Tag Archive: technology

  1. Technology Debt – What Is It, Do You Have It, and Why You Need to Address It

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    Most, if not all, businesses today rely on IT systems of one type or another to operate.

    In an ideal world, these will be modern IT systems that require minimal and predictable effort to maintain and operate in the same capacity as when it was first commissioned.

    This does not mean there will be zero costs to maintain a well-operating system.

    • If updates are installed, hardware is kept in good working order, backups are regularly made, and performance is monitored, your system will function as expected, with costs related to these activities costs typically a solid / high return IT investment
    • If you have chosen the right IT system for your needs, configured it correctly, and have the right blend of in-house and external resourcing to maintain it (see above), it should perform as needed, cost effectively, for a sustained period of time.

    Combined, you should be empowered to focus on managing and growing your company, with your IT systems acting as enabling tools (versus constraints).

    Unfortunately, none of us live in an ideal world. Most of us must deal with some mix of old, aging, or outdated IT applications that are utilized for core business processes. Even those of us who have been able to migrate to Cloud and SaaS platforms often live in a world where, individually, these applications are great, but implementation was approached in a siloed way, meaning there is little to no integration between core systems, making seamless data sharing and automation an unrealized promise.

    Combine this with a lack of in-house IT resources to maintain or update system configurations (the people who implemented the system no longer work for you, you don’t have enough people who “know” or understand the systems well enough, or customizations and code bases have somehow become unmanageable, etc.) and you have “technology debt.”

    What this means is that, as technology, business needs, and your organization evolve over time, relative IT system performance degrades (e.g., the system gets slower or harder to use, benefits delivered decline, the system doesn’t have all the “features” etc. you want or now need, it is hard / slow / impossible to make changes, and issues with “capability fit” to current business needs and processes emerge) and / or the effort and cost required to operate, maintain, and enhance your IT systems grows.

    Does any of this sound familiar?

    Unfortunately, all too often, addressing technology debt (i.e., implementing modernized IT systems) is deferred until “pain” becomes too acute or unbearable to ignore, with IT system issues either hampering revenue growth, profitability, or operational efficiency and effectiveness, either as an organization, and / or relative to your competition.

    Letting technology debt get so bad that the rationale for modernization is “we have to” is a sorry state of affairs, based on misconceptions and fear over costs, difficulty to implement, and a general aversion to change. The reality is that, while IT system modernization is seldom “easy”, the goal is to enable performance improvement and the end result of IT modernization done well is typically a reduction in total cost of ownership / operation and meaningful returns on the investments made, both financially and operationally, with any change to business processes viewed as overwhelmingly positive over the medium to long term.

    Still, if you believe or suspect that aspects of your IT systems are holding your business back, it is still hard to know where to start: your IT department are probably well able to explain what the issues are, but less able to articulate how to solve them moving forward, because their focus and expertise is typically business continuity versus systems modernization.

    This is why Core Catalysts has developed a rapid and cost-effective IT assessment methodology that helps identify and diagnose IT issues, opportunities, and technology debt, and make recommendations on how to modernize systems cost effectively to deliver meaningful results.

    Over the course of hundreds of engagements, we have helped our clients reduce licensing and maintenance costs, update business processes, and improve profit margins, often leveraging modernized “Cloud” and “SaaS” solutions in targeted, thoughtful, and integrated ways to deliver enhanced business results.

    If you would like to find out more about our IT assessments and system modernization expertise, reach out to us today!

    –Mark Jacobs, Client Service and Delivery

  2. Still the Best Kept Secret in Kansas City…

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    We posted this several years ago and get reminded often from our clients and prospects that it is “spot on” with our message. This means it comes both from our experiences and our client feedback gathered over time – and you can check our work on that!

    Here is THE best kept secret in Kansas City for improving and growing your business. Core Catalysts is a management consulting company that has some of the best-handpicked minds in town.

    We have experiences across multiple industries and multiple disciplines. We are supported by tools and templates that are brought to bear and accelerate solutions that clients need. We are focused on making our clients successful. Making clients successful can take many forms, including:

    • Modernizing a major set of applications that are aged and costly to support – reducing “technology debt” and improving support for the end customers that use these applications at a price point well below other major consulting firms.
    • Process improvement of a back-office process that streamlines the Accounts Payable efforts, Invoicing accuracy, or Inventory Management to name just a few.
    • Program and project management of key business initiatives, like implementing a new core banking system in record time that enables the acquisition of more clients.
    • Providing some stability in leadership gaps on a flexible basis so that the company can recover from key issues in its staffing – objective, aggressive change leadership for significant business growth.
    • Assisting with the fast and accurate acquisitions of multiple business entities and then driving an integration plan that results in overall business value increases.
    • Facilitating the development of strategic plans that have clear executive buy in, actions, responsibilities, and metrics.
    • Assessment and identification of business issues that may not be apparent to the existing leadership teams; a fresh set of skilled eyes that can spot issues with low gross margins, sales effectiveness, branding issues, gaps between strategy and execution plans to name a few.
    • Development of clear action and implementation plans that can be used by the client’s existing team while training them along the way. Put simply, we teach our clients how to fish.

