3. Cost-Benefit analysis

To save repetition in this mini-web, the combination of 'upgrade / new system' will be reduced to just the word upgrade but the issues are equally valid for a completely new installation.

Regardless of whether you choose to use a formal methodology such as System Life Cycle, you still need to consider the benefits that an upgrade offers compared to the 'cost' of doing so.

This is called carrying out a cost-benefit analysis.

'Cost' was put in quotation marks because it is not simply a case of money. 'Cost' involves many other factors as well. These include

  • Financial cost of the upgrade
  • Loss of productive time whilst the upgrade is taking place
  • Training requirements for the new upgrade
  • Hardware issues related to the upgrade
  • Backward compatibilty with existing IT systems
  • Maintenance costs
  • Support issues
  • How to actually carry out the upgrade
  • Staff required
  • Staff skills required
  • Timescale required
  • Corporate network security issues
  • Roll back and failure plan

As you can see, there are a large number of factors to be considered when planning an IT change.

Case example

This author worked for many years in a billion dollar car enterprise. They had highly sophisticated IT systems with teams of expert, full time staff dedicated to running their 30,000+ PCs connected over a world wide corporate network.

And yet, as of 2010, they still ran Internet Explorer 6 as the browser for all employees.

Why? They had plenty of cash to pay for new licences, so why keep a nearly 10 year old software application as the default web browser?

The reason, is that they carried out an annual cost-benefit analysis to see if it was worthwhile changing the software for every single PC in their network. And every year the answer was No - there was not enough benefit compared to the effort and risk to warrant an upgrade to the latest IE.

Often what forces the issue for world-level corporations is that the vendor declares they no longer intend to support the old software with security patches or bug fixes, and so the cost-benefit analysis eventually swings to 'Yes' - time to upgrade.

 

challenge see if you can find out one extra fact on this topic that we haven't already told you

Click on this link: Carrying out a cost-benefit analysis