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Making Decisions on Technology as a CEO

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Making Decisions on Technology as a CEO

By: Steve Sadler, CEO, Allegiancy

October 03, 2015

A reporter from the online IT website TechRepublic recently asked me about which top decisions are the most important ones to make on a CEO’s first day in office and why.

The reporter was seeking the decisions that need to be made right away and a few sentences of context as to why it’s important to the CEO and the business as a whole.

As the CEO of a young and rapidly-growing enterprise for the third time in my career, I presented three key decisions in a question and answer format that have to be made by a company leader almost immediately. I think these decisions are instructive and helpful for all business owners and managers in the fast-moving world of technology.

Here is food for thought:

Q: Do you have the in-house talent or do you need to go outside of the company? Do I want to use contract vendors and service providers to create, optimize, maintain and service my technology platform? Or would I be better off bringing high-level talent in as full-time employees right away?

A: This question is a tough one. As a younger, fledgling company, it is very unlikely that you will be able to compete with bigger and sexier companies in recruiting pedigreed talent. Then you have the question of whether you really even know what you need and how to get there from here. I would almost always recommend that a CEO outsource the IT talent function to the best company you can find. Don’t let price per hour drive this decision. Focus on high quality, talented people that really ‘get’ the IT about your business.

Q: Custom-coded or out-of-the-box solutions?

A: Here too, it’s tough call in many cases. But you have to ask yourself, how unique are you really? Can you get rolling with off the shelf products and minimal customization? You need to think pretty hard about this, because a lot of capital can be consumed in specialized projects and you may not even fully know what outcome you need to achieve until after you have completed the project. I suggest that in fast-growing companies where product and service offerings evolve quickly, it is exceedingly dangerous to become wedded to a custom solution. My recommendation is go with the best-fit option in the marketplace and customize around the edges. When your product and service offerings have gone through a couple of development cycles, then maybe custom coding makes sense.

Q: Software as a Service (SaaS) in the cloud or purchase the software and host it locally?

A: In this case you can see a meaningful delta between capital costs and ongoing operating expense. The tradeoff between costs, flexibility, functionality and control can be very important, but do you really understand what is important to you? In some cases the cloud services sound far better than they are in practice and you may end up with a more unwieldly platform in the end. Be careful here and think it through. Most often a hybrid of cloud and company hosted will serve you best. Host the simple stuff like file servers, SQL database, back up drives and even your telephone system. Cloud and SaaS the really complicated and expensive applications at least until you figure out which ones are actually delivering on the salesman’s promises.

CEOs have to think about all of this stuff and more. Is our offering unique and customized in a way that creates a competitive advantage that I need to maintain? Does technology differentiate my product or service offering? And then the big question, how big a deal is all of this in terms of costs versus profits? You don’t need to be the next Google to profit from well executed technology strategies. Being a highly profitable small company can be really great!

Here is a link to the article on the TechRepublic website: http://www.techrepublic.com/article/5-tech-questions-a-ceo-should-ask-on-their-first-day-in-office/

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