I understand that one should not spend money that one does not have. I am not advocating deficit spending, accounting magic or blowing your budget. Instead, I am advocating responsible investment.
Too many managers I encounter are rewarded for simply failing to spend money, or fear being penalized for spending money. Being "under budget" implies that you met the organization's goals by spending less than expected. This means either that you are good at getting results or bad at making budgets. "Failing to spend money" is not the same as being under budget: if you don't accomplish your goals, then you are failure who at least didn't waste money while failing.
But simply avoiding investment for the sake of not spending money is not fiscally responsible: it is the opposite of fiscally responsible. To make decisions without regard to future benefit is a mistake. If you want to go down this path, I can save you some time: this analysis leads to paralysis. Using this philosophy, you should never spend any money or take any action: not spending money will leave you with more immediate cash and not taking action will avoid mistakes. Just ignore the fact that not spending money can lead to lack of future money and not taking action can lead to not having a job.
To take a rather tired example from home ownership, not repairing a leaky roof gives you a short-term benefit (your bank account retains the money that you would have spent on the roof) and a long-term liability (your bank account will be hit much harder when the roof and collateral damage become so great you can no longer ignore them.) By the same token, if you don't choose a contractor, you avoid choosing the wrong contractor. So you have that consolation as your roof falls in.
I run into this same behavior in business fairly frequently, in the guise of the following sometimes reasonable statement: "we know we need X, but we’ll get it in the next release / next version / next purchase, so we will do without it right now."
The useful life of most of the systems I encounter is between three and five years. If you put off the decision for a year, you have lost much of the benefit the system can be expected to provide. If you put off the decision for two years, your potential loss is that much greater.
If your investment is a reasonable investment, you are missing the return on that investment every year you defer. In real terms, not spending money, if you spend it wisely, is actually costing you money.
When we speak of IT investments, we speak of more than dollars: IT can provide automation which makes your personnel more productive and less harried. With the time not spent in drudgery that should be done by a machine, your people can actually think about their jobs and improve their situation.
There is also the experience factor: if you make investments early and often, you can often make smaller, incremental investments and be guided by actual experience as you move toward your goal, instead of being guided by marketing literature as you wait until the last possible second and then leap onto a bandwagon.
I have heard a cogent counter-argument from reasonable people, which runs something like this:
- IT transitions are risky, even if done well
- There will be less risk if there are fewer transitions
- Fewer transitions means bigger ones farther apart
- The individual transitions might be more painful but ultimate time line is shorter and the new systems end up with a bigger footprint
I sympathize with the claim that larger organizations have such deep tendencies toward inertia that multi-stage plans are scary. But leadership requires actually taking reasonable risks instead of simply avoiding blame.
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