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The Storage Economist

Constructive View of IT Finances

So, did we go over a cliff this week? I was sort of expecting a more grandiose situation, like the scene when Denethor runs (while on fire) over the edge of the promenade of Gondor (in Return of the King).

Our U.S. national tax situation was not quite as spectacular. But the recent changes in my local tax laws (including the annual change of insurance and withholdings) caused me to spend some time this holiday break looking at my financial plan for 2013. It is good to challenge older strategies and tactics and to take action to develop the best financial plan for my family and me.

IT financial reviews would be just as useful, given the uncertain times and conditions of our business economies. I recommend that technologists and architects sit down and have this dialog with the financial teams as well. Just as in legislative jostling, a clear understanding of all sides of a problem needs to be open for review and compromise. It is important that all sides of a balanced approach be reviewed. Perhaps some open-ended questions for such a collaborative meeting:

  • Data growth is not slowing down, but can this capacity be presented in a virtual, thin or different way?
  • Are metrics and measurement systems in place to help projects know what they consume?
  • Copies consume a lot of the current capacity; are we enabling projects to see and understand their consumption?
  • How do we plan effectively knowing that budgets will continue to be tight for the foreseeable future?
  • Do the right risk/reward systems exist to help drive the preferred behavior?
  • Understanding the trade-offs of CAPEX spend vs. OPEX spend (is one better than the other this year?)
  • Why do IT assets have to be purchased and depreciated?
  • In order to reduce costs, can management allow some risk areas to rise in order to avoid costs (i.e. challenge backup, disaster protection, compliance)?
  • Are all costs equal? If not, which are the most important this year?
  • Does all data or all IT resources have to physically be in the company-owned data centers?

The start of a new year is a great time to sit and evaluate budgets and spending. It is a good time to challenge past traditions in light of future certainties. It is a good time to have agreement and develop a plan to make the coming year profitable and exciting for all.

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David Merrill - The Storage Economist

David Merrill
Chief Economist

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