May182017

Peter Lench of Simplisys talks about how Brexit is forcing business and technology leaders to rethink their entire IT strategy. 

Whatever your views about the outcome of the EU referendum, the UK is definitely in for a period of uncertainty, which overall is probably a bad thing for businesses, investors, and consumers alike.  So how will this impact IT strategy?

There are already signs that the cost of hardware and software sourced from overseas will increase in line with the fall in the value of the pound.  This will have a direct impact on IT budgets and spending forecasts for the coming year and leads to a number of questions:

– How exposed is your department to a disproportionate increase in running cost?
– Exactly what will be the financial impact and can you afford it?
– Which proposed projects need to be reviewed and business cases re-submitted?
– What about data security rules? Is data in EU data centres going to continue to be acceptable?
– What is your plan for the coming months?
– How are you going to approach this conundrum?

Strategic planning 
Unfortunately there is no magic wand that you can wave to answer all the questions, that is why IT strategists get paid the big bucks. The truth is you cannot change your IT infrastructure quickly hence the need for strategic thinking and planning. Predicting future trends in technology and aligning resources with company goals and ambitions is itself challenging enough without having to consider the effect of external influences like government legislation or Brexit has on your business and budgets.

The value of the pound has plummeted against major currencies such as USD and Euro post-Brexit vote and could fall further depending on how the government negotiates the planned exit.   Indications are that the cost of IT components sourced overseas will increase by as much as 20%. Would a policy to source hardware, software and services from the UK wherever possible mitigate the risk of these major price increases?
  
Tactical planning
In these uncertain times IT executives need to take stock and review plans. It is prudent to review your top ten running costs especially support contracts and agree extended fixed-price terms wherever possible. It also makes sense to review proposed projects in terms of risk/cost and negative risk/cost analysis. I am sure as IT professionals you are already on the case.

One thing that is not so obvious however is the unknown direction that the business may go as a result of the Brexit vote. In turbulent market conditions successful businesses need to be nimble and able to react to opportunities and adopt changes quickly. This means that business systems must be able to be re-configured quickly and easily.

Larger businesses still running legacy mainframes and applications are clearly unable to react quickly; any changes to these environments take time and come with significant cost. Also medium sized businesses that have outdated client/server applications may find that while their running costs are reasonable, they are unable to make changes quickly and therefore not nimble enough to exploit unforeseen opportunities. Even those companies that have adopted browser-based applications, while best placed to react, are not in the clear.

Reacting to the post-Brexit landscape  
Modifying legacy mainframe or client server applications to react to the new business landscape post-Brexit will typically require external consultants or dedicated internal IT staff. Consultants would spend weeks if not months scoping the work and several more months delivering the modified solution, which may or may not actually fit your requirements.  In the meantime, your nimble competitor, which adopted modern, easily tailorable systems that can be modified by internal staff in a day or two (or sometimes hours), without code changes or complex scripting, would be in the market taking your market share. By the time your organisation is finished paying consultants the market has moved on and your organisation is out of the game.

It should be noted however that not all modern browser-based applications come with comprehensive and intuitive administration features. When change is required most end users are presented with two options, either go on expensive training courses to learn a bespoke scripting language or pay the vendor a consultancy rate to make the changes. Both options are time consuming and expensive. A big part of IT strategy must be to buy into systems that are web-based and can be re-configured without requiring specialist knowledge via an intuitive user interface utilising point and click and drag and drop technology.

Here are 4 steps to follow to ensure your IT strategy is ready for Brexit.

1. Review exposure to price increases by evaluating hardware, software and other IT components used, paying special attention to country of origins
2. Review the risk/cost and negative risk/cost assessments of proposed projects that have been approved and scheduled for go live in the medium term (12 – 24 months)
3. Review support renewal dates and prices for top 10 key products and negotiate extended term fixed price contracts for as long as reasonably practical
4. Learn the costs of repatriating data to UK if necessary.

As well as above future strategic planning should include consideration to moving to a more nimble IT infrastructure taking into consideration the following:
1. Review of web-based applications
2. Consider cloud, on-premise or hybrid cloud options
3. Wherever possible, preference to UK source
4. Adopt systems with modern UI in the administration functions that do not require either external consultants or bespoke training to re-configure

Peter Lench is director at Simplisys.

Simplisys is exhibiting at SITS on stand 809.  It will be demonstrating Simplisys Service Desk, which its describes as a ‘flexible software application that is designed to enable internal
 stakeholders to modify the system as and when required.

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