28/04/11

David Ballard, CEO of Northdoor

Technology is a difficult area to get right when you start a business or spin out of a larger company. We regularly encounter a number of teams who’ve decided to leave and create their own entity, or whole business units spun out of a larger firm. But when you’re used to relying on the ‘host’ company’s IT systems and resources and you’re in the heady early days of premises, VC meetings and business planning, IT is the last thing on your mind.

Getting technology decisions wrong early on will hurt you down the line. Spend too much and you could divert resources away from other key functions. Spend too little and you could end up with a platform that won’t scale as your business expands. Invest too much in hardware and you’ve got big capital expenditure on depreciating assets — leap headlong into the cloud and you face data and security issues, especially in regulated industries.

Getting the approach right from the start, then, is essential. Your technology plans needs to track and support your business plan, while also incorporating sufficient wiggle room for when you need to tweak the strategy.

The first step is always to analyse your business requirements and choose the most appropriate IT delivery option in each case — this is when the business and the technology team needs to work especially closely together to work out where responsibilities and risks lie, and to ensure that you’re all on the same page at the same time. The four key factors to consider are when you’re starting out are:

The business requirements
System interoperability
Security and regulatory compliance
Service Level Agreements (SLAs)


When it comes to cloud computing, it’s important not to let the IT hype cloud your judgement — cloud is now a mature delivery model for IT services, but it isn’t a one-size-fits-all solution.Some business services are ideally suited to cloud, many are not. You might find that the specific application required to support your business is not available via cloud or it does not make strategic sense to hand over to a cloud provider.

What really matters is finding the most appropriate way of providing services to the business. Depending on your business, there may be significant financial and functional benefits available from moving some applications to the cloud. There will also be some applications where such a move is completely inappropriate, and probably a whole spectrum of possibilities in between.

Decisions about IT when you’re starting out should be driven by the business requirements, not by the availability of technology. The first question to ask is always: what services does my business require from IT? You can then look at each of these services in terms of the applications that will support them, and ask whether those applications are available from the cloud. Vanilla applications for services such as email and office productivity will naturally be easier to obtain than customised, industry-specific applications.

By mapping out existing business process flows, you can identify the dependencies between each, highlight the most critical systems or processes, and determine how the underlying systems should talk to each other. Even if moving to the cloud will provide significant operational cost-savings for a particular application, it may be the wrong strategy if it fragments the overall flow of business processes and creates potential information bottlenecks. As a start-up or spin-out, you can’t afford expensive mistakes early on, so be sure to examine all options, don’t get sold too heavily on the wonders of cloud and make sure your technology platform can scale along with the business.