“Apple announces iPad 2 with better, faster, newer ….. Bargains available on earlier version.”
“When software vendors continue to create new versions of every solution, there is pressure on us to stay with current versions; how do we manage such a paradigm with budget constraints?”
The first is news that everyone saw and reacted to depending on their reference point with the much coveted tablet computer that is a must have on many lists. Some queued up to get the new device last weekend, while others decided to capitalize on the available bargains on the earlier version. Few competing tablet manufacturers wondered on how they can keep pace.
The second was a question from an SME (small and medium enterprise) CEO to a panel of big enterprise CIOs in a seminar organized by one of the large office automation, unified communication, and collaboration solution vendor for the mid-market customers. Majority of the audience nodded to the question as if they all faced the same predicament and did not know how to resolve the situation.
There appears to be an inherent desire amongst us to crave the latest version of gadgets or software similar to the desires to keep up with the latest trends in fashion that vanity demands. The technology vanity also permeates organizations; after all the same individuals pride themselves flaunting the latest must have phone, music player, and camera, whatever.
Organizations can ill afford such a race and the break point has a direct correlation to the profitability of the enterprise and the contributions of the IT function. The enamoured CEO and CIO will also cite examples of how and why it matters and the benefit thereof to the business, customers, and off course themselves.
When this is weighed against the basic rules of conducting prudent business with rationale investments filtered using good governance rules, the decision shifts to what matters. Every organization has a set of rules for financial investments; these measure the results and provide a framework that applies in most cases to every decision. However, IT sometimes escapes this rigor with justifications ranging from necessity for security to lack of support on older versions, fear of obsolescence and many in between. In absence of tools to validate or ignorance, and the incessant push from the vendors, the SME customer faces devil’s choice.
Irrespective of size and compulsions driven by technology vanity, vendor threats, competitive scares, boardroom chatter, or peer pressure, the rules of good investment decisions should always stay in the forefront. My answer to the question from the CEO was, “We still think like the SME we were in the past. Every investment has to answer the following questions: Does it help the customer, employee, or shareholders? Does it create a new capability we require to differentiate? Is it required by law? If none applies, then the investment is not undertaken.
But then the thirst for the latest is irrational. We have become participants to a mega race to acquire the next. There is no justifying the next version of laptop with the latest processor, nor any rationale for the next zillion megapixel camera. Why do we need the latest version of communicator or the micro-app on our phone? I think the simple answer is because it is there!