Processor.com - Common Spending Pitfalls


(17-Jun-11) The economy may be improving, but enterprises must remain vigilant against over-spending.  This is particularly true in data centers, where the pace of change and reliance on products and services with constantly changing price tags can lead to inadvertent waste.  We spoke with leading industry analysts to identify today’s biggest spending traps and how IT Managers can avoid falling in.

Trust But Verify

Spending begins with expectations, and expectations are often heavily influenced by marketing and ROI calculators.  According to Darin Stahl, lead analyst with Info-Tech Research Group, ROI calculators can be useful, but keep your source in mind.  Even if the numbers are solid, vendors have a vested interest in presenting those numbers in a way that will elicit a desired spending effect.  Vendors provide ROI numbers that put their solutions in the best possible light in relatively broad scenarios.  “The best thing that a small/medium enterprise can do is ‘trust but verify,’” says Stahl.

Part of this verification process should involve reassessing how closely the IT efforts in question align with the organizations business objectives.  Robert Whiteley, vice president and research director for Forrester Research, notes that IT managers who hope to make a case for spending with larger business goals need to speak in financial terms, even if that means learning new concepts and language.  However, this doesn’t mean that IT managers should dive into the nearest MBA program.  Match the level of needed financial acumen to the level of IT investment.  Including net present value or internal rate of return will help align the costs with the business requirements.  Leverage templates and tools to model the expected cost within the context of your own environment, Stahl advises.

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