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Cheap IT Will Cost You

Usually technology costs are framed in terms of savings and efficiency. Seldom will you hear a professional or business sponsor declare, “Under-invest in IT!” Jonathan Feldman explains for InformationWeek why the “thrift logic” behind IT spending is not just unwise, it’s often downright expensive:

The truly uncomfortable truth is this: Spending too little on IT in the digital age is ineffective, maybe borderline irresponsible.

Food for Thought

Like most IT-driven organizations, the New Zealand company Foodstuffs was embarking on a complete makeover of its entire product line (embedding everything with digital components) whilst trying to get away with a scandalously cheap IT foundation. The result – Foodstuffs ended up having to fix that foundation with 130 full time staff and an additional $150 million.

Although the company found that it could save money by replacing custom code with standard software, the bulk of extra costs were related to upgrading hard infrastructure – adding data centers and replacing the old network as well as platforms, storage, and the database system. Business processes too had to be adjusted to align with new IT realities.

3 Hard Truths about Cheap IT

The hard truth is that business leaders are constantly being challenged to justify funding, and if IT is too remote from their daily transactions to seem important, they won’t shell out the cash. It’s practically a built-in reaction, an instinct even, which is why IT leaders need to focus on “winning hearts and minds.” Another unfortunate truth is that business leaders often view IT (and technology in general) as a sort of ‘miracle box’ where problems go in and solutions emerge. But within the confines of that box are developers and other IT pros working themselves to death without proper finances to support their efforts. And third, there’s an expectedly high tolerance for IT risk from a business cast who feel that systems outages and major IT failures “…do not apply to our company” – until their servers go down at a crucial moment.

Bursting Expectation Bubbles

Not much can be done about human psychology in the third case, but the first two points about IT being remote from the business and having wishful thinking about technology are definitely fixable. As an IT leader, it’s important to build credibility and reach out to your business counterparts, as well as to reveal (when necessary) the ‘tough’ and ‘dirty’ side of IT, effectively bursting those magical expectation bubbles that tend to float around during budget meetings.

Read the original article at: http://www.informationweek.com/strategic-cio/it-strategy/cheap-it-will-cost-you/a/d-id/1321314

About Eric Anderson

Eric Anderson is a staff writer for CAI's Accelerating IT Success. He is an intern at Computer Aid Inc., pursuing his master's degree in communications at Penn State University.

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