Bob Lewis
Columnist

Deferring technology costs

analysis
Sep 9, 20072 mins

Dear Bob ..."More bridge lessons" (Keep the Joint Running, 8/25/2007) included the statement, "Your job isn't to be right about all of this, then to say I-told-you-so when something goes wrong."But saying "I told you so," is so much fun!Recently the company where I work found out that the chief engineer wasn't just trying to spend money. We have been trying to get fiber the last 100 yards to a key site, which wh

Dear Bob …

“More bridge lessons” (Keep the Joint Running, 8/25/2007) included the statement, “Your job isn’t to be right about all of this, then to say I-told-you-so when something goes wrong.”

But saying “I told you so,” is so much fun!

Recently the company where I work found out that the chief engineer wasn’t just trying to spend money.

We have been trying to get fiber the last 100 yards to a key site, which while formerly privately owned, is now state property. We will now have to get an easement for access. It will take months.

There is a temporary solution, which is piled high with politics. Won’t happen until just about the time the other is ready to go.

Our plan for a backup link always had been a microwave link, which keeps getting put on hold due to other financial considerations. Until, that is, management came to the conclusion that a critical program, which requires the direct link from our main office to the key site, just isn’t going to happen without the microwave link.

Which of course is now more expensive than it was 6 months ago.

He told them so!

– Spectator

Dear Spectator …

Yup. It’s a story that plays out over and over again in corporate America: Pay it now or pay much more later.

Somehow, later usually seems much more attractive.

While a common excuse is that delay results in lower costs (usually due to either the continuing decrease in cost of information technology or avoiding the cost of an unneeded upgrade) it doesn’t really play out that way.

Even when the cost of technology drops, delaying the expense delays the business benefit too. Delaying upgrades results in more expensive upgrades – the more versions skipped, the more the upgrade ends up looking like a conversion.

Pay it later can make a lot of business sense, though. For the decision-maker, that is. It’s a way to borrow against the future that doesn’t show up on the balance sheet. This means the decision maker can look artificially good while leaving his/her successor holding the bag.

In a sense, it’s a legal way to cook the books.

– Bob

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