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Sun 16 Dec 2007 11:35 AM

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Total consequence of ownership

Businesses today think twice before changing operations. Brid-Aine Conway examines total cost of ownership.

Enterprises think seriously these days before doing anything to change the way their business works. They research, they run analyses and they estimate costs and profits. They do their return on investment (RoI) and their total cost of ownership (TCO) and any other acronym they can think of.

An employee needs to build a business case before pitching a new idea and this is perhaps even more necessary in IT, where the person you're trying to convince may not have in-depth IT knowledge.

But coming up with a great new innovative product the business can use is no good if the support functions necessary aren't considered just as carefully.

Take wireless networks as an example. No one could deny that wireless networks are a good technology and can often be integral for some industries to keep a competitive edge, eg hospitality.

Businesses often engage in rigorous procedures for choosing their wireless network - vetting a vendor and deciding how the network will be integrated to the existing structure, as well as the usual RoI and TCO. But they often ignore the ancillary technologies that have to come with it. While enterprises might budget for the extras, they don't always seem to throw the same amount of intellectual capital at choosing them or researching them.

With wireless networks, security is the support function that gets ignored when all the research and investigation is going on. Security is a part of the TCO for any network but perhaps more importantly, it's a consequence of ownership. To have a corporate network that is not secured in any way at all is unheard of these days. The problem is, not securing it properly is often worse than not securing it at all because the illusion of security leads to a dangerous complacency.

When an enterprise's CIO can proudly state that the company employs WEP encryption alone to secure its wireless network, there's a problem (see ACN's feature "Wireless insecurities"). That WEP encryption ever provided a network with security is a myth. Though it has long been known to be false, the myth persists, online and in word of mouth. However, the web searches of 15 minutes or so are enough to at least cast doubts on the myth's veracity, and more likely dispel it entirely.

It's not easy for CIOs to pitch and implement new products and innovations, or even just those products that are new to them. That they may not have a wide range of knowledge on all possible enterprise IT is not a fault. But not acquiring knowledge on all aspects of a new project, and the consequences that its implementation may bring, is.

Too often, the blood, sweat and tears goes into getting the project off the ground, with little energy left for the fundamentals of how that project needs to run and be supported day-to-day. It's just not enough to look at RoI and TCO anymore. In fact, businesses need a fresh take on an old acronym - they need to start looking at the Total Consequence of Ownership.

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