Common IT Mistakes Made by CEOs

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Running a business is stressful enough without having to constantly worry about technology. Most entrepreneurs and CEOs aren’t IT pros, but typically have an idea about what they need their technology to provide. Namely – automation, communication, and collaboration with customers, staff and partners.

If nothing else, most CEOs know they need the basics – like email and Internet access, along with basic productivity software. But then there are industry specific software choices, and software to tackle project management and CRM. It can get very complicated, very fast.

As a business grows, I’ve seen dozens of ways that entrepreneurs try to address tech challenges – everything from hiring a teenage neighbor who is great with computers to full-time staff. Then of course there are hourly consultants, or managed services providers. Every business is different, and no answer is perfect.

As a veteran of the IT industry and someone who has built a few businesses myself – and made plenty of mistakes along the way – I’m here to provide a few helpful tips and pitfalls to watch out for when it comes to managing technology and a business at the same time – hopefully while remaining sane and enjoying success.

In no particular order, allow me to share a Top 5 list of common IT mistakes I’ve seen made over and over. Try NOT to do anything on this list.

1.) Failing to Back-Up Data Properly

Here’s a sure-fire way to know if you fall into this category. Can you answer the question, “How do you back up your data?” With confidence and clarity? Do you know you’re safe if that server in the closet (that one that might not be properly cooled or protected) crashes or if there’s a fire or flood at the office? Who backs up your data? How often? If you don’t know the answer to this question, go find out. Right away.

And don’t think for a moment that if you are safe if your IT guy takes back-up tapes home every evening. Make sure you run a disaster recovery test at least once a year to make sure you’re safe. Make pretend everything at the office gets wiped out. Can you still operate the next day? The next week?

2.) Lack of Alignment Between Leadership and IT Direction

Like it or not, your technology choices say a lot about your business before you might even have a chance to speak to a customer. Put it this way, have you ever judged a person by the type of laptop he uses or the smart phone he carries? Technology says a lot about your personality as an individual and as a business. You should stop to think about the kind of business you run and whether or not the technology in place supports yoIT ur vision. If you want a culture of innovation but provide employees with old computers and outdated systems, you might have a hard time pulling that one off.

As a business leader, your responsibility is to set a certain tone and set of expectations. Make sure your technology enables your employees to fulfill them or you might be setting them up for failure.

3.) Buying Technology Without a Clear Business Case

Here’s one I see every week. A CEO either gets bad advice or decides for himself that he simply must have a certain new type of software or server solution and pulls the trigger without examining the business case. Would you believe me if I told you that I’ve been to companies where there are more servers than employees? Especially when you’re starting out, you should always investigate pay-as-you-go (or free trial) cloud computing options.

Many times, even full-time, trusted IT staff will steer a CEO wrong when it comes to technology buying decisions. I have seen it time and time again. Someone gets a hold of the latest issue of PC World and convinces the CEO that the business must have the latest software but can’t explain exactly why. No one stops to ask the tough questions like “Why do we need this?” and “What will it deliver?” Don’t just buy for the sake of buying the latest thing, make sure there’s a clear business case.

4.) Failing to Budget Appropriate Dollars and Resources

How do you know how much to spend on IT? Typically, I’ve found that it’s appropriate to spend about 1 to 1.5 percent of annual revenue on IT. This will at least give you a ballpark so you can budget and should include hardware, software, and support. This does not include investment in items like custom development or software applications that might provide specific revenue streams. Problems inevitably arise in any organization of any size when the CEO tries to skimp on IT. It’s the problems that you don’t even know could occur that could put you in trouble. Do your business a favor and invest properly in IT so that your customers and partners can count on you.

5.) Failing to Set Standards for Technology Conduct

Do your employees know what’s expected of them from a technology conduct perspective? Is it OK to use the corporate account for personal email and IM? Do you let employees use Skype, Facebook, LinkedIn, YouTube and other social media sites at work? These are important decisions and discussions you must have. Failing to do so may lead to embarrassing situations or even undetected viruses and problems. My best advice is to follow your company’s culture in setting policies.

If you prefer an open, laid back environment, there might be no harm in allowing occasional visits to Facebook, but it’s important to put policies in writing along with protective technologies, and hold employees accountable. After all, that’s your job as CEO.

I hope this list helps you get a handle on some of the key IT challenges and decisions you must face in order to run a successful business. Obviously you’ll run into other problems along the way, but if you set clear expectations, do your homework, and ask the tough questions before buying anything, you’ll be way ahead of the game.