Strategies for Your Digital Infrastructure: Part 2

High Yield

General Idea: build out a digital infrastructure that maximizes the output of your workforce (typically used with a minimal headcount).

Sounds like a great idea doesn’t it?

Absolutely. Everyone should try it! (A lot of companies do.)

Except this is one of those ideal states that mostly exists in theory.

To be fair, a lot of solopreneurs use this strategy–because they have to–but here’s the thing, the bigger your organization gets, the more difficult this strategy is.

That’s because it primarily relies on two things: automation and integration.

Trade Offs:

• Requires lot of automation and integrated systems in place, but can result in surprising levels of business value

• Likely reduces the “swivel chair effect”, but complex/integrated systems can get messy and buggy (may require outside help)

• Can mean greater revenue per employee, but margins start being eaten up by maintenance, support, and licensing with larger headcount or more complex processes

In-House/Proprietary

General Idea: build primary solutions and platforms from scratch to only be used by company employees.

This essentially takes the idea of DIY to the next level.

You’re not just modifying your car you got from the dealership. You’re building the whole thing from the ground up.

Companies will often take this approach when they feel confident they can build out their main platforms, like CRM or ERP, using a team of programmers and “save a few bucks”.

Trade Offs:

• Will reduce cost in licensing and implementation (likely won’t need an outside team to build it out for you), but now you’re paying for a team to maintain and update

• Your team will be missing out on potential value-add functionality, but your company has more control and can focus on what’s necessary instead of fluff

• SaaS or PaaS (platform as a service) solutions like Hubspot, Salesforce, Netsuite, Acumatica, Monday.com, etc. have an updated UX and UI; internal solutions, on the other hand, tend towards the basics (believe it or not, aesthetics and usability are pretty important)

• In-house software is often housed in on-premise servers, but then–depending on your company’s size–you might be ok with not spending millions of dollars on cloud storage

Genetic

General Idea: choose the platforms that were originally built for the problems you’re trying to solve.

I would be little surprised that more businesses don’t take this approach except for the fact that so many of the major tech companies have been buying up other software solutions to tack onto their original (Salesforce bought ExactTarget, Oracle bought Netsuite, Google might buy Hubspot).

There is still some legitimacy to this idea though. It’s not quite the same as taking a “best-in-class” strategy, but it’s close.

There may be a slew of CRMs out there, but that’s what Salesforce was built for, and it’s had a lot of time in the market to mature.

The same goes for Hubspot, one of the original marketing platforms geared towards small and mid-size companies (their founders came up with the term “inbound marketing”).

Trade Offs:

• Solutions typically have seasoned, thought-out, and updated functionality, but that could also mean a lot of fluff and features your business may not be ready to handle

• With time in the market has come time for prices to balloon, but you typically also have a lot of options for support

• Need lots of integrations to control data flow and reduce the swivel-chair effect, but there are also now plenty of pre-built connections available to make this process cheaper and quicker

Security First

General Idea: no matter what solutions you choose, they need to have advanced and up-to-date security capabilities

This is a strategy most-often taken by banks, legal institutions, and government agencies. If a bank’s data isn’t secure, you might as well have plopped a pile of cash down in the middle of Times Square.

There’s the old adage, though, that any system is hackable with enough time and resources.

This means a lot of money has to be spent to constantly monitor and update your systems.

Trade Offs:

• Your data is theoretically safer, but cybersecurity will often require large and specialized teams

• Added security often means a more cumbersome experience for employees (think of the 10 steps you might be taking to just log into your primary systems), but solutions are popping up that make this more automated and streamlined

• The advent of AI has come with both intelligent attacks and intelligent defenses

• Digital infrastructure that is grounded in complex security is harder to transition to newer platforms (may not have a “pro” side of this trade off; this one is just hard)

AI-Driven

General Idea: have artificial intelligence be the driving force or optimizing feature of your business stack

You knew this was coming.

It had to be mentioned at least.

I see this as a potential strategy for businesses that are marketing or customer-service heavy. It may reduce headcount, but it could also simply increase output and decrease the impact that cost centers have on the business.

Honestly, everyone pretty much already knows the trade-offs with AI, so this will be a short recap.

Trade Offs

• AI has so much potential to optimize operations and increase output, but…Skynet

• You can do a lot with the data you have, but you have to scrub and clean that data first

• More options are becoming available to address security concerns, but greater security may mean decreased utility