An Intro to Fiscal Responsibility -- IT-Style!

2 minute read
Eric Anderson avatar
IT budgets, almost without exception, are among the primary fiscal drains on almost any company’s annual budget.There are few budget categories that can have the dramatic, direct impact on fiscal and operational performance that IT can.Because of this, Return on Investment (ROI) and Total Cost of Ownership (TCO) have become unlikely household terms in the annals of IT.

To spend or not to spend

One of the first things that needs to be considered before any ROI or TCO analysis takes place is whether or not it’s necessary to spend the money. If you’re not hitting the functional ceiling of your current infrastructure, why spend a large amount of money to upgrade?There are a couple of reasons to upgrade, even in the absence of gains in operational efficiency:* "End of Life," or when the software vendor discontinues support for your specific product or product family. * Security infrastructure upgrades, to help provide improved protection for customer and corporate information assets.Those reasons aside, why spend money that won’t directly translate into an improved operation? With few exceptions, the answer is that you don’t. For starters, “Technology for technology’s sake” just doesn’t make good business sense; it provides an initiative without a simple, identifiable, execution driven purpose. Throwing resources at initiatives that do not have a clear purpose is generally going to receive a lukewarm response from the departments charged with implementation. And if you don’t have a commitment from your implementation team … I think that we’ve all seen how that comes out. On the bright side, if your organization is disciplined enough not to throw a bunch of resources at tasks and initiatives that will never come to fruit, you should have the resources that you need for the initiatives that must yield success.So, I guess that the moral of the story, as far as I’m concerned, is to make sure that you can see operational value in the project to be completed. If analyzing your business process can help you identify potentially cumbersome processes, make it so. Each second matters, when you consider that a single McDonald’s restaurant drive-thru can now handle 260 cars an hour. Is it necessary to use a call center for the person on the other end of the speaker? Probably not -- but even then, it’s pretty hard to argue with the operational impact.