How much does IT cost?

One of my friends used to own a sandwich bar. He knew the exact profit margin on each product. He knew the impact of a price change from one supplier on each of the products he sold, as well as the overall affect on his profits.

So compare that situation with your average IT department, where to be frank, nobody has a bloody clue about costs. Yes, we all know the headline grabbers like licensing cost for Oracle and you can probably find the bit of paper that tells you the yearly hardware maintenance fee, but I’ve not encountered many companies that have a handle on the real cost of projects. If a company can’t say, “Project X cost £Y to complete and costs £Z a year to maintain and this is the breakdown of costs”, with a reasonable level of accuracy then they’ve failed.

You need this sort of data in order to make a valid judgement about new projects. When someone starts extolling the virtues of the latest and greatest database/language/framework, how can you make a judgement on the relative savings you can make if you don’t know your true costs? Free software is not free if you have to pay people to integrate it into your existing systems and hire/train staff with the relevant skills. Conversely, paying ridiculous licensing costs may not be sensible compared to hiring/training skills to allow you to use cheaper alternatives.

I sometimes feel the IT industry is like some cowboy building firm. When someone asks for a price you scratch your chin, suck in some air then pull a random figure out of the ether. Don’t even get me started on the sales people, with their astronomical list prices that nobody ever pays, just so they can make you feel like you’ve got a “good deal”. It’s an industry in dire need of a change.

[/RANT]

Cheers

Tim…

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