What does IT cost?

One of the discussions I regularly get drawn in to is the “commercial software” versus open source debate. Because the Microsoft Software Donation programme is a large part of what I do, everyone assumes I’m on the side of big business and against the FOSS (free open source software) movement. I’ve always found this something of a false debate. Especially in the not-for-profit sector where so many companies will either donate or heavily discount their products. 

I spent many years doing ‘forensic’ analysis of organisations IT costs, looking at the full cost of IT ownership. The thing that always surprised me was that everyone focussed on the hardware and software costs. In a sense that’s not surprising, they are the big headline numbers and you inevitably have to find the cash to pay for them. Large organisations would invest considerable resources in managing their purchasing processes and getting the best deal for hardware and software.

While getting the best deal is no bad thing, many organisations miss the bigger picture. When you study as many organisations as I have, you realise that people costs contribute for at least half of the total cost of ownership of IT. And if an organisation does their own development work, that can go up to nearly 75%!

Now it’s easy to miss this, as a lot of the people cost in IT is hidden. But whether I use commercial software or free software, I still need the skills and the expertise to deploy it. That means either giving up the time of someone in the organisation who has the skills, or contracting expertise in from outside (by the way, this is where everyone who advocates open source software makes the money to pay the rent). Then once it is deployed, you inevitably have to find someone to support and maintain it. Again this is either an internal person cost or an external support organisation cost.

IT deteriorates over time – that PC that seemed to be the equivalent of an F1 car when it was new, now runs like rusty bicycle. That’s one area where support and maintenance is needed. The other problem is that what we need from IT changes over time. Either way, it needs support and maintenance which costs either in time or money.  

Whatever anyone says to you, IT support costs add up. And the more we get access to low cost software – open source or otherwise – the more these costs come to dominate our overall IT costs. Ignoring this simply leads to long term problems with our systems.

However, recognising this cost, factoring it in when we make choices about our technology, can significantly reduce total cost in the long term. In addition, the lost time among the rest of the people in the rest of the organisation because of poor or defective systems can be significantly reduced.

I’m an engineer by training and engineers always go back to first principles. The first principles of choosing what IT solutions we use are:

• Identify what the organisation needs IT to do (this trumps everything else, every time)
• Identify the alternative technologies which will meet those needs (in IT there’s always more than one solution whatever anybody tells you)
• Identify all the costs associated with the technology throughout its expected lifespan (nothing comes completely free forever, and everything, especially technology, has a limited lifespan)
• Decide what is the best solution for you (balancing lifetime costs and its ability to meet your needs)
• Budget for lifetime support costs as well as up front purchase & implementation costs
• Plan for its replacement

If you do this the answer to the question  commercial software or open source, drop out the bottom.

What does an IT function do & why does that matter when I don't have one

Huge amounts of paper (and computer disc space) have been consumed by the question: "What should an IT function do". It has exercised the brains of academics, business people, consultants, and IT managers/directors since the first commercial computers were put on the market. But for small non-profits, its easy to ignore this question because, by and large, they don't have an IT function.

However, just because a formal IT function doesn't exist, doesn't mean small non-profits can't benefit hugely from the use of technology - there are a whole host of case studies on the CTX website that show how small non-profits use technology to further their missions. The issue for small non-profits is to find a way of delivering the key elements of what an IT function brings without employing more staff in IT than in the rest of the organisation!

A recent article on Computerworld, "IT gets its report card", sets out a good model for what to look for when trying to find IT resources to support your organisation. It splits the IT function into three parts:

• Plan
• Build
• Run

It also highlights that as you run down this list, the resources you need grow.

In my experience, a lot of small non-profits focus on the "build" part of this model, acquiring technology because its available, then fitting it to their needs. But because they don't spend enough time on the "Plan", IT is always a peripheral part of what they do - a necessary evil. This is compounded by a lack of appreciation of the resources needs of "Running" IT which either leads to resentment of the financial drain, or a slow atrophy of the technology to the point where it becomes a hindrance not a benefit.

So where do you find the resources to deliver the "IT function" for a small non-profit without having the people in your organisation? Well for the "Plan" and "Build" functions, one option is to find a volunteer. Because they are specific projects (all be it you will repeat the "Plan" exercise on a regular basis and have multiple "Build" projects), using a volunteer is a practical option. One good place to look for a suitable volunteer is IT4Communities. IT4C have a rosta of IT volunteers with a the full range of skill sets you need. What's more, IT4C can help you stucture the engagement so everyone is clear on what is needed and the commitment they are making.

