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Welcome everybody to week two of our technology for business podcast presented by CIT.

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Today we're sitting down with Todd and Scott and we're talking about businesses and technology goals.

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Why don't you guys introduce yourselves and get us started.

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Sure, I'll go first. I am Todd. I am CIT's Chief Operations Officer. I am also our Chief Information Security Officer.

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Greetings. My name is Scott Patsy and I am the Manager of Strategic Engagement here at CIT.

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Cool. So today we're going to be talking about what does it look like to

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engage or try to help use IT to achieve your business goals is really what we're talking about.

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A lot of organizations have been doing this for years. There's a lot of buzz terms that show up in

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the industry, whether it's business enablement or if you start talking about digital transformation.

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And it sounds great. A lot of times it doesn't really mean a lot to a lot of people, including

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myself who have been in technology for you can probably see a couple years anyway.

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And we've been working at it. I've been in other businesses outside of CIT. I have done the whole

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process of trying to find ways to enable growth for businesses and help IT enable, if you will,

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like I used the term earlier, to achieve goals that were set forth by the organization. So

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we'll start here. And I guess the first thing that we'll kind of start talking about is what

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does that typically look like? Most of the organizations that we tend to work with do not

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have an IT staff in place. Sometimes they do. Sometimes they don't. And so when you're looking

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at the small and medium-sized businesses that are out there, Scott, how do they typically get

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engaged with the ideas that I could potentially be using IT to help me achieve some of the goals

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that I may have as an organization? Yeah, that's a great question, Todd. A lot of it has to do with

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mindset. The basic mindset for a lot of people for the longest time just was that technology was

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this necessary evil. We have to buy all this equipment and applications. Every three to

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five years, we go through this giant Pekin Valley expense model, capital expense model,

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where we're ripping and replacing hardware and infrastructure and applications. And

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now we have to train people on the new stuff. And so unfortunately, technology comes along

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with a negative connotation to that degree. And so understanding kind of a person's a business,

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a group of leaders, understanding their mindset about technology is a large part in where that

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process begins and how you begin to better engage, better align technology with what your business

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goals are. And by that, I mean making sure that the business technology goals that you have

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are supported by technology. And so there's a couple of quotes here or statements that I've

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written down that kind of help verbalize that mindset. And so anybody that I would sit down with

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and start to talk about business and technology alignment, I say these words to them and say,

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listen, this is the mindset, the frame of mind that I want you to have as we kind of go into

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this conversation as we begin an IT strategy exercise, whatever. And those words are this,

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given the growing importance of technology in every business, organizations must have a clear

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IT strategic direction and priorities that are closely linked to the business strategy.

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So that's a quote from former CIO of Paypal, Brad Strock. Another one that I like is an organization

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that achieves business technology alignment will generate the maximum value from its technology

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investments. And then the final one is the best IT plan is no longer simply a rundown of the financial

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investment required or a list of technologies to implement, rather it's an assessment of the changes

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demanded to achieve business goals. Now that last one I think is probably the one that's the most

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connected to the groups of organizations that we work with. Because often their IT plan is exactly

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that it's a list of things that they're going to buy, right? It's not connected directly to their

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executive plans. It's not connected directly to what the business three to five year business

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strategy is, right? And so I'll kind of walk us through that framework, right? Wrapping around

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that context. So hey, for the longest time, everyone's just been, you know, your IT plans,

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the computers you're going to buy, right? And more so driving it towards the last piece of that

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statement, which is an assessment of the changes demanded. You know, if you think about a larger

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organization that would hire a CIO, that person's job, it's the CIO's job to change things, right?

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To change the way that operational IT functions in order to support where the business is going.

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So now that everyone's kind of in the same mindset, right? We understand where we're going. We

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understand what we're talking about. We kind of agree on those three statements, right? In order to

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align the business goals with how technology can support those things, there's some self-assessing

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questions that I like to discuss. And so I'm going to go ahead and talk about the three

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questions that I like to discuss. And some of these can be sensitive, so to speak.

