Many System Managers are in the awkward position of having a great
deal of responsibility for one of their company's most valuable
assets - its information - yet having very little authority to
act to preserve that information or care for it, particularly
when it comes to purchasing authority. The reason for this is
entirely within your control as the System Manager.
Get the idea that there are two hats you wear as System Manager:
One is the responsibility for ensuring that the computer system
produces the products and services required of it for the company.
The other is the responsibility to act in the best interests of
the company in all things. The first is the System Manager
hat and the second is the staff member hat. Doing what
is best for the system and its users is the System Manager hat.
Doing what is best for the company is the staff member hat.
These two hats are usually in sync; what is best for one is best
for the other. But there are occasions when the two seem to conflict.
Nowhere is this more evident than in purchasing. For example,
the CPU is saturated and really needs to be upgraded. Clearly,
a bigger CPU is in the best interests of the computer and its
users. But how does the (substantial) cost of that CPU
affect the company's interests?
If the CPU upgrade costs $100,000, you may find considerable resistance
to your spending that much money, particularly if your spending
authorization limit is $500. No one doubts that you know what
is best for the computer and its users. What they are concerned
about is that you do not know what is best for the company. Perhaps
that $100,000 could be spent much more profitably elsewhere in
the company. How would a System Manager know? He knows nothing
of profit and loss, return on investment, or tax and balance sheets,
right? Wrong. You know all you need to know of these things already.
I'll show you.
If you have read Appendices A and B, in this book, and worked
through the worksheet in Appendix B, then you already have a clear
idea of the terrific value of a computer system to the company.
You know that it can enormously increase the production and income
of an area. You know that it can be a great burden financially
if it is not cared for and managed properly. And, with the data
from your Appendix B worksheet, you even have the dollar figures
to quantify the importance of the computer system in terms that
can be well understood by management: money.
All you need now is a foolproof means of communicating your information
to management. To do this, you need to be able to adopt the management
viewpoint, the investment viewpoint.
Most people understand investing. You put money into a savings
account and a year later you can take that money out with a little
extra added to it in the form of interest. That interest is the
return on your investment. It is what comes back to you
(returns) at the end of the investment cycle. This is perhaps
the simplest way there is to make a profit. The only problem is
that the profit is so small.
Most people understand that companies run on profits. When they
make a profit they survive. When they don't, they don't. But few
people realize that a company, any company, must make a very dramatic
return on their investment to survive. Our stock market mentality
has people thinking of companies as commodities that are bought
and sold like pork bellies. This viewpoint is OK for capitalists,
stock brokers and hostile takeover artists, but it is not the
viewpoint of management. To management, a company is an income
producing machine. Management has to make a company produce
income. If they can do that well, they survive and earn bonuses.
If they can't, they are replaced.
For you to communicate with management, you have to be able to
adopt their viewpoint. Try it. What do you think management wants
to hear from you about your proposed CPU upgrade? They want to
know how much income it will produce, how much profit
it will generate, how much return they will get on
their $100,000 investment.
Now this is really important: Management is not anti-spending.
They are not dead set against spending anything at all. Just look
at how much your company spends every week; they spend virtually
all that they make. The trick is not to avoid spending. The trick
is to spend well.
Your job, from your hat as a staff member, is to communicate to
management how your proposed $100,000 expenditure is in the best
interests of the company because it will result in more than
$100,000 in income. Of course, you also have to show that
it will do so quickly.
How quickly? Very quickly.
With a savings account, you can put some money into the account
one year and take it out the next, with interest. All during that
year, your money is right there in the account, safe and sound
and earning interest. You can get it back any time.
With a business, each week you spend your money. All of it,
or very nearly. When you spend it, it's gone. It's not there
any more. It's not sitting in a "safe" savings account
where you can get it back. It has been spent on such things as
rent, payroll (your pay, for example) and equipment (a
CPU upgrade, for example).
So the money the company made that week is gone. Yet the company
has to bring in more money the next week to be able to cover the
next week's rent, payroll and equipment, and so on, week after
week. Where does the next week's income come from? It comes from
the paid staff using the purchased equipment in the rented space,
who create products or services that are exchanged with customers
Are you with me so far? If not, read over the previous few paragraphs
until it is clear.
Here is the heart of managing a company: each week, the production
of the staff and equipment has to produce enough to exchange for
the income needed to pay the staff, buy the equipment and rent
the space, plus a little extra. And it has to do so in time to
make the next round of payments. Every week, the company is reinvesting
virtually everything it has to raise the money to make it through
another week. If your $100,000 expense will derail that plan,
you won't get the money. If your $100,000 expense won't derail
the plan but might erase all the profits, you probably won't get
the money, either. But, if your $100,000 expense will bring
in $100,000 in income, plus a tidy profit, your expense
stands a very good chance of getting approved.
The worksheet in Appendix B shows you how to calculate the value
of a defragmenter to your company. Collect up the data you need
to fill out the worksheet, do the calculations, and then write
a memo to accompany your purchase request. Lay out the memo in
First Section: The exact situation your purchase is intended
to handle. The situation, in this case, is the horrid expense
fragmentation is incurring for the company. (To you, it's a performance
problem; to management, it's an expense. Get the idea?)
Second Section: All the data needed to demonstrate the
truth of your assertions about this horrid expense, and to support
your proposal that purchasing a defragmenter will resolve the
whole matter and pay for itself and bring in a tidy
profit to boot. Hint: If the data is lengthy, put it in attachments,
keeping the cover memo to one or two pages.
Third Section: The solution, which should be entirely self-evident
at this point, which is to approve your purchase.
Do this, and you will get your truly needful purchases approved