Our current economic climate has made total cost of ownership and in-depth IT financial analyses a top trend. Executives are looking at return on investments across their organization, but demanding it in IT because it is one of the few places within a knowledge-based organization where you can achieve real financial gain. The problem? Many times essential IT costs are forgotten in the initial calculations. In fact, Gartner, Inc. reports that 80% of total IT costs occur after the initial purchase or project implementation. Below are the top forgotten IT costs you need to look out for when constructing your IT budget.

  • The “Not Your Expertise” Cost: Soft costs, or costs not readily apparent at the outset of an investment, are common in IT.  The soft cost we are referring to here is the time and energy it takes your organization to not only build, but to also maintain, a tech-based infrastructure—and continue to stay abreast of current trends that might affect it. If anyone is involved in worrying about this besides your IT staff or external providers, this is a significant corporate drain. You and the other executives in your organization simply need IT to work to support your core business, whether that includes providing legal services, accounting services, or selling widgets. Spending time and energy worrying about how your infrastructure does this is counterproductive—and costs you money.
  • The Trickle-down Backup and Disaster Recovery Cost: When you invest in additional storage for your servers, you must look beyond the price tag associated with gigabytes or hard drives. Every time you pay for additional storage, you are also paying for the offsite backup of that storage and the management of that data. It is the trickle-down costs of backup and disaster recovery systems that often take clients by surprise.
  • The Learning Curve Cost: When introducing new technology, most companies factor in the costs of training their user communities—whether this means prior to go-live, beyond the go-live date, ongoing video tutorials, or a combination. What is often overlooked, however, is the cost of decreased productivity. Your employees will need time to get up-to-speed on the new technologies and, while they are doing this, there will be a significant drop in productivity that will cost your organization money.
  • The Additional Support Cost: When you implement any technology change that impacts the entire company—like Bring Your Own Device (BYOD)—you incur hidden support costs. When you allow your hardware and software platforms to diverge, you lose uniformity and the option for your employees to simply turn to their neighbor and say “Hey, do you remember how to do this in Outlook?” This might not seem like a big deal, but in removing the ability for your employees to answer each other’s’ questions, you increase the reliance on your internal or external IT support team. Not only does this add to your IT support costs, but you will also feel a cost caused by the decrease in productivity.

Last Word

IT budgeting isn’t easy—even with the most detailed due diligence, there will always be some unknowns. Get your IT provider involved in the process so you don’t get stuck with project-specific sticker shock, and plan for a miscellaneous line item for the unavoidable, unanticipated expenses. Above all, be aware of these forgotten costs; understanding and planning for them can help you reduce unnecessary expenditures and reallocate resources to more important business functions.

Small Cheetah

Optimal’s e-newsletter articles contain original content by Heinan Landa.  Permission is granted to copy this article as long as the following information is included: Heinan Landa is CEO of Optimal Networks, an IT support, management, and consulting company that helps technology drive clients’ business goals.  For more information, visit www.optimalnetworks.com or call 240-499-7900.