Cost of systems at rest
There is an illusion that everything in the business world is always changing. Actually, something is always changing somewhere. So at any time, you get some disruption stories in the media, and some of those stories may even be real if you look beyond the hype. But if you take a specific process in a specific industry, it can stay mostly stable for years or decades, and so the corresponding digital tools running them will stay stable, ‘at rest’, for long time periods.
At any point in time, most of the digital processes of any company should be ‘at rest’. The systems will still be used a lot, and its availability will be key, but there should be only very limited incremental improvements going on.
We care about projects
To master IT costs, it is important to spend efficiently on the major improvements going on, and this is where IT departments typically put their focus on. Most IT departments also understand that they need to invest on real innovation and not vaporware, even if separating both is very hard. Hype vendors are typically very convincing.
But most of costs are for systems at rest
However, you may realize where you spend more money is just maintaining systems ‘at rest’. Typically, license, hardware and upgrade costs will be the majority of spending in that phase. This is why thinking upfront about cost ‘at rest’ is the key to long-term control of IT costs, and having capacity to invest in real innovation.
Packaged software is worse
Seen through this angle, one strategy stands out as very bad: on premise packaged software. You pay to adapt your processes to the packaged software once. Then, you have to pay software license maintenance, and an upgrade cost every 2 or 3 years. Situation can be even worse if:
- You need to customize the software package, which is the case in 90% of the applications.
- The Application have costly hardware and infrastructure requirements, such as the need for a proprietary database, and profligate use of hardware
Unfortunately, both are very common.
Cloud may be quite good
Cloud solutions are a mixed bag. Sure, they do not have upgrade costs, and the software editor has some incentive to master IT costs, and have a lean technical stack, especially if it started as a cloud solution.
However, your costs are guaranteed never to decrease, and if you accept big limits in user efficiency as part of using the cloud, this will also not decrease in time.
Specific development may be excellent
Specific development should hold the best value for ‘cost at rest’, provided they have a serious IT architecture. After the application is in production, it can typically be maintained for a very cheap price. For sure, you still have to organize significant knowledge long-term about the solution, but this will be much less costly than having useless projects running permanently.
The older of us remember the time when most applications were specific development. For sure, we had some reasons to decommission them: one of them is the shift from terminal ergonomics to modern ‘windows’ applications that happened in the 1990s. Another reason is the cost of mainframe servers, a very expensive architecture. A third reason may be applications crumbling under their own weight due to bad architecture.
The old problems are solved
Those reasons do not hold today, as enterprise applications architecture is now stable: there is commoditized hardware and infrastructure now. Whether we have a stable ergonomics now with the point and click windows ergonomics is more open to question: some people think mobile devices now rule, and desktop ergonomics are obsolete. I believe this point of view is incorrect: Office work is still done in PCs, with the most efficient ergonomics being spreadsheet-like. There is a place for mobile phone interfaces for casual access, but this is secondary.
Open Lowcode offers a rock bottom cost at rest: the technological stack is as simple as it can be, the tool is open-source, and it runs on commoditized infrastructure: Linux, and Database. Of course, you are not linked to a cloud provider, so you are free to optimize hardware as much as you want. It may be exactly what you need to generate savings to allow you to invest in new areas, IT or others.
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