Boiled Frog Effect

When frog is placed into warm it will jump out. If it is placed in cold water and its temperature steadily and progressively heated it will not jump out because it does not feel danger. It will be boiled.

IT Investement Cut

Do your Information Systems suffer from same effect in global crises, lack of investments during longer period of time? After a while reporting system will collapse like poor frog.

Why is this important to mention? In financial crises, sometimes seems logical to cut significantly IT budget. Companies cut costs and for this

reason establish new cost cut processes and bodies. Try to ask capital investment for major upgrade of core Information Systems from Zero Budget Body, established due to income decrease, and you’ll get expected answer. “Nomen Omen”, old Romans would say, meaning name determines destiny. What a scary name of body from whom should be asked IT investment budget…

Well, if reporting is not important then it is more than justified to cut „unnecessary“ investment.

Reduction is reasonable and needs to be taken, but significant reduction of IT budget with temporary stop of any kind of Information Systems development… well this is something completely different.

Company in crises will press marketing and sales units for more efforts. Only way to involve more efforts can be in launching new products, services, new sales channels, new something. If it is new for market it is also new for Information Systems and their information relationships and streams. From where will analysis and decision for new product get necessary data? From old systems without investment. That is plausible. Decisions do not need information form Information Systems at first. Spreadsheet projections and models are more than enough to prepare information basis for decision.

So, where is the problem?

In big companies, there are many information systems and there are army of market, sales and financial analytics. Until short period of time they will generate congestion with spreadsheet models that need fine tuning and versioning of simulations. Well, this is the point where lack of investment in IT technology shows its ugly face. This is the point where reporting system implodes, sorry, is being boiled. This is the point where investement in Management Information System or standard Business Intelligence solutions would power intense analytical work.