IT infrastructure is a key element of any modern business no matter its size or maturity level—the software, hardware, and network components that enable a company to develop products and services that meet customers’ needs, enable employees and partners to work together, and manage core business operations.
CIOs know that digital investments are critical for success. In the Gartner CIO agenda, 45% of respondents say the greatest benefit of investing in IT is on improving the customer experience, with 53% reporting that improved operational excellence has an impact on the bottom line.
Startup companies are no different from established entities in this regard. Companies in the early stages of developing their product or service require foundational IT to operate efficiently and may need a robust IT ecosystem for delivering digital products to their customers. And, as with any company, as the business grows, the IT needs change. How does a company transform its IT infrastructure from start-up mode to enterprise level?
With the focus on innovation and product delivery, startups are not known for over-investing in IT from the beginning and they typically can get along with a single IT person. This is usually sufficient to serve the needs of the company as is, but is not designed or resourced to be a future-proof or truly scalable service. As long as the network is working and the product team is connected and able to operate, the state of IT is rarely top of mind when doing research, designing a prototype, developing the go-to market strategy, and courting venture capital funding.
Scaling the IT ecosystem
An IT setup that served a startup well can quickly show its limitations with the addition of significant numbers of new employees and / or the success of the core product or service. There comes a point in the life of a startup when senior management is looking down the road to future operations, next-generation product development, and evolving customer needs and they realize the existing IT will not be able to scale to meet those future needs.
This often happens once a startup is successful and receives funding in later rounds of investment. With the influx of new funding and the accompanying increase in attention to the product or service, more stakeholders mean a closer analysis of business elements including operations, finances, IT infrastructure, and cybersecurity.
The IT person or team is on the front line and may identify infrastructure challenges as the company grows, to help the management team recognize the need to update and transform the infrastructure. Often times we see the person in the IT role involved in the daily operations and maintenance, but may not have the capacity or focus on strategic planning. Transitioning to an enterprise-level IT system involves not only implementing new systems and equipment but also adapting to a new culture and mindset about IT and its importance to the company. Making the move also requires significant resources and vendor relationships that are beyond the current capabilities of the IT team.
In addition to improved workflow and connectivity, the main benefit that startups can realize by scaling the IT infrastructure, from building a powerful new network to taking advantage of cloud services and vendors, is reduced costs.
Senior management may be hesitant to invest in new IT equipment due to cost concerns, but IT transformation can often be more cost-effective in the long run. It is possible to obtain a significant amount of technology that is integrated and aligned to work together without a large financial investment. The equipment itself may be more affordable and have greater power and storage capacity, and the transformation process may also allow for the negotiation of lower rates with service providers.
Because IT so complex, no one person can have comprehensive knowledge of all aspects of IT. It is the role of management to understand what their IT team may not know, and look at what the organization needs, what it has outgrown, and where it is heading. And they are always asking questions, like:
- Do we have the right tools now? Will they still be good in two years? If not, what tools do we need to invest in?
- Are we profitable and what do we need to get us there?
- Can we extract insights from the data we are collecting?
- Are we satisfying customer needs? And doing so efficiently and cost-effectively?
Peace of mind
Startup senior management is often nervous about making investments in IT and in transforming the current way of working—it can be costly and introduce new risks. Or the transition is forced on them by circumstances, such as a new investor or acquisition possibility or a move to take the company public. In these cases it is necessary to have a network and infrastructure that will take the company to the next level, to have clear documentation for the due diligence process, and to meet new expectations about reporting and financials.
Transforming from a startup to an enterprise company is not for the faint of heart. It is for businesses that are ready to invest in the IT needed to bring value and drive future success. And for most startups, it is hard to make that change on their own.
This is where partnering with a team like UPSTACK can help. Our advisory partners work with companies to identify what is needed for a smooth transformation of IT infrastructure and then make it happen. And we are partners for the long haul—through turnover of IT personnel and management changes, so the hard-earned knowledge about your mission critical IT doesn’t walk out the door.
Get in touch today and learn how we can help you go from startup to enterprise as seamlessly as possible.