Gaining ground in your organization's business as a technical professional: Two Essential Tips

Below are two tips that I think will give you opportunities to become more commercially aware of your organization's business. Try them out.

1) See yourself as the managing director of your personal business, even if you're an employee. Ask yourself if your customers (mostly colleagues) would buy your services and trust your company and brand? Do you add value to their business, and is it cost-effective (taking your salary and package as the cost)? Will you get orders for more valuable and important services in the future? By thinking you're a business, you will be forced to consider the whole transaction of your work against your expense. The financial package you take, and the overhead your customer incurs in using your services (i.e. your managers time, your desk, your PC, insurance, restaurant subsidies, etc.) must be outweighed by the value you bring. If you want a promotion or a higher salary, your track record as a supplier must prove you can take on the extra work to make it worth it for your customer. Have you acquired new skills that can be applied to add more value? AS MD of your business that offers technical services, are you in competetion with other providers? Consider if your service is unique or whether you are the supplier of choice. Ask yourself if the technical skills and knowledge you hold is well packaged and can be bought and sold in your organization's marketplace easily.

2) Understand the wider business context than your own department. As a commercial agent, you should understand how the service your department provides fits within the whole value-chain (i.e. how your organization provides its product or service from start to end). The cost and benefit of your department's services affects the cost and benefit of the entire product or service, as consumed by your organization's customers. You can do this by taking some advice from a previous post (Understanding commercials through the budgeting process) where I described how learning how budgeting works in your organization. You don't need to know everything, just the basics. In addition, talking to colleagues in other departments that your department interacts with. For example, if you are a software developer, you should understand how the software testing function operates, and if you are an Application Support Engineer, speak to the the end users about how they report problems and receive fixes. You should find out how delays in providing your service, for example, creates downstream problems for your colleagues and the eventual customer, or how improving quality in your department has a positive effect on the product or service. Ultimately, the service you provide is part of a much larger machine, and the efficiency and effectiveness of the business machine is as strong as its weakest point. By understanding and applying your awareness of this, you will grasp where you fit into the value-chain.

Finally, if you've had a go at the above, consider taking a few observations forward as ideas for improvement, and speak to your manager or an executive. Sharing your thoughts will give you an opportunity to get feedback on them.

The gap might not be so big between business and IT after all...

Take a moment to read this article in this month's Information Age (in fact I strongly recommend you subscribe to this magazine). The article discusses research conducted by the magazine and a software vendor which assesses the gap between senior IT executives and business executives, in terms of their opinion of critical business issues.

One conclusion is that senior IT executives are worrying about the same issues as business executives.

http://www.information-age.com/report/2007/agileit/overview

Understanding commercials through the budgeting process

Almost every business manages a budget. That is, a prediction of expected costs against actual costs. It's a way that a business stops spending too much or too little, and is, in essence, a plan of expenditure.

Knowing how businesses manage expense is a powerful way of understanding how businesses work. Do you know your accruals from your ammortization? If not, read on.

I'm not going to give you a full-blown description of budgets and how they're managed, but I do hope to encourage you to find out. In doing so, you'll become more familiar with how your organization makes decisions on what to invest in and what creates value. When I was first charged with a multi-million budget, I knew that decisions I make can seriously affect the outcome of the business.

So what would one do to learn about budgeting? Well one way is to pick up a textbook (such as this one) and read all about it. This way you will understand the terminology and basics. Another complementary way is to get involved. You could ask your department manager to show you the process as it's happening. Some of the detail may be confidential, but ask to see what can be shared. It's also true that most organizations have developed their own style and process, which can't be learnt from a text book. Don't be afraid to ask, as your department manager may find you have a valuable contribution to make. You could also start with an idea on how to save costs, and see how your thoughts can be worked through the process - that way you can see how your idea might be quantified in hard monetary terms.

To summarise, to understand how a business ticks is to understand how it makes profit by earning revenue and budgeting. Most of the important decisions are part of the budget. Giving yourself the knowledge of the process will give you opportunities to influence these decisions, or at the very least accept them!