The Cost of Status Quo

CIOs and technology leaders have a real balancing act to deliver value to the organization while at the same time being good fiscal stewards.  This is made doubly tough if executive leadership still views IT as more of a cost of doing business rather than a strategic enabler to achieve corporate objectives.

Several years ago, I saw a CIO do a talk called “Resource-Bound IT”.  I wish I could remember who he was to give him his just due.  Resource-bound IT is a reality at many companies.   Business demands outstrip their internal IT team’s capacity to deliver.  This leads to frustration at all levels if they don’t have other means to meet the demand.

This is exacerbated when there isn’t a good way to decide where those technology investments should occur. “The squeaky wheel gets the grease” has been around since I first entered the technology world over 35 years ago (yikes!).   No company has infinite funds to invest in technology, but a lot of companies struggle with how to offset the squeaky wheel with an objective, what’s best for the company, approach.  This is a good topic for a separate day.

I love math because it takes opinions, emotions, and internal power plays out of the equation.  It levels the playing field.  A resource-bound IT organization causes executive leadership to say “NO” to initiatives that have real business value.  Status Quo causes these initiatives to sit in the backlog, and ROI slips away with every passing week and month.

I’ve worked with several companies who sheepishly laughed when I pleasantly reminded them of how expensive their delays in moving forward were.  One had a $40,000 per month undeniable opportunity to fix.  Their internal bureaucracy took them over eight months to pull the trigger.  The cost for us (a previous company I worked with) to solve the problem was $300,000.  You do the math.  They knowingly let status quo, amounting to over $320,000, slip away in the eight months they dragged their feet while they knew that $300,000 could fix the problem.  Their IT team was busy and couldn’t take this project on, plus there was some trepidation to outsourcing the work.  The cost of the status quo was significant.  In total, their cost of status quo plus our fees was around $800,000.  A 20-month ROI instead of about 8.

Here is Centare's Project ROI Calculator showing what a 6-month delay in a project can mean.  In this case, the client has identified about $600,000 in annualized benefits to solve the problem.  Yet, due to internal resource constraints, they just can’t get to it for six months.  This doesn’t even account for the peril of not being responsive to market demands which can have a much greater impact.

How is the status quo impacting you and your organization? Doing nothing is pretty easy until you start to do the math. Centare can not only help you move projects from start to finish sooner, but we can also help you with the higher-level framework needed to make better decisions about where you place your technology bets.

Hopefully this helps you think differently about how your company views the importance of investing in technology – regardless of your internal capacity constraints.  Be it with Centare or others, I encourage you to think differently about the resources at your disposal to solve your business problems.  This is made even easier when you consider how virtual our world has become in the past year.  We’re here for you and would love to help!

Try the Project ROI Calculator yourself here: 

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