FINANCIAL JENGA: HOW TO GET IT COSTS UNDER CONTROL DURING TIMES OF GROWTH

July 1, 2015 – As the IT leader of your business, you’re intimate with the details of IT expenditures, and your budget matches accordingly (in our perfect world, right?). While a built in buffer for managing growth is ideal, it’s much more common for companies to cut their IT expenditures very close. There’s near constant pressure to only spend what’s required, allowing those desired “growth buffer” funds to be invested in other places. Financially speaking, all companies function like a meticulous game of Jenga – take this block from here to prop up another block over there. While your CFO is managing the “blocks”, it’s IT’s job to keep the whole tower from falling over. Especially when you’re building the tower even higher.

So what are all the “blocks” that you, as the IT leader, are responsible for during times of business growth? While it may seem straightforward to the rest of the C-Suite – a line item to address – the costs for IT can be layered and interconnected.

Onboarding a New User:

If you include all the soft costs (see “Other” below), adding just one new employee can cost as much as $3500. This includes the purchase of a new computer system, imaging, and the setup of both physical and virtual work space.

Hardware & Software Investments:

When you tally up a new computer system, printer, phone system, new wiring (especially expensive in a brand new facility), back end storage servers, new software applications, permissions, support fees, etc., plus the actual physical work space (not an IT cost, but IT needs somewhere to get set up), the cost for hardware and software investments quickly add up.

Expanding Capacity:

Capacity upgrades are not bought in small increments. So, even if you’re only onboarding a handful of new users, you’re required to buy SAN space in bulk – 100 new users at a time – costing as much as $250,000. Additional network capacity is purchased on a monthly basis and can cost as much as an additional $3000, per location. If you’re expanding multiple locations, you’re looking at many thousands of dollars added to your monthly budget.

Other: (AKA the soft costs that don’t find their way onto a line item)

  • Productivity delays for the IT department and slow time to start for new employees, because without built in growth preparation, all of the above expansions takes time
  • Backup costs as you add new employees
  • Training costs to familiarize new employees with your IT applications
  • Support costs – especially the newbies who still have to learn the IT ropes and need a little more hand holding
  • And hidden costs – such as a missed licensing requirement that could get turned into the The Software Alliance (BSA piracy association) by a disgruntled employee (or former employee) exposing your organization to major fines

Managing growth doesn’t have to be such a drain – to your budget, your operational ease, or your strategic input towards these same growth objectives. Developing a roadmap to Cloud technology (whether it’s a Private Cloud, Public Cloud or Hybrid Cloud) allows for an almost infinitely expandable environment, with built-in megastores of infrastructure to handle all your growth needs on an as-needed basis. And instead of 10 days to start, you’re look at more like 24 hours to get a new employee up and running. Everything is already built in.

Jenga: it’s great played over a couple beers with good friends. It’s fun when a tumbling pile of blocks is funny, instead of terrifying. As the IT leader of your company, you’re responsible for keeping the proverbial “lights on”, which means that when you’re company is growing, you’re expected to make sure that growth can occur, smoothly and without delay. Moving to the cloud can provide built-in support beams to your own Jenga tower. Build it up as high as you want. The sky’s the limit.

2017-07-27T00:01:00+00:00 July 1st, 2015|News|

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