11 tips to optimise your IT investments

For many companies, IT is the second largest expense after personnel costs. Therefore, it is important that the decisions and implementation of IT investments are made in the right way. As a CFO, having a strong, decision-making position when it comes to IT investments is therefore increasingly common, as the role is more involved in the company's IT strategy than ever before. The challenges of this role are many, and we've gathered some tips that apply regardless of industry or business.

A well-developed business case is a must for all major IT investments. This not only provides a financial basis, but also shows the company that there is a well thought-out plan for the project. For many organisations, major IT projects tend to be more costly than first anticipated, both financially and in terms of time. It is therefore important to ensure good requirements definition, project management and cost control for all major projects. Just as important as having a well-developed business case, is also to continuously follow up against the basis on which the business case is built.

Optimise your IT investments with these tips:

• Ensure that the IT strategy is anchored in the overall business strategy. If these are not linked, the risk is that an investment will be costly in several ways.
• Move from a budget-driven IT platform to a function-driven one.
• Use rental arrangements that mostly result in lower total cost, while avoiding the complications of depreciating, financing and accounting for current assets.
• Standardise equipment to a few models to reduce overall handling costs. By making planned replacements, you get a standardised IT platform, leading to lower support and maintenance costs.
• Use exchange options. This gives you enormous flexibility while avoiding paying for equipment you no longer need.
• IT needs to have a constant dialogue with the business throughout development projects. By supporting the business processes and the individuals working in the processes, IT becomes more business-driven and creates better collaboration within the company.
• Seeing IT as part of the business and not just a support function creates better opportunities for growth and profitability. For this to work in practice, you need to have the right skills and people who understand both business processes and IT and have the ability to combine them. Also, do not underestimate the content of financial/financial expertise in major projects.

Choose your supplier carefully.

Some of the keys to a successful partnership are financial stability, competence, relevance and a willingness to continue to develop with their clients. Here are some tips to consider when choosing a supplier:

• Control and predictability are two important parameters for a CFO. Responsibility is shared between the supplier/partner and the commissioning organisation. There should be knowledge of what an expenditure item costs over time and a possibility to easily steer towards this. Transparency is important if negative surprises are to be avoided.
• There are always risks in IT projects and it is important to be aware of them from the start. There is a risk of buying on price and not knowing what is included, whose responsibility it is if something happens, etc. This parameter is often what separates a well-functioning partnership from a pure supplier/customer relationship.
• Flexibility is a key word that can encompass many things. For example, what happens if the number of users decreases or increases? Having a partner that allows costs to change as needs change is very valuable.
• Tying up capital is something many organisations want to avoid. As A Service solutions, which are usually rental models with monthly or quarterly payments, are becoming more common. For a buying organisation, a pure rental offer that does not tie up capital and is not an investment in a balance sheet is an increasingly important parameter.

Using an external financial partner who knows and understands the challenges and has multiple solutions that can support the impact the company wants to achieve is one of the most important tools a CFO should have.

AddPro As A Service is AddPro's own finance company that specialises in transforming high total costs into flexible monthly costs. AddPro As A Service also provides the ability to lift items from the existing balance sheet into a new and flexible arrangement. Want to know more about the service? Visit our website or contact us at solutions@addpro.se