    So why is Core Catalysts the best kept secret? For several reasons: Our advertising and marketing budget is small (we keep our overhead rates low). We are humble mid-westerners not used to bragging to everyone about our successes, and many companies may think they can’t afford us, not knowing that paybacks on our services are typically astronomical. As a sales message, that’s understandably hard to believe – but we have decades’ worth of experience and client testimony to prove it!

    So give us a try, and more importantly, ask our clients to give you a sense of reality and comfort. We have many client success stories, ranging from the $50M clients to the multi-$Bs clients across multiple industries.

    —Jim Wadella, Owner/Founder

  3. Communication: Finance and IT Groups

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    We have been supporting clients across many industries and sizes for as many years. Our group’s collective experience is estimated at over 150 years, in fact. Our team has worked at notable consulting companies including Ernst & Young, Deloitte, Alvarez and Marsal, Cognizant, and Cap Gemini to name just a few. This coupled with team members that have worked in multiple industries and companies such as FIS, Jack Henry, BNSF, Electronic Data Systems, Lloyds of London, and the like provides us a strong base of knowledge and many lessons learned that can be shared. We support both the IT needs of the company and the finance and accounting needs, which allows us to understand both sides of the situation.

    This post draws upon that experience base to offer up ways to bridge the gaps identified with the end goal of improving business performance.

    Trends Impacting Communication

    The trends we have seen that have been causing the gaps to arise include:

    • The sheer pace of technology changes – where new options exist for business applications like CRM, ERP and BI, networks, and computing. With Artificial Intelligence tools hitting the mainstream – we are experiencing an even faster pace of change.
    • The rapid increase of Cyber Security related issues – the proliferation of ransomware, sophisticated phishing attempts, and the availability of Cyber Security insurance to help companies mitigate risk.
    • The CFO’s role in many companies has been emerging – and extending to covering the Information Technology group as well as traditional finance, accounting, and treasury functions.
    • CFOs have not typically been trained in technology topics through their education and work experience – and computer science majors have not been classically trained on finance and accounting topics.
    • The building technology debt in the company – due to under investment over the years in key applications typically expressed as, “the third-party vendor finally says it will ‘no longer support application x no matter what the price,’” and other examples.
    • The changing roles in IT with the importance placed on Chief Technology Officers (CTOs) versus the Chief Information Officers (CIOs) the various shades of CIOs.
    • The emergence of cloud computing – where companies are now ‘renting’ their compute capacity versus having a fixed asset approach with internal data center and servers. Companies like AWS and Microsoft have been experts at providing these services while providing a complex set of pricing and terms that can challenge the brightest CFO and CIO.

    Challenges: The Root of Communication Problems

    The problems we typically encounter can be broken down into several categories:

    1. Communications mismatch – the finance and accounting terminology does not match up with the technology terminology.
    2. IT groups not viewed as strategic to the business – CIOs/CTOs not having a seat at the executive table shield them from knowing the strategic direction the company is taking.
    3. CFOs uncomfortable with understanding the technology terms – and how to ask intelligent questions.
    4. IT leader talks in terms that only another tech person would understand – causing confusion and frustration. Just trying to explain Agile software development process to anyone not involved or trained on the technique!

    How to Bridge the Communication Gap

    Now for the payoff: ways to bridge the gaps we have collected over the years. No one size fits all so take the ones that meet the needs of the organization and jettison the rest.

    1. Give the IT leader a seat at the strategic table – this allows the vision to be more closely mapped to the current technology footprint. This doesn’t always require an organizational change, i.e., IT leader reporting to CEO. Just invite them into the strategic planning discussions.
    2. CFO needs to invest some time in understanding IT trends, terms and how it affects the current IT portfolio at the company. This can come from attending periodic third-party sessions on technology trends, reading magazines like CIO Magazine, Wired, etc. It can also come from understanding the current IT portfolio for the company and associated ‘road map’ if available.
    3. The CFO and CIO/CTO (or IT leader) need to invest time educating each other on their perspectives. Maybe use some outside facilitation to help enable and hold each person accountable. Take baby steps in defining some key metrics that have both IT and Financial metrics. Have each person share and explain the reporting they use to communicate to the organization.
    4. CIO/CTO (IT leader) needs to invest some time understanding the financials for the company, and how things like forecasting are performed at the cursory level. This may include taking an external class on accounting, finance, and/or the like. It could also include attending third-party presentations on economic forecasts or things like merger & acquisition classes (how companies are valued).

    How can we help you?

    If any of these ideas strike a chord with you, you are not alone. We have tools and examples of how to bridge the gaps that we are more than happy to share with you and your teams. It would be nice if there was just one book to read or one website to review that has all the answers you need. Unfortunately, that is rarely the case. Core Catalysts can certainly give you a healthy head start, however.

    All the problem areas can be overcome in our experience, and this always leads to business improvement results. We stake our reputation on it. Just ask our clients.