Value vs Expense
Sometimes, the raw numbers don’t really tell us how expensive something is.
One of the regular struggles we have in IT is that we are an expense. The bottom line is that, for most businesses, we don’t generate revenue and are strictly a cost center. And, unfortunately, in my experience, because we’re a cost center, spending on technology is resented almost as much as paying the electric bill or paying taxes; a necessary evil. What gets lost, I think, is the value provided by technology. To start with, much like electricity, business generally doesn’t work at all without IT. Technology runs the point-of-sale systems and the Accounting systems that even make it possible to collect and track money. Without it, business would simply halt. But, beyond that, the cost of the actual technology often overshadows the value provided.
Not too long ago, I had this same argument with a fellow IT professional who was mired in the numbers. To their credit, they were examining a potential equipment purchase from a strictly financial point of view. Since the Accounting Department or CFO are often the final decision-makers on technology purchases, seeing this process through their eyes can be beneficial. The problem is that the full potential value of upgraded equipment can easily be forgotten in the drive to spend the absolute least dollar amount possible. Don’t get me wrong! Technology costs absolutely have to be kept under control or IT people will focus only on getting the newest toys to play without considering the cost to the organization. But, the actual spending has to be appropriately balanced with the value provided by the purchase. As technology professionals, it’s part of our job to present not only the minimum and best options available, but what advantages there may be to making a particular purchase. Sometimes, the value of upgraded technology goes well beyond the dollar value.
Take, for instance, the opportunity to upgrade from a standard two server, one storage area network system, that was new technology fifteen years ago, to a hyperconverged system that spreads computing and storage capacity across four servers or hosts. It’s absolutely valid to look at the raw cost of the two solutions. And, you will absolutely see that buying two classic servers is less expensive than buying four modern hyperconverged nodes. But, if you stop there, you don’t see the added value of less downtime due to a hardware outage that can be avoided by upgrading to a newer, redundant technology. Or, the increased speed and efficiency gained by upgrading to a modern system purpose-built to run in a cutting-edge datacenter. Maybe there will be more opportunity to add capacity to the new system as the company grows. Or maybe there are business continuity advantages to a hyperconverged system beyond additional, redundant hardware. Though, to be honest, I think that’s reason enough!
Regardless, my point is that as technology professionals, we need to clearly communicate all the risks and benefits, expenses and added values, of our purchases. As subject matter experts, it’s in everyone’s best interests for us to educate decision-makers beyond the dollars-and-cents bottom line, to give them a true understanding of the value to be gained beyond the simple expense of a purchase.
This post originally appeared on my LinkedIn profile.
