Everybody in IT knows that most of the IT budget is spent on “keeping the lights on”. This is seen as “not good” because, according to some, IT should spend more money on innovation, adding business value etc. Spending 60-80% on keeping the lights on is equivalent to “wasting money”. And somehow, nobody ever seems to question statements like this. Well, I do…
Please look back 24 months. We hardly caught our breath after crisis # 1 when crisis # 2 hit us. Frozen budgets for up to 3 years in some cases, but budget was invested in innovation because of projects using Cloud and Virtualization. However, because budgets remained flat, the money had to come from savings elsewhere, so we cut some staff, we delayed the acquisition of new hardware, we didn’t not upgrade some software and all was well. After almost 15 years of continuous growth, we suddenly felt that we actually COULD do the same with less. We thought…..
But did we actually do a proper risk-assessment when we made those decisions? What we did not realize is that we are more dependent on IT than ever, and that it would take some time for things to take effect. And a well managed system doesn’t turn into a “sub-optimal” managed system overnight…… Some 8 months into crisis #2, we see the effects of NOT spending enough money on “maintaining the current state”. Maybe its anecdotal evidence, but I see more systems failures than I have seen in a long time. I personally experienced the unavailability of Internet Banking systems, Airline booking systems, travel websites and others and I read about many more in the trade magazines and online publications or newsletters.
Let me first say that I too know that we sometimes spent money on the wrong things in the past. Many projects to make IT better exceeded budget, many hobby projects were too expensive and things could have done smarter. But simply making a sweeping statement that spending 50% of the IT budget on maintaining and optimizing the IT Infrastructure (which happens to be the backbone of the company) is the wrong way to spend the IT budget is naive and misguided. To make the comparison, a production company doesn’t spend 60-70% of the production budget on innovation; they spend most of the money on keeping machines running that make the goods that generate revenue.
Am I comparing apples and pears? I do not think so. All I DO know is that in the past few years, selling software that simply helped to optimize the existing IT Infrastructure was sometimes seen as a sub-optimal investment. Here is a surprise, it’s not. How much does it cost a financial institution when their Internet Banking goes down for several days and how does this compare with the savings that created the unstable IT Infrastructure that caused this? Spending money to make the existing IT Infrastructure more reliable is well worth it.
Please leave a comment, I am curious to hear your opinion.