How much is your old technology costing you?

By: Marco
May 27, 2016

A report released this week revealed that the U.S. government is spending about three quarters of its technology budget maintaining aging computer systems. In some cases, the platforms are more than 50 years old. This covers everything from Social Security and Medicare to the Treasury and Transportation Department’s Hazardous Materials Information System.

Marco2013_1_006-1.jpgThis raises the question: How much is your old technology costing you?

It’s common for organizations to have new smartphones and even laptops while traditional phone systems, servers and even printers age. If it is not broken, don’t fix it, right?

I get it and appreciate the older things in life, too. I enjoy classic cars, but you won’t see me driving them to work every day or on a long family trip.

It doesn’t make sense economically. Fuel efficiency has significantly improved and that has a direct impact on what it costs to operate the vehicle. In addition, although the cool factor is high with classic cars, the safety features and amenities (like air conditioning) of newer vehicles far exceed the older models.

The same is true with technology.

So how do you know if your old technology is weighing you down? Here are three key elements to consider:

  1. Downtime
    One of the first indicators that your technology – or even service provider – is costing your organization is downtime. Today it’s become more common to find Service Level Agreements with 99.9 percent uptime because of the desire – and often need – for reliability. 

    Unexpected downtime costs organizations significant dollars and can even cripple an entity altogether. The widely shared average cost of unplanned network downtime is $5,600 a minute or $300,000 per hour. But this varies significantly organization to organization. 

    Business disruption is a real cost. Do you know what it is for your organization? Take the time to calculate the cost of downtime per minute and determine how long is too long for your organization. Then, assess your systems, service provider and business continuity plans accordingly.
  1. Support & Maintenance
    This is often the most overlooked area, but the one that will drain – and even deplete – an organization’s budget in even a year. Maintenance and support costs are why Microsoft has ended support for older versions of its software.

    Ten years ago, the average maintenance costs accounted for $6 out of $10 spent on technology. However, that’s changing. The rapid pace of technology is reducing the life cycle and now it can be more economical to replace hardware and software than maintain them.

    Gartner Inc. reported that organizations can reduce their software support and maintenance costs by up to 50 percent by taking a closer look. Assess the time and attention you’re giving to keep your technology running. While this can be challenging to pinpoint, focus on a snapshot in time. Consider asking your employees to track downtime and time spent helping their coworkers for one month – or even one week – to get a better pulse on the costs.
  1. Slow Performance
    This is the hidden cost. As a laptop or other piece of hardware ages, its pace and capabilities slow. The costs can quickly stack up in the extra time it takes to do a task. Multiply that by employees who need instant access to information and the ability to collaborate today. One person’s slow down can affect a team of people – inside and outside of your organization.

    Newer technology typically provides increased speed and performance and in virtually every industry, time is money – or at minimum better service.

Managing Costs

Gartner reports that up to 80 percent of IT costs occur after the initial purchase. Understanding and better managing these costs for your organization can have a significant impact on your technology budget and bottom line.

The advent of managed services and cloud computing make it easier for organizations to get the technology and support they need and keep it updated – at a manageable cost. Both turn a traditional capital expense into a monthly operating cost to make the switch easier.

While the cloud certainly has its benefits, it’s not a silver bullet that eliminates all challenges with downtime, support, maintenance and performance. Take the time to evaluate what the move will mean for your organization and who’s the best provider to help you through the process to ensure you get the results you desire.

 

Learn More About A Technology Assessment Contact a Marco Rep

Topics: Cloud Services