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More so, not because people don't want to answer them necessarily, but they

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provoke enough thought where, you know, oh, maybe we haven't thought of that. And some people don't

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like to admit that they haven't thought of that, right? But either way, these are good

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provoking, thought provoking questions that I kind of like to start, you know, an exercise of the

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process with or down this road to better align technology with business. So how does the IT,

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how does the organization budget for IT expenses, right? And there's kind of a

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good, better, best scenario, right? You know, good, or in some cases, bad,

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is, well, we really don't. It's kind of ad hoc and we buy stuff as needed and there's not really

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a standard that we adhere to. We're just buying things as we need them, right?

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And that provokes a lot of thought because as soon as you say that out loud, well, we really don't

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do that. An organization knows, well, you know, now that I say it out loud, these are things that

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probably should be thinking about, right? The second one is how is technology supporting

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revenue growth and opening new business opportunities for the organization?

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Something that most people that haven't aligned technology and business quite yet,

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something that they don't quite realize is that technology can be a strategic differentiator for

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them in their marketplace. If you can align technology and business, your business can

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ultimately move faster. It can make decisions quicker. Your people are more productive.

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Your people are happier because their technology is working and allowing them to do the perform

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their job function. In today's world, it's allowing them to perform their job function from anywhere,

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right? So it's more than just is the technology working. Is it creating revenue growth?

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Is it opening new business opportunity? A great example of this is for the longest time,

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technology was just in the background. It's that stuff coming away in the closet that every three

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years I got to buy a new one, right? And now we're taking elements of technology and putting them

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out in the front of the business, leading with pieces of technology and providing

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customers with opportunity to do business with us via this technology. A great example of that is

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like the customer portal, right? So lots of organizations have some way that their customer

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can interface with them and do direct B to C business, right? Business to consumer business.

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You can go to a portal and take place an order, right? This is more than just the website. The

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website's out there. Everybody knows that websites are technology. That's different. This is different.

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Or to get updates and order status and information directly out of a customer's ERP system where

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you may have, you know, the business is operating inside of their business systems and updating data

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and updating inventory counts and things like that. You can present pieces of that technology

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out to your customer, right? And so here now we're taking IT from just being this thing,

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coming away in the closet, to something that's adding real value to our customer, right?

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So that's one of those ways that you can take technology and innovate with it and it can better

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align with what the business is trying to accomplish.

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I'm going to go on. I just kind of wanted to challenge some of that a little bit. I think those

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are all great points. However, we hear often for at CIT, we hear our customers come back and say,

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well, we don't do IT. We don't understand IT. You kind of hit the nail on the head, I think,

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from the perception of a lot of those organizations where as far as I know, those guys are back in

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the corner in the dark, they're in the basement, whatever, they're out of sight, out of mind,

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as long as things don't break, that's great. I don't know enough about the capabilities of IT.

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How do I get to a situation where I go, I can look for a portal to do business to consumers selling,

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how do they start to understand what those types of things look like for them? They don't even have

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potentially the concept of, well, I'll actually follow it up with my own question with an example

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to kind of help move the conversation along what I guess I was thinking. But they may not have the

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inkling that there is something that's out there besides just potentially looking at Amazon,

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this or Netflix, did that, but that doesn't apply to me. I'm in the SMB market.

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So the example that I guess I was going to lead with, and I'll let you expand on it, was what if

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an organization had something like I'm looking at potentially, for them, most organizations are

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going to have typical goals, revenue growth, system automations, potentially automating wherever

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things can be. Do I have a data analytics piece? Do I need to be a data-driven organization?

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Do they think like that? How should they be thinking about that? And then what are the next

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steps to kind of go, okay, maybe there is something in IT that I could be leaning on.

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Yeah, that's that. Thanks, Todd, for reeling it back in.

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You know, I think a lot of that comes from the customer, the organization's

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own customer base, right? How is your customer acquiring your business today?

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Right? How are they buying goods from you? And how is that happening across your market?

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Right? It's perfect. It's great to look out into your marketplace and see what

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your competitors are doing, see what other organizations like yours are doing,

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how they're utilizing that type of technology to find those opportunities, right? And identify

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places where you can ultimately provide more value back to your customers somehow.

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You know, it's easy to kind of reel it right back into this, you know, right back into our phones.

