Opinion by Bart Perkins

IT funding potholes

Don’t keep making the same mistakes year after year

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Organizations should know how to budget and pay for IT products and services — they’ve been doing so for more than 50 years. This is not rocket science. Unfortunately, many organizations continue to make the same mistakes year after year.

Don’t fall into these common funding potholes:

  • Refusing to pay a fair price. Some organizations are too cheap for their own good; they always take the low bid, even when it’s so low that the bidder will struggle to deliver the promised services. While it often makes sense to accept the lowest price when purchasing paper, ink and other commodities, it rarely makes sense to nickel-and-dime the vendor that is implementing a critical new system. In most cases, the cost of a delay or downtime is larger than the amount saved by squeezing the vendor.

Pay a fair price for important IT products and services. Suppliers that offer superior service at a fair price, but not the lowest price, often offer a better value than suppliers that provide marginal service at the lower price.

  • Failing to plan for ongoing operating and support costs. The IT total cost of ownership model has been used for decades. IT leaders understand that there will be a cost to operate and support any new system or service. Despite our fervent desire, there is no such thing as a free lunch. Nevertheless, a significant number of organizations assume that new systems have no ongoing costs. They reason that unused capacity in an existing server and people who are already on staff are “free.” Inevitably, they are surprised, and sometimes angered, when additional servers or staff are needed.

Don’t pretend that ongoing costs don’t exist or will be covered elsewhere. While ongoing costs may mean that a proposed new investment does not make sense, don’t delude yourself and your organization by ignoring them. When the costs have to be paid, you will be in for a nasty surprise.

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