By: Joanna Young (@JCYCIO)
“Price is what you pay. Value is what you get.” Warren Buffett
I’m often asked how companies can save money in their IT budget. Often that question is a lagging indicator of poor value (perceived or actual) realized from technology. Typically, whether $1.00 or $1 million was spent, if the product contributed to business goals, was easy to use and performed well, the cost isn’t questioned. If the product broke frequently, performed at molasses speed and ergo inhibited progress, then it was too expensive.
- The price tag is not the total cost. I’ve seen companies pay $80K for products that end up costing $2.5 million. Know what it’s going to take, all in, not only to implement but to maintain. Only then can you estimate value.
- Focus on alignment, effectiveness and quality, then efficiency. Which business strategy will it support, and how? How will the desired results be realized? Will it integrate with other technology? Is the product usable? Is the vendor viable? These are more important questions than “how much is it?”
- Open source is free like a puppy. In other words, it’s not free. All solutions need to run in an environment, be managed and maintained by trained professionals, and might require third party services. All those things cost money.
- DIY is free like a litter of puppies and a baby elephant. Think long and hard before building something yourself if there are viable products in the market. See #3 plus factor in that DIY creates special snowflakes that need to work in an ever-changing technology system. DIY is the ultimate and most costly customization (see also #5).
- Customization = cost inflation. Once a product is altered, then every upgrade, every integration from then on requires extra work in development and testing. This will inflate costs faster than Venezuelan currency. Every customization should be questioned as to its necessity to achieve business goals.
“Many receive advice; only the wise profit from it.” Harper Lee