Cost of change

Well it is time for my second blog entry. This time around, I have chosen to discuss some of the hidden costs of changing from one product to another that pretty much delivers the same functionality and results.

Firstly a cost of change analogy:

If we take a simple home scenario of changing a car to help understand some of the hidden costs we do not always think about.

So you decide that you want to trade in your large gas guzzler for a more economical car, no harm in that. So you start by determining if the numbers add up, if you bought a smaller car that has a manual transmission instead of an automatic transmission, which is more economical than a larger car. You chose the Manual transmission because it should be more economical. The figures will add up as follows:

Lower monthly car instalments

Lower monthly fuel bills

Lower insurance premiums

Based on financial analysis you go ahead and change your car.

Now the hidden costs start showing their ugly head, your wife, your son and your daughter need to go for additional driving lessons as they have only ever driven automatic transmission cars and do not know how to drive a manual transmission car. Then there are a few mishaps that result in damage to the car but no one is injured. This means claims against your insurance, which means you loose your no claim discount. Then because you have made claims your premiums go up. While your family is learning to drive properly with the manual transmission they actually use more fuel than your old automatic transmission car did. Then along comes your first family holiday with the new car and you find that because the car is smaller you can not fit all the luggage into the car. So you either need to buy a trailer or rent one, again additional cost that would not have been incurred with the old larger car.

Net result, after a year your new cheaper, more economical car has actually cost you more.

Now lets move on to the technology related discussion.

Decisions of which technology is deployed to solve a particular problem is always taken at a higher level. The biggest contributing factor is always cost, and ROI. The cost of ownership and ROI is very often presented by the vendor and although fairly accurate, omit a couple of factors. Here are some factors often overlooked when migrating from one technology to another. These are factor that either myself or friends of mine have witnessed, this list is by no means exhaustive or complete.

One of the the most commonly overlooked factors is the cost of retraining the users on the new technology.

On a regular basis all the peripheral scripts and tools that have been developed around the existing technology.

If we focus on Workload automation, very often some of the batch streams need to be redesigned because the new technology does something differently.

More often than not there is a great deal of work that needs to be redone with regards integrating the new technology into other areas of IT.

All of the above points can be quantifiable in turns of cost to the organisation in monetary terms with regards to time and loss of productivity.

There are also some soft losses when switching technologies, and these include:

Relationships that have been built with the existing vendor. This sometimes results in additional benefits such as discounts or even early access to new releases.

The support staff going from experts to novices.

Familiarity moving to apprehension or uncertainty.

In conclusion, I am in no way saying that we should not change technology. I am just wanting to ensure that we see the entire picture and know the true cost of the change. There are times when the newer technology is the better option even if it costs slightly more to change. I guess my ultimate goal is that we make informed decisions based on factual data and not make decisions based on emotions.