Tech Investment Is Lackluster Without Strategy– September 12, 2013 by Mark Danczak

Technology is ubiquitous and is advancing more quickly every day, enabling capabilities that could only be dreamed of just a few years ago. When strategically integrated with the business, advanced technology can significantly impact the bottom line. The secret is to understand where the business is going and how all the tech puzzle pieces fit together to help it get there.

The reality is, very few companies are fully utilizing existing technology let alone planning for emerging technologies. Being strategic about information technology (IT) is not some event that happens once every couple years at a board meeting or planning session. IT needs to be actively integrated into the business, and high-level IT professionals should be involved in business decisions to help drive the greatest value. The challenge is not to just install new stuff; the challenge is to install the right stuff, at the right time, to fully optimize the business.

Take cloud accounting solutions, for example. Enterprise cloud accounting systems were only affordable to the Fortune 500 just a few years back. Now cloud accounting is more than just affordable; it is often preferable for delivering more functionality while optimizing business processes and making staff more productive. The ROI is meaningful even before you add the business value of the real-time, anyplace information and the fact that owners and top management can focus on growing the business instead of worrying about the accounting function.

Driving significant bottom line impact through strategic initiatives such as cloud technologies? Ok, where do I sign up? Here’s where things typically stall out. Unfortunately the vast majority of technology professionals are good at keeping the systems running and not so good at strategically matching business needs to technology capability. In many ways, business in general is at fault for the disconnect; it has developed IT staff and even many chief information officers (CIOs) to be order takers, measuring and rewarding them as such.

Business owners need to raise their expectations of their staff so IT can contribute to the bottom line. That means inviting IT to the proverbial table. And IT leaders need to realize that it is their responsibility to know the business, know the processes and know how the company makes money. Then everyone can start to think about the strategies for investing in the right technology solutions to optimize business objectives.

If the folks managing your technology aren’t strategic, you should consider augmenting the process with outside help. But be careful; unfortunately many technology consulting firms suffer from the same shortage of strategic thinking as many internal IT departments. It may take a while to get the right person in place and/or develop the necessary skills, but the payback can be high.

Contact a member of your Cohen & Company service team for further discussion.

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.