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Like a Weed - The Hidden Costs of IT

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How often have you ripped out a weed only to find it growing back a week later? Annoying, isn't it? As I'm sure some of you know, it's not because of any magical thing that's going on, but rather because the part we remove is only the part we see. What we don't see is really one of most important parts. This too can be said about the cost of IT.

When people think about the cost of their IT, they tend to think about only the costs they see. This would seem to be logical - how do you think about things that you don't know about? But the problem is - When people think of the cost of IT, and more specifically, reducing their cost of IT, most of the time they're thinking only of the costs they see - the cost of the hardware, the software, and the related service fees. Rarely, in my experience, do you really see clients considering all the "hidden" costs.

Some of the most obvious "hidden" costs are those associated with lost or reduced employee productivity, wasted dollars spent on poor investment decisions, unseen administrative costs, and costs resulting from poor planning. Drilling down further, a lot of these costs are caused by things like downtime (caused by insufficient budgetting for proactive maintenance), poor performing machines (reducing staff productivity), redundant work (increasing staff costs), insufficient training (reducing performance), over-extending the life span of machines (causing increased support $'s and increased replacement costs), and improper configurations (also causing increased support $'s). Some of these are soft costs (lost productivity impacting staffing costs) while some are hard costs (increased replacement costs).

Rarely do we see clients considering the long term costs of their short term decisions. It's almost always, how do we cut costs NOW! But the reality is all of these decisions go to the bottomline impact IT has on your company. And more often than not, the long term impacts are way more costly than the short term savings. If I don't stay current with patching all my machines, I can save some $'s this month (while fixing that infected workstation will cost way more next month). But again, I believe one of the key components here is how clients define the word "cost".

You can easily have a conversation with a client contemplating spending $100,000 on a new piece of machinery with a 5 year life span, but talk about replacing the $3,000 server the business completely relies upon BEFORE it crashes and it's like pulling teeth. Why is it that people are ok running computers into the ground but wouldn't think twice to do this with almost any other part of their business? Why is it so rare that a business owner strategically acts to take a proactive approach to deal with IT issues BEFORE they bring their company to a screeching halt? Again, it comes back to the definition of "cost" (ie: how business owners currently think about costs).

I believe a lot of it has to do with the oversimplification our industry (with Microsoft leading the charge) has done over the last five to ten years. Everyone still thinks these machines are like calculators or dishwashers. But the reality is, when something that could bring your whole company to a complete standstill is treated like this, these hidden costs will continue to have a bigger impact on profitability than they really should. We (as an industry) need to do a better job of helping our clients understand IT "costs" and the business impact of them.

So, before you yank that weed (ie: make a short term decision re: IT), think twice about what's going to happen when it grows back...


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About the Author
Craig Pollack
Craig Pollack Blog Profile Image Craig is the Founder & CEO of FPA Technology Services, Inc. Craig provides the strategy and direction for FPA, ensuring its clients, their business owners, and key decision makers leverage technology most effectively to achieve their business objectives. Craig focuses on ensuring that the technologies implemented by clients are "business centric" and key components of their businesses' success, and that this approach is shared by every staff member of FPA.
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