two more points that I kind of wanted to make before we were wrapping
up. But one of the things that I was going to say is you started this out really, really well. In my
opinion, part of how we go about this is we start with kind of understanding where we are today,
which is exactly what you just said, right? What is my spend compared to what my revenue is?
And then the next steps typically for me when I work with organizations is starting to go, okay,
where do we want to go? Which gets right back to where we started, right? What's the strategy? Where
are we going as an organization? From there, we can start to build out, well, shoot, this is how
technology is starting to look like in the future. And it could be anything from really cool stuff
that Microsoft is working with what they refer to as modern workplace, which gets into all kinds
of system automations like how do I in auto enroll my employees onto new devices and get
everything automated. But then the last piece of that is obviously building out that budget. And
that budget is not a one year thing. That's that typical historical that's all running in the back.
My people are in the basement. I don't want to talk to you kind of thing to going, let's plan,
let's see where we're going, how do we continue to build our maturity out as an organization?
The one last question that I had for you is, like I said early on, a lot of customers don't have
IT in-house or those that they may have may just be a tech that's just keeping the lights on. What
do they do in these situations? They don't have the wherewithal to go, still don't understand what
the capabilities of IT are, don't know how to budget, don't know where to go from here. What
do those next steps look like? Yeah, yeah, great. That's a great way to kind of wrap this up. I
think this last my answer to your question, I think we'll wrap, put a nice bow on our podcast here
today. Let's look at this through the framework first of a larger organization that has a
significant IT staff, because I think that'll help translate things down. Those organizations,
they're going to have an IT staff that has a traditional structure. It's going to have a
it's going to have a chief information officer, it's going to have an IT manager, and then there
will be multiple kind of roles underneath that. Help desk types of roles, infrastructure management
types of roles, software development types of roles, but it starts at that CIO. The way that
those organizations do that is they're giving technology a seat at the table. Technology has
representation in the leadership meeting to hear and understand from the business where the business
is going. And then that person is able to interpret those things and understand them through the lens
of, okay, how can my department, how can technology support the things that the business leadership
is saying they want to do? Now, organizations that don't have an IT staff of 10 obviously aren't
doing that, right? So how can an organization have as little or no IT staff accomplish that?
So the odds are if you've got no IT staff, you're working with somebody, some type of a technology
partner, and I would recommend that you engage that partner in some of these discussions. It
doesn't mean you have to invite them to attend your leadership meetings, but connect with that
person on some regular basis or your team to convey to them, here is what we are planning to do or
would like to do here. Our goals over the course of the next 12 to 36 months to five years,
that organization, your IT partner can help provide that, should be able to help provide
that guidance. Okay, you're telling me you're going to make an acquisition next year. Here are the
technology things required in order to accomplish that. You're telling me you're an experience,
an uptick in hiring, you're going to hire 50 people? Great, here are the technology elements
that are required for that, or we're going to add a location, right? Okay, well here are the
technology pieces, and the point really there is you're engaging that partner, you're engaging that
person at the time that leadership sees that spark of the business goal. Because technology,
you can't come to technology and say we acquired a company six months ago or a month ago, we need
to help, can we get some computers in here and can you connect? No, technology needs to be well
on the forefront of that kind of a business decision in order for you to align technology with your
business goal. Awesome, yeah, the only thing I'd add on to that is obviously when you're working
with whomever that partner is, you're going to kind of try to be looking for those that really
understand you and the challenges ahead of you. So my only advice is making sure that when you're
talking to them, they do kind of understand where are you today, where are you going? Now,
if you have been working with that partner, hopefully they're already well on that path with
you, but they're certainly more than likely willing to get on board and go, great, this looks exciting,
we can grow together, this is really where we want to partner with you moving forward.
So that's about the only thing that I kind of wanted to cover as we were wrapping up,
but I really appreciate the input and the insights that you had, Scott.
Yeah, no, this is great. I would say the last thing I would say is that most modern technology
partner, the managed services partner world today, most of them should have some type of what we
call virtual CIO offering, something of that nature that provides that connection that allows them
to participate in some of those business conversations. Awesome. Thank you, Scott. Thank you, Todd.
All of that was amazing. Even from my perspective, I've even just using technology. I'm like, yes,
100% understand it. So thank you guys for taking the time today and for everybody listening.
You know, these guys love to chat. So if you want to get directly connected with them,
they will chat with you anytime. Feel free to shoot us an email at info at cIT-net.com or visit
us online at www.cIT-net.com or also we'll be back next week for yet another technology and business
podcast. Thanks guys. Thanks, Kelsey.