IT-related expenditures worth cost in long run

Ever since computers were put into widespread use, many businesses and government agencies have put IT-related costs high on the list when looking to cut costs. This has been true whether the economy is booming or in recession. The fact of the matter, however, is that IT is the last area that should be cut and carefully thought-out expenditures will pay off.

We are not self-servingly suggesting that organizations go out willy-nilly and drop loads of cash on fancy gear. Upgrades, maintenance, and regular hardware and software acquisitions are, however, an important part of any business strategy.

Take for example, hardware maintenance. Like software, a typical hardware maintenance package will run about 18 percent to 22 percent of the original acquisition cost, annually. What does this buy you? Generally speaking, a hardware maintenance agreement allows you to replace any faulty component, along with technical support should you encounter any issues.

What is the cost to your organization if your hardware fails and is down for a day? As we all know, replacement parts can be hard to come by out here in the middle of the sea, so what is the cost if you are down for multiple days? For most organizations, the true cost of multiple days of down time is much greater than the cost of a maintenance contract, especially considering that, unlike the tangible cost of a maintenance contract, down time also has intangible costs that can be tremendous.

Software maintenance typically buys you the right to future upgrades, which include bug fixes, as well as technical support. Your software will remain current and much easier to maintain. Falling behind can have negative effects, such as incompatibility with new hardware or operating systems, which might preclude you from taking advantage of newer, more advanced technologies.

What about the initial acquisition? Too many times we’ve heard stories of organizations buying hardware or software "on the cheap" and then spending countless hours to make it right. This is usually most prevalent when buying off-brand hardware, such as so-called "white-box" PCs, and then having a technician spend hours and hours to ensure compatibility of the PCs with data and/or storage networks.

Why do organizations adapt such an approach? Typically, it’s because of a lack of understanding of the true costs of doing something the right way. While we understand that economic conditions are certainly tough, IT-related costs have been targeted in boom times as well as bust. Maintenance and reliable gear should not be options, they should be required for critical components. Such costs should be identified and budgeted appropriately.