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That's where people are doing business today, right? That's where people are finding opportunities

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for business partnerships today. That's where people are learning about your local business

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today, right? Your small business. That's where they're learning about. That's where

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they're finding it, right? And so if it's more than simply the ability to know that you exist

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via your website and your Google search, but actually understand that you can perform commerce here

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in that moment or get information as a customer from your phone because everybody's here all the

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time anyway, is some of that framework, Todd, right? Yeah, okay, well, that sounds great,

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but where does my 25 user organization, where do we find value in all of that, right? How do we

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identify that as an opportunity? How do we identify that piece of alignment between our business

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and technology? And so in part, I think it's understanding where your customer is coming

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to you to find that information. Are you shipping a good? Can you present status to your customer?

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A lot of this now is coming from a different place, right? 10 years ago, when everybody had an ERP

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system on the server in their closet, that scenario was different. Today, many organizations are

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subscribing to some type of a cloud-based service, right? For a lot of these systems that run their

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businesses and integrated within those systems are the opportunity for things like what I've talked

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about, right? It may just be another module. So there's not a bunch of work. It's not, you know,

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you got a higher NIT guy. It's, you know, can your cloud subscription ERP system do this, right?

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Some good points and examples off of that that I'll use just to kind of help put a little more

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context around a few things is Scott mentioned a lot of ERP systems. A lot of times there'll be

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CRM in there. So as you're trying to grow your businesses, a lot of times you go, oh, I'm just

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going to lean on my ERP system and that may be as simple for most organizations as I'm going to

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create an opportunity. I'm going to follow that through the pipeline, et cetera. But you can use

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your ERP and I was getting back to the data analytics piece to start to drive things and processes

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inside your business. I can help segment my net net work saying this customer and you can use whatever

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example makes sense, revenue-wise, or you can say, you know, demographics, this customer looks like

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this, sounds like this, buys like this, and you can start to get that information out of the systems

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you already have, whether that be something that's built into the ERP systems or you're working with

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a trusted partner to find how to get that information back out and slice it and dice it the way you

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want. One other thing that I kind of wanted to throw out there is kind of an example of

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something you could potentially do is we talk a lot about, I see this all the time, right?

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Customers are looking for how do I automate my processes? How do I, I'm not looking to get rid

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of people per se, but I want to make them more efficient and so forth. And a great example of

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something like that would be accounts payable or accounts receivable, more specifically where I was

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going. And what do you do with that? More often than not, most organizations are picking up the

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phone call and they're going, hey, yo, us money, yo, us money, yo, us money. Well, there are tools

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out there, your ERP system that Scott mentioned as an example. They can do automated things. They can

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send dunning lenders that say, hey, this is what you owe, here's how you pay us, so on and so forth.

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And it's a completely automated process. I've now carved that person's time back to do the

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things that are a lot more strategic to my business and get away from those tactical day-to-day things.

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Yeah, no, you're absolutely right. I can make a good point, Todd, in there.

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You know, part of being able to ultimately deliver some of these things is

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subscribing to some modern technology components, right? And so the theme here is how do we align

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business and technology? And if we're trying to take advantage of modern tools, modern ability to

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connect technology elements to provide more value to our customer, part of that is assessing the

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kind of current environment, the current layout. How do you feel, another one of these kind of

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thought-provoking questions, how do you feel you conform to technology standards? Are all the

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desktop computers that you have five to six to seven to eight years old, that might present some

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challenges trying to align technology with what your business goals are? Because if your business

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goals are going in one direction, but your technology is kind of weighing you down in that

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capacity, your people can't be productive because the technology is old, right? That's going to

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slow that alignment. So to think about where you think you fit within those standards is

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another good question. And not everybody knows what those standards are, right? And so working

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with a technology partner to understand kind of where you score, hey, in infrastructure,

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Euro five out of 10 and there's some risk and we can update that, is one way to start to begin

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some of that alignment, right? It starts a lot of times with that foundation, right? Building a

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house, you have to build a good foundation. So if you're going to utilize technology to be a

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differentiator, to help you be a differentiator in your marketplace to help you provide better

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value to your customer, what's that foundation of technology? Is it just, could it use an update?

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Right? An important part of that is what do you and the leaders of the organization,

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what do they think about technology and what is its perception, right? Like I mentioned earlier,

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on, ah, you know, we still have a legacy mindset that we don't really think technology can do that,

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right? That's going to be another thing that will kind of slow that process of alignment, right?