When it comes to the ongoing "Run" activities, it's best to work with a commercial organisation. Essentially, for the run pieces, you want someone who is available when you need them i.e. when you have a problem. It's no good having to wait a week before your volunteer can look at a problem that is stopping you working. There are a number of commercial IT organisations that focus on the voluntary and charity sectors. Most focus on a particular region and many are social enterprises. The Suppliers Directory, maintained by LASA is a good starting point to finding one. Investing some money at this end of the "IT function" will help to ensure that the time, effort, and aspirations that went into the "Plan" and "Build" stages continues to pay off in the long run.

Phone costs

We're slowly getting everyone up to speed on the new phone system and getting them to use it. One of the really cool features (well I think it's cool) is the "Single Number Reach" (SNR) facility. Using SNR, when someone calls my office number, it rings both in the office and on my mobile at the same time. I can answer on either and move the call between the two.

So, for example, I take the call on the desk phone but I need to leave the office while I'm talking (or I want to go somewhere private), I can transfer it to my mobile at the touch of a button and off I go. The same is true the other way round. So if I answer the call on my mobile and walk back into the office, I can simply pick up the desk phone and carry on.

What this means in practice, is that I don't have to worry about diverting my phone to my mobile or worrying about calls I might miss if I'm out. If someone rings the office, I will always get the call. In addition, I don't have to give anyone my mobile number.

When we were looking at the justification for the phone system, one of the points was that we would have much less requirement for people to divert their phones to their mobiles when they were working from home (they can use the softphone from home). With single number reach, I'm now thinking we could incur higher charges because we will use the facilities much more. So the real benefit is in better call management and working more effectively as an organisation, not saving money.

VOIP

Last Thursday we installed the VOIP system Cisco have kindly donated to us. What really surprised me was how hassle free this was. Admittedly we have a Cisco Voice Partner, Unifi, doing all the work, but even so, the whole process was very hassle free. We had about 5 minutes downtime swapping cables from one router to another, plus 30 seconds a user plugging the phones in. Remarkable compared to my previous encounters with similar systems.

There was one amusing interlude. We had BT in to install some new circuits. They needed to pull a cable from the 3rd floor to the basement. They started at the top and worked down. On the first floor the cable started feeding through a bit quick. It got quicker and quicker until about 20 metres of cable had emptied itself on top of the engineer! Thick Laurel and Hardy and you'll get the idea.

Anyway, we are still waiting on the BT circuits coming live, then its onto the interesting bit: training the users!

Handbuilt by Richards

There was a TV commercial in the 1980's for the Fiat Strata (or Ritmo if you are reading from outside the UK) with the strapline "Handbuilt by Robots". The Not the Nine O'Clock News team did a brilliant satire of it with the alternative strapline line of "Handbuilt by Roberts". Watch the two in the above order and you'll get the joke.

On Tuesday this week, I felt like I was on the Not the Nine O'Clock News set. I had a meeting with our IT service partner Appichar. The four people in the room were me (Richard), my CEO (Richard Craig), their CEO (Richard Ferriman), and our account manager (Richard Eynon).

CTT IT, Handbuilt by Richards!

This is why I get out of bed

There's a horrible feeling on the Monday after the clocks go forward, when you get out of bed and the alarm says 6am but your body is telling you 5am, and you wonder why you do this? So it's really timely when something comes along that tells you why (OK so it actually arrived Friday, but it really helped).

The New Shoes Theatre company in Kent are one of the beneficiaries of the Huddle donation programme that CTX runs. Their story reminded me that what I do really does make a difference.

Cloud Hype

I guess I first heard the term "cloud computing" around about three years ago, but in the last six months, just about everything seems to be tagged "cloud". My old colleagues at Gartner have a long standing model for this phenomenon called the "Hype cycle". It runs through five phases from a technology "trigger", through to a "Plateau of productivity". Right now, cloud computing must be right at the top of the "Peak of inflated expectations"!

What follows is peak this the "Trough of disillusionment" as organisations dive into "cloud" technology and  discover half of what's out there is only superficially "cloud", and lots of things don't really deliver. We're already seeing lots of debates on what really constitutes "cloud", which marks the start of the decline.

The model of delivering discrete applications over the web has been around for over ten years - variously called application service provision (ASP)  or software as a service (SaaS). Those applications that have developed and survived over this time have jumped on the "cloud" bandwagon. Expect them to jump off again as the term becomes seriously devalued. They will go back to selling the benefits of their applications, and its delivery mechanism (over the web), and all talk of cloud will disappear from their vocabulary.

Meanwhile, large organisations are adopting the flexible processing power models that have also been labelled "cloud". Most charