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26 | M R EP O RT FEATURE Juggling Priorities to Maximize Tech Spend How can lenders maintain the best level of IT service, integrate effectively with their partners, and innovate while also managing expenses? By George Reichert W orldwide infor- mation technolo- gy (IT) spend is expected to grow to $4.4 trillion this year, according to a 2022 report from Gartner, Inc. At the same time, many com- panies are looking for ways to effectively manage IT costs. The prioritization of tech spend, in general, is a challenge for any company. IT teams have such a wide array of competing priorities that it can feel close to impossible to manage priorities ef- fectively. These priorities include, but are not limited to, availability and performance management, ex- pense management, run-the-shop initiatives, small and medium projects, security initiatives, up- grades from legacy tech to newer, more innovative technologies, and, of course, strategic priorities. Taking into consideration that many companies are trying to do more with less, prioritization has never been more important—or more difficult. Prioritizing tech spend can be especially challenging for mort- gage lenders, as the market is cyclical and business needs are shifting all the time. Especially now, as lending has slowed and costs have increased, how can lenders maintain the best level of IT service, integrate effectively with their partners, and innovate while also managing expenses? IT Focus Areas T o know how to prioritize your tech spend, you need a clear picture of your current expenses. Most IT expenses fit under one of five categories: 1. Operations Think of this as the basic services for your IT department. Systems must be available, reliable, and perform effectively so that you can do business. The cost of IT resources, software, hardware, and maintenance continue to increase, but the need for these basic services never goes away. 2. Upgrades Many lenders and servicers are still using legacy technology in their daily processes and are working to modernize their tech- nology stack to stay competitive in today's market. Modernizing your technology stack is impera- tive in order to remain compliant, agile, and innovative. Living in both a legacy world and a modern technology world add additional costs as these technologies require vastly different skillsets. Your agility can be affected, and even smaller projects are often impacted, as technology complexity elongates timelines. While these projects may seem optional, the reality is many of them are critical to the organization's success and its ability to work efficiently. 3. Security Maintaining a strong cybersecu- rity prowess continues to become more important and requirements are more expansive. Scams and fraud attempts are more sophis- ticated—and maintaining that prowess is becoming more diffi- cult. Regulations and agreements from third parties can further raise the bar of security requirements, even beyond what the company identifies as appropriate. 4. Strategy Strategic projects focus on new technologies or processes that help grow or diversify the business. These projects can come with heavy price tags, but they are neces- sary to propel the business forward and increase its profitability. 5. Innovation At the same time, companies still need to find ways to provide innovative and differentiating products and services. Technology innovation is critical to a business's success and cannot be excluded from your IT prioritization. 6. Challenges With so many different busi- ness-critical functions to juggle, it can be difficult to determine where more resources should be dedicated and where ex- penses can be optimized. Not to mention, costs for hardware and software are steadily rising and supply-chain challenges have created lead-times for technology deliveries previously unheard of—some as long as a year. To top it all off, we are in a competitive job market where good skills are scarce and often lead to higher employee and contractor costs. The Wall Street Journal reported in April that wage inflation is pressuring some companies to increase compensation for key roles by 20% or more as they try to secure talent. With today's considerable expense pressures, companies must ask themselves: how do we