SmartAdvice: Tips For Turning IT From Cost Center To Profit Center - InformationWeek

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SmartAdvice: Tips For Turning IT From Cost Center To Profit Center

CIOs must focus on increasing revenue, not just cutting costs, in moving IT from cost center to profit center, The Advisory Council says. Also, how to build a defensible business case for moving off obsolete Windows 98 PCs, and using the Future Search approach to jump-start a vision statement.

Topic B: How do I justify replacement of obsolete Windows 98 PCs?

Our advice: Despite Microsoft's extension of paid support for Windows 98 until June 30, 2006, we believe that elimination of MS-DOS-based Windows (95, 98, ME) from business use is long overdue. This implies replacement of any PC hardware slower than 300 MHz (probably more than five years old, and therefore fully depreciated) and upgrading of memory to at least 128 MB.

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SmartAdvice: Information Security

The reason for this belief is the poor system integrity, security, and manageability profile of these versions relative to the Windows-NT family (2000, XP, 2003). These technical shortcomings result in reduced user productivity and high support costs from dealing with system crashes, virus infections, corrupted files, etc. Defensible estimates of these costs are central to your business case. The security implications alone may be sufficient justification in the context of a larger information-security program.

Another approach to justifying PC replacement is to view it as a prerequisite for a business-driven application project. A side-by-side demonstration of any modern application software on a new PC versus a 266-MHz Windows 98 PC should be sufficient to convince business management of the necessity of the upgrade.

Upgrade Components
On the cost side, a defensible business case should recognize three cost components of the upgrade:

  • Software license upgrades (the least expensive part)

  • Replacement PC hardware

  • IT labor costs to migrate files and physically replace PCs. This cost can be more than the hardware costs in some companies or at remote locations.

Failure to include all three cost components will undermine the accuracy and credibility of your proposal.

-- Peter Schay

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