The main driver for business decisions should be value and this should include those related to IT services. What is the difference between value and cost? Benefits! We could represent this through a simple equation:
The benefits are very specific to each organization and that’s why a specific solution could be an excellent choice for one company and a poor one for another, even if costs are the same.
The benefits can be difficult to quantify or translate to dollars, especially if they not relate directly to an increased profit as in the case of risk reductions. An example of this could be a business continuity plan based on an enterprise backup and archive system.
Another indirect benefit is related to service level. Do your technical support is available during your operation hours? If your business is active on weekends you cannot rely on a service that provides support from Monday to Friday only.
Consider also how well your service provider understands your business, especially if you have an agreement based on a fee per hour instead of fixed amounts associated to specific outcomes. An inexpensive by the hour service with limited knowledge of your business, could turn out to be a very expensive choice.
The cost is also a quantity that is not straightforward to compute. In our experience it is common to underestimate costs by considering only direct costs or up-front investments. Recurring cost can have a considerable impact, as well as indirect cost such as energy and space requirements. The addition of all related costs over time result in the “Total Cost of Ownership” which represent the real amount of resources consumed.
The recommended way is to perform a complete and comprehensive financial exercise of Net Present Value, where a three year horizon is adequate for IT investments.
At Apex Academic Technologies we have extensive experience in value based analysis to assist your organization in taking the best informed decision, whether your next project relates to a new Student Management System, the future Mobile strategy, decide between keeping your Data-Centre on premises or moving to a Cloud based infrastructure or implementing a Bring Your Own Device (BYOD) approach throughout your office.
Francisco Disilvestro
Director
apextek.com.au
[email protected]
(03) 8692 0004