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I was going to throw another thing in there too, as you were talking about some of the standards

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and whatnot, and you were talking about the foundation. One of the things that you were

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talking about kind of resonated with me in the sense that compliance seems to be something that's

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coming up and it's starting to become a more prevalent piece of business. Nate and I talked

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about this last week if you haven't to catch the podcast, but where I was going with it is manufacturers

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in particular have really seen as fairly significant uptick in compliance, and what ended up happening

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for them is if they happen to have any kind of business that's working with the DoD or something

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along those lines, they've now been thrust into this area where they've got to get compliance,

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and Scott was kind of alluding to is, again, it's the, I don't know what I don't know,

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how do I start to get that foundation in place? How do I start to find ways to get that in place,

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and then start to move forward? When it comes to being a differentiator for you and your industry,

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it's certainly possible that the fact that you've got your ducks in a row, you can go to market

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quicker, you go, look, I've got all the documentation, I've got all the foundation in place, let's go,

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I'm ready to end this thing and close the deal. Your competition down the road is still going,

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I don't even know what this thing is that I may have to comply with. And of course, there's all

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kinds of tools that automate the compliance and reporting pieces for organizations as well.

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Right, right. I would add to that by saying the thing that we're starting to see in the

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marketplace is that vendor risk assessment process, right? So your customer is going to

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start to ask you these questions. How is your business aligned with your technology? How are

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you meeting technology standards as an organization? Have you implemented these security standards?

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Have you implemented these technologies to protect my data that you have of mine, right?

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The data that your organization has about me, your customer, and are you protecting your own data?

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Those kind of answering those kind of questions from a vendor risk perspective is less regulatory

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and more again, like your customer coming in saying, we are going to award you more business

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if you can answer these questions in a satisfactory manner, right? If we know you're protecting our

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data, you're protecting your own data, you've got to take a modern approach to technology and

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you're beginning to align technology with your business goals, that's you're going to win

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my business over the next guy that is not. So I love the point and I guess one of the questions

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that I had kind of early on is we're talking about IT, we're talking about spend, we did talk about

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the historical stuff, whether it was CAPEX or as you're starting to see a lot of the world move

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into an operational expense process as well, is what is and how does that tie to an ROI? I think

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you made an excellent point of this is going to drive business for you, which is an instant ROI,

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but as business leaders are going through this, how do they look at it? How do they define it?

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How do they go? All right, I'm thinking about this as starting to click for me, but really,

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how do I pay for it? How do I justify it? Man, I just kind of wanted you to expand on that piece

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a little bit as well. Yeah, and it goes back to kind of one of my first statements, which is

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how does the organization budget for IT expenses, right? I can't tell you or give you advice on how

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you're going to pay for it, unless you can answer me the question, do you have an IT budget? And if

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you do, if you're not isolating those costs within your budgetary process, then that's going to make

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that process very challenging, right? Something that I would look to an industry number that I know

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of, kind of the gold standard is comparing IT budget to revenue, right? And the average

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across industry is 3.64%. And so everybody who's listening to this, their wheels are turning,

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oh boy, okay, well, I'm right on par with it. And that's the average across industry, right? If you

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look at healthcare, if you look at financial, they're 7%. Manufacturing is a little bit less

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than that. So that's a good opportunity to say, how do we align with the rest of businesses

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and organizations with our our IT budget percentage to revenue? That's a good marker to say, if your

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revenue is X, you should be spending about X on technology in order for you to be able to maintain

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modern systems in order for you to begin to align technology with business goals, right? So that's

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a good way to start to answer that question, Todd. Great, great, great question. So I want to kind of

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kind of go back on here. I got two more points that I kind of wanted to make before we were wrapping

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up. But one of the things that I was going to say is you started this out really, really well. In my

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opinion, part of how we go about this is we start with kind of understanding where we are today,

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which is exactly what you just said, right? What is my spend compared to what my revenue is?

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And then the next steps typically for me when I work with organizations is starting to go, okay,

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where do we want to go? Which gets right back to where we started, right? What's the strategy? Where

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are we going as an organization? From there, we can start to build out, well, shoot, this is how

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technology is starting to look like in the future. And it could be anything from really cool stuff

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that Microsoft is working with what they refer to as modern workplace, which gets into all kinds

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of system automations like how do I in auto enroll my employees onto new devices and get

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everything automated. But then the last piece of that is obviously building out that budget. And

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that budget is not a one year thing. That's that typical historical that's all running in the back.

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My people are in the basement. I don't want to talk to you kind of thing to going, let's plan,

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let's see where we're going, how do we continue to build our maturity out as an organization?

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The one last question that I had for you is, like I said early on, a lot of customers don't have

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IT in-house or those that they may have may just be a tech that's just keeping the lights on. What

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do they do in these situations? They don't have the wherewithal to go, still don't understand what

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the capabilities of IT are, don't know how to budget, don't know where to go from here. What

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do those next steps look like? Yeah, yeah, great. That's a great way to kind of wrap this up. I

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think this last my answer to your question, I think we'll wrap, put a nice bow on our podcast here

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today. Let's look at this through the framework first of a larger organization that has a

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significant IT staff, because I think that'll help translate things down. Those organizations,

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they're going to have an IT staff that has a traditional structure. It's going to have a

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it's going to have a chief information officer, it's going to have an IT manager, and then there

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will be multiple kind of roles underneath that. Help desk types of roles, infrastructure management

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types of roles, software development types of roles, but it starts at that CIO. The way that

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those organizations do that is they're giving technology a seat at the table. Technology has

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representation in the leadership meeting to hear and understand from the business where the business

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is going. And then that person is able to interpret those things and understand them through the lens

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of, okay, how can my department, how can technology support the things that the business leadership

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is saying they want to do? Now, organizations that don't have an IT staff of 10 obviously aren't

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doing that, right? So how can an organization have as little or no IT staff accomplish that?

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So the odds are if you've got no IT staff, you're working with somebody, some type of a technology

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partner, and I would recommend that you engage that partner in some of these discussions. It

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doesn't mean you have to invite them to attend your leadership meetings, but connect with that

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person on some regular basis or your team to convey to them, here is what we are planning to do or

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would like to do here. Our goals over the course of the next 12 to 36 months to five years,

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that organization, your IT partner can help provide that, should be able to help provide

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that guidance. Okay, you're telling me you're going to make an acquisition next year. Here are the

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technology things required in order to accomplish that. You're telling me you're an experience,

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an uptick in hiring, you're going to hire 50 people? Great, here are the technology elements

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that are required for that, or we're going to add a location, right? Okay, well here are the

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technology pieces, and the point really there is you're engaging that partner, you're engaging that

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person at the time that leadership sees that spark of the business goal. Because technology,

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you can't come to technology and say we acquired a company six months ago or a month ago, we need

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to help, can we get some computers in here and can you connect? No, technology needs to be well

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on the forefront of that kind of a business decision in order for you to align technology with your

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business goal. Awesome, yeah, the only thing I'd add on to that is obviously when you're working

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with whomever that partner is, you're going to kind of try to be looking for those that really

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understand you and the challenges ahead of you. So my only advice is making sure that when you're

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talking to them, they do kind of understand where are you today, where are you going? Now,

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if you have been working with that partner, hopefully they're already well on that path with

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you, but they're certainly more than likely willing to get on board and go, great, this looks exciting,

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we can grow together, this is really where we want to partner with you moving forward.

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So that's about the only thing that I kind of wanted to cover as we were wrapping up,

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but I really appreciate the input and the insights that you had, Scott.

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Yeah, no, this is great. I would say the last thing I would say is that most modern technology

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partner, the managed services partner world today, most of them should have some type of what we

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call virtual CIO offering, something of that nature that provides that connection that allows them

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to participate in some of those business conversations. Awesome. Thank you, Scott. Thank you, Todd.

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All of that was amazing. Even from my perspective, I've even just using technology. I'm like, yes,

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100% understand it. So thank you guys for taking the time today and for everybody listening.

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You know, these guys love to chat. So if you want to get directly connected with them,

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they will chat with you anytime. Feel free to shoot us an email at info at cIT-net.com or visit

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us online at www.cIT-net.com or also we'll be back next week for yet another technology and business

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podcast. Thanks guys. Thanks, Kelsey.