In today's fast-paced business environment, organizations often rush to acquire new technology without fully utilizing the tools they already have. This practice leads to significant waste and missed opportunities to maximize business value. Senior leaders must reconsider their approach to IT investments, focusing first on baselining and optimizing existing resources before looking outward for new solutions.

Know What You Already Have

Before you buy another “shiny object” do you even know if you have this product or similar in your organization? An excited functional manager may be quick to state that there is “nothing like this” already at the organization and “must have” the latest app they found on the Internet. But to pause first and ask if you have the CAPABILITIES already at the organization is your secret to saving thousands of dollars. While the applications and vendors are different, the question to ask is about the capabilities the technologies provide. Do you know what capabilities already exist in the organization? Even just saying this, you can see how even this could expand beyond just the technology to your people. But the first step to smart IT investment can simply start by knowing what you already have.

A comprehensive inventory of current IT assets is the first step toward optimizing your technology investments. Again, I like to emphasize the capabilities, but first, start with the inventory. If you do not have this clearly listed, it can be hard then to research what each tool is capable of. However, the more you build this out and maintain it, the easier your decision-making will be when debating the merits of future investments. Do not be afraid to ask the hard questions and have teams really dive into EVERY technology investment, no matter how old. Just by walking through this activity, you will start identifying underutilized tools and redundant applications already existing in your ecosystem that need to be eliminated before adding more. Consider that one 2024 study showed that up to 30% of software licenses are either unused or underutilized. By addressing these gaps, organizations can save millions annually. (Source: IT Cost Cutters 2024 Report).

Maximize Existing Investments

Once you have a clear understanding of your IT landscape, the next step is a two part process.  First, you want to seek out what each is being used for. This is really important because it’s about the business value the IT is providing. What business application does each technical investment provide? You want the business purpose, the WHY, for each IT investment. Just by doing this activity, you might be surprised of either the technical investments that are no longer being used or worse – realizing that there are more than one tool in the organization that does the exact same function.

Now the fun comes. You know what you have but do you know what you need?

What are your business needs?  What do you need to be able to do?  This might be the harder challenge if your organization does not have enterprise architecture teams that identify the business operations and value streams. But this is critical to look at your technology investment. Because then you map your technical capabilities to your business needs. The matrix is your answer of where you do (and do not) need new investments. Technology should be helping you to achieve the business goals. Two error-prone situations are having either 1) more than one technology to satisfy the same business goal (and therefore, redundancy that is often quite expense) or 2) you have no technology that is helping to deliver a business need (which can be quite the disadvantage in the high-speed technical world of today and tomorrow). But you need this kind of insight because mis-alignment is very costly to your organization. For example, CFO Dive reports that businesses waste an average of $18 million annually on unused software-as-a-service licenses. These are funds that could be redirected toward strategic initiatives and more (Source: CFO Dive, 2023 Report). Where do you have funds that could be diverted to achieving those business needs?

Make Informed Decisions for Future Investments

The detailed analysis is how you get to informed decision-making. With the analysis clearly laid out (a matrix is a powerful visual of the business needs to technical capabilities!), now you can easier to address the issues with the right approach. For example, if you have technical tools that enable the business to succeed in a process or product area, yet that area is lacking in performance, then you know it is not a technology challenge. That area might be ripe for providing additional training for teams, exploring advanced features of existing tools, or repurposing underused resources. Buying another tool may not necessarily be the solution, especially if you have to get rid of the technical debt of the original technology not measuring up to the desired business goals. But then you can see if you have resources that could be leveraged for more than one business need. Optimizing current resources not only saves money but also provides valuable insights into what your organization truly needs. When the time comes to invest in new technology, you can make informed decisions based on clear gaps and strategic priorities. Leaders should prioritize technologies that align with business goals and offer measurable ROI over what the ‘latest and greatest’ technology is.

Conclusion

By focusing on baselining and maximizing existing IT investments, organizations can avoid unnecessary expenditures and unlock hidden value within their current resources. This approach not only drives financial efficiency but also positions businesses for sustainable growth. Remember, the most impactful IT investments are often the ones you’ve already made—make them work for you.

1.  Conduct a detailed audit of all IT assets, including software, hardware, and licenses. Identify any redundant or underutilized tools to eliminate waste.

2.  Schedule regular reviews of IT resources to ensure alignment with current business needs.

3.  Organize training sessions for teams to enhance their proficiency with existing tools.

4.  Explore advanced features of current software to uncover untapped capabilities that could address key business challenges.

5.  Develop a strategic roadmap for IT investments based on business goals and identified gaps in capabilities.

6.  Prioritize technologies with measurable ROI and clear integration paths with existing systems.