It’s rare to come across a technology budget that hasn’t been set based on past renewal terms, a positive demo from a vendor or some other form of historical purchasing behaviour. As a result, technology stacks continue to increase in cost while delivering no real change to the amount of work that needs to be done to keep a business running.
It’s not as simple as asking what you should spend your technology budget on. Rather, you should focus on the constraints that exist around the output that you’re trying to produce, and try to determine the value of relieving those constraints through technology. And then you have to compare that value to the cost of running the technology. The rest of this document outlines a process for ranking potential technology purchases and then identifying where the greatest returns on investment exist.
Start with the constraint, not the category
The most valuable productivity gains are those that address a constraint or bottleneck in your operation. In the example above, it would make little sense to throw additional finance staff at the problem of manual invoicing reconciliation to process more invoices. Instead, look for ways to change the process itself, and accelerate those portions of your operation where your current process is already as fast and efficient as possible. In other words, throw technology at the slowest parts of your operation and watch productivity leap as a result.
Don’t approve any spend before you have outlined the constraints it will relieve in operational terms. You must describe the hours that will be saved, who will save them and what that time will be worth downstream in terms of avoided delays or rework.
A simple test before approval
- Which recurring task does this shorten, and by how much per week?
- Who owns the process afterwards, and do they have capacity to run it?
- What existing tool or licence does it replace, and when is that cancelled?
- If adoption stalls at forty per cent, is the business case still positive?
- What breaks if the vendor changes pricing or is acquired?
Where the returns actually concentrate
Various categories have different paybacks and time frames. So, by ranking them in an arbitrary order (e.g. Lowest cost first), the whole budget is risked and misallocated. The graph below shows how various categories normally perform in terms of return on investment (ROI).
| Investment area | Primary productivity effect | Typical payback | Main risk |
| Cloud platforms | Removes capacity planning and patching from internal staff | 12 to 24 months | Unmanaged consumption costs |
| Collaboration tools | Cuts meeting and email volume, shortens handovers | 3 to 9 months | Tool sprawl and fragmented records |
| Process automation | Removes manual handling from high-volume tasks | 6 to 18 months | Automating a broken process |
| Cybersecurity | Prevents downtime and forced manual workarounds | Loss avoidance, not gain | Controls that staff route around |
| Endpoint hardware | Reclaims lost minutes per user per day | 2 to 4 year cycle | Replacing on age rather than on symptoms |
| Network and infrastructure | Raises the ceiling on everything above it | Enabling, hard to isolate | Deferred until it becomes urgent |
Reading the table honestly
Two areas, Security & Network Capacity, do not translate into direct return on investment. These are foundational elements to support the rest of your technology stack. Under-investing in these will ultimately result in additional, often hidden, costs in the form of outages and associated workarounds.
Automation is a process decision before it is a software decision
The biggest returns in terms of quantifiable productivity gains come from automation of processes, which can be measured in very clear terms, as an example, automation of approval of expense accounts could potentially save 1 hour per approval instance, and if there are 10 approvals per week then that is 50 hours per year, which equals 2000 hours over a 10 year period, saving the salary of one person over that time.
First map out the current process, identifying the maximum amount of waste (inefficiency) in the process and cut out steps that are only there because they have always been done that way. Then automate the remaining steps, starting with the highest volume, most rule-based and lowest exception rate tasks such as quoting, onboarding, invoice matching and reporting.
Hardware and infrastructure still set the ceiling
Refreshing endpoints, typically considered to be the least fashionable component of IT expenditure, is actually one of the most reliable. Losing 8 minutes per staff member per day due to the slow performance of their machines and frequent reconnections results in a substantial loss of working time, translating to approximately 250 working days lost per staff member per year.
Rather than refreshing hardware on a set schedule (i.e. Every 3 years), look at the data (e.g. Support ticket volume by device, boot time, application launch time, battery life, etc.) to create a reliable ranking of when to refresh what. If that data is not being captured today, it is worth engaging a provider of IT services Sydney businesses rely on to baseline device performance before you commit to a refresh. The same principles apply to the network, identify wireless coverage blackspots and check that servers and firewalls have not been left on sub-optimal links to the cloud.
Sequencing matters
- Stabilise the foundation, meaning network, identity management and backup.
- Consolidate overlapping collaboration and storage tools into one authoritative set.
- Automate the highest-volume manual processes now running on that stable base.
- Review consumption and licence counts quarterly, and decommission what is unused.
When to bring in outside expertise
While your internal team may have the best understanding of your business, they typically are working full time and therefore are unlikely to have the time to go out to market and assess different technology vendors, plan and manage complex technology migrations, and complete security health checks. Outsource the planning and management layer of technology spend to IT services Sydney specialists who have the time, skills and expertise to ensure your technology spend is delivering value to your business.
Scope out the work of your IT services Sydney specialists in terms of outcome rather than hours. Set out the constraints of the problem you are trying to solve, the target measure(s) and define who will be responsible for the resulting system. Technology spend is truly productive when someone is accountable for the numbers it is designed to change.
