6 Critical IT Operation Mistakes A CXO Should Avoid

A CFO friend of mine, Robert, just told me that he lost two senior IT managers to their largest competitor two weeks ago. The story was no different than the ones we hear from many CXOs struggling to retain highly-qualified techs. It’s a trend many human resource people know all too well. After listening to Robert describe his manpower dilemma, here’s what I’d like to advise for CXOs-alike to consider for IT staffing and operation.

Ignoring Lurking IT Recruiters

Every CXO understands the pressure of maintaining qualified technicians to manage their networks. But one of the biggest mistakes I see all too often is companies under-estimating the global demand for seasoned techs.

With aggressive head hunters actively recruiting IT contractors to help companies of all sizes fill their job positions, even your most senior techs are one offer away from giving their notice.

I recommend you invest in creating an outsourcing back up plan. It’s far easier than you think. Many of our clients have begun migrating some of their infrastructure to third party providers to protect their networks. Don’t forget your biggest asset is people. If your senior IT managers are whisked away by better pay and benefits, you’ll no doubt suffer months trying to vet qualified replacements.

Giving Your IT Department A Mulligan

I know what you’re thinking. How can you hold your IT staffers accountable for network problems if you’re not well-versed in how technology drives your business?

Essentially, ignoring the capital you invest in your technology is no different than writing a blank check. Too many technicians consider themselves exempt from cost controls and financial accountability.

Instead, I recommend meeting with your IT department managers. Ask them to develop quarterly capital expenditure projections. Next, track their progress every week. Are there vendors they can shop for hardware and software offering better discounts? You need to stop paying full retail every time your IT gurus advise you to invest in upgrades.

Buying Technology

Smart CXOs are beginning to understand how technology is no longer considered an asset.

In Robert’s case, they were investing more than $25,000 per month in technology upgrades that became obsolete within one year. Many companies experience similar issues as most hardware and softwares have a shelf life of 18 months. Although some organizations invest in Apple OS products which offer better operating value (3-5 years), they commonly do not employ Apple-qualified technicians.

I advise my clients to consider leasing technology rather than owning it. Yes, you’ll probably invest more money long-term. However, you’ll benefit with far fewer tech problems. For instance, instead of investing in a web server (hardware and software), securing it, creating regular backups on another server, etc, choosing a web hosting service will provide a cost-effective and more secure solution.

Isolating Your Accountants and IT Departments

Years ago my partners and I had an idea. What if we schedule monthly meetings with our accounting department and IT team? Our goal was develop an open line of communication between them to develop strict technology cost controls.

Next, we formulated a negotiation protocol to leverage lower IT costs from our vendors. It takes time. However, I promise you it can help you cut expenses.

Ignoring Cloud-Based Opportunities

Does your company have an IT plan written in stone? If so, consider trashing it. Too many CXOs stick with one game plan how they manage their technology resources. Big mistake.

For example, converting your user-based demands to a Cloud system will free up resources. It’s ideal for companies with more than 10 employees running multiple softwares.

Banking Outages Won’t Happen

Last June, suffered a one week outage crippling their business. An external denial-of-service (DDoS) hack rendered their systems useless. One day after discovering the problem, hackers causing the security breech tried extorting money from executives to restore their systems. Read the full story.

Put an outage recovery plan on paper. Meet with your IT managers and core executives to discuss a restoration plan. It’s not if it will happen but when.

Public, Private and Hybrid Clouds: The Difference (and when it matters)

A decision maker at an SMB is trying to keep things simple (or at least no more complicated than they have to be). Saving money for outsourced services gets everyone’s attention, and the promise of Cloud Computing undoubtedly gets yours. While most of the technical details are delegated to your hard working CIO, Directors, and foot soldiers, there are some concepts it’s good to have an overview of – because of their effect on your data security and your bottom line.There are three categories of Cloud Computing Environments you’ll hear your IT staff talking about – a Public Cloud, a Private Cloud or a Hybrid Cloud. The differences between the three involve the capital investment of each, and the data security level provided by each.

The Public Cloud

According to TechTarget, A public cloud is “one based on the standard cloud computing model, in which a service provider makes resources, such as applications and storage, available to the general public over the Internet”. In the Public Cloud, all the infrastructure and maintenance are provided off site. This is the ideal choice for most SMBs.

Advantages:  A Public Cloud:

  • Takes all of the overhead of IT operations off of your shoulders.
  • Simplifies accounting in that you pay fees instead of overhead and effort involved in Capital Expenditures.
  • Increased demand is simply a matter of purchasing more bandwidth and/or services. For example, If you need more capacity during the Christmas buying season, you can purchase more capacity during the season (as opposed to purchasing equipment and systems that must have capacity that is not needed for a majority of the year).

Disadvantage:  You are using shared resources with other organizations, which makes a Public Cloud less secure than a Private Cloud.  However, It is important to note that the resources of a Cloud Vendor are far greater than a typical SMB, and that the environment of your Cloud Vendor is still more secure than an environment in the traditional IT space

In short, a Public Cloud is ideal when:

  • a standalone IT Operation represents major overhead to your business,
  • You use standard applications (Such as Microsoft Office),
  • You use Cloud applications by major vendors (such as Adobe Creative Cloud or SalesForce), or:
  • You do a lot of collaborative projects over a disbursed area.

Private Clouds

A Private Cloud is one where a Cloud Infrastructure is used by a single organization. It provides the most security, but requires that the organization have the resources to maintain the environment (and typically an SMB is turning to the Cloud to avoid that overhead!). Recently, Public Cloud Vendors have started offering Private Cloud Services at a premium– i.e., Cloud Environments which are segregated from their public services.

Because of the extra overhead and/or premium costs, Private Clouds are only desirable if you are in an industry with stringent security or data privacy demands, or your business is by nature financial data, intellectual property, or being a custodian of either. Consider leasing Private Cloud Services from your vendor if you have a genuine need for top level security, but don’t have the resources to support it in house.

Hybrid Clouds

A Hybrid Cloud is one that, as the name implies, have elements of a Public Cloud. For example, you have Financial Data you want to maintain in a Private Cloud, but also have collaborative efforts for which you want to use a Public Cloud. Large corporations with vertical markets are potential candidates for a hybrid cloud; a typical SMB would not have a need or have the resources to support one.

All businesses have unique needs, and you know your business better than anyone. The right Cloud Service Provider works with you to find the best solution for your unique situation.