Question 1

Q: What is strategic cost management and its objectives?

Accepted Answer

A: While strategic cost management is a planning aspect for any type of business, it is an integral part of 
     Managed IT Services – much more so than with garden variety, Time & Materials, or ‘Break & Fix” 
     (B&F) IT services, who typically take no part in addressing their clients’ long term planning and goals:
     They just show up when something on the network breaks, and they fix it. If you poll any reputable
     company in the IT Services Los Angeles Community, they should be familiar with their own strategic
     Management plans, but those of their IT services clients as well.
 
     In general, over all industries and types of costs involved, strategic cost management simply indicates
     the process by which costs are lowered and the company’s strategic position in the industry is
     elevated. The strategy is in knowing when and where to cut costs in a ‘healthy’ business without 
     affecting the upward mobility of the enterprise. We say ‘healthy’ because if a company is in trouble,
     on the brink of going under, drastic and damaging ‘Hail Mary’ cuts may be implemented in order to
     forestall the inevitable collapse while top management prays for a miracle.

Smart cost-cutting will almost never include strategically important areas of the company: 
     Production, Supply Chain, Product delivery, Sales, and especially not in IT Support whether in-house 
     or outsourced. Emerging technologies allow trimming without repercussion – usually of the 
     workforce. For example, with the advent of QuickBooks, many Small and Mid-size Businesses (SMBs)
     could trim their accounting department, sometimes in half.

Many companies are finding that product delivery through drones and unmanned vehicles save a
     lot of money over the salaries and benefits packages of a human delivery force. AI (Artificial
     Intelligence) is paving the way for massive overhauls in strategic cost planning.

While there are AI tools available to allow IT Support and Services providers, to relinquish small,
     repetitive tasks to automatic programs, IT Support LA strongly believes that when clients call our
     IT Help Desk, they speak to familiar voices who are local to them – this is not the area to
     trim costs by replacing human voices with computer voices. So far, we have not seen any member of
     the IT Support Los Angeles Community who has made these drastic changes, although we would
     certainly be happy to take on their Managed IT services clients as they jump ship in droves.

Question 2

Q: What is strategic management and its importance?

Accepted Answer

A: This is the all-encompassing valuation of strategies in every area that ensures that company targets 
     are not only met but growing. Strategic Management considers the best direction to give each
     department to achieve the company goals and allots the resources to accomplish them.

Peter Drucker is credited with creating the formula that business uses today, with his development 
     of Management by Objectives (MBO) in his 1954 book ‘The Practice of Management’. Every aspect
     of virtually every business on the planet is ruled by his simple adage: “The purpose of business is to
     create and keep a customer.” Seems like a no-brainer, but how many companies infuriate you?

The key components of MBO are the establishment of a company’s Mission Statement, the inclusion 
     and education of the company Mission to employees, encouraging input from employees, monitoring
     the progress of the workforce in satisfying and furthering the Mission objectives, and to implement   
     an ongoing evaluation and rewards system for employees.

Prior to MBO, the preponderance of American business was top-centered, which it primarily still is,
     but rather than the strict ‘overlords and peasants’ thinking, it has been proven that more inclusion
     and input empowers employees to feel more a part of the Company Mission, rather than just 
     cog in the great wheel. The principles of MBO impact every type of industry, from farming to 
     Managed IT Services – even the Break & Fix style of IT consulting services.

Question 3

Q: Why is it important to study strategic management?

Accepted Answer

A: If your business were a house, studying strategic management makes the difference between 
     throwing together a shack made of plywood, or drawing up plans from foundation to rooftop for
     an enduring home that will safely house your growing family for generations. There may be instances
     of people who have ‘stumbled’ into success, but by and large, stories like that lie in the province of
     Hollywood fantasy. Hard work, innovation and strategic planning are the building blocks of success.

Do you want to build a business that will last? Are you willing to take the steps necessary to ensure
     its longevity? Do you know what those steps are? If you don’t, then you had better find out or you 
     will learn that survival of the fittest applies to business, not just the wilderness - because it really is
     ‘a Jungle out there.’

Question 4

Q: How does strategic management help a company achieve its goals?

Accepted Answer

A: In the simplest terms, strategic management allows a measure of proactive control over the future of
     your business, rather than a reactive stance – trying to field whatever fate throws at you. Identifying 
     your goals and the steps necessary to achieve them give you an edge against the uncertainty of the 
     future. It’s a form of ‘Situational Awareness’ for business.

For IT Support LA, our forward-thinking, proactive philosophy was very recently rewarded. The
     massive REvil Ransomware attack the first week of July 2021 infected Kaseya, which provides
     IT Support Management software. Kaseya offers two models for its product: The more expensive 
     version resides safely in the cloud, and a less expensive version is tied to physical, local networks 
     which is vulnerable to hackers. With an eye towards the ultimate protection we offer our clients,
     we opted for the more expensive, more secure option, and we were not touched by the attack. Our
     less forward-thinking fellow Managed Services Providers were not so ‘lucky’, as if luck had anything
     to do with it.

If a business is like a house, think back to the Tale of The Three Little Pigs: Everyone remembers how 
     easy it was for the Big Bad Wolf to huff and puff and blow down the houses made of sticks or straw.

We built our house out of bricks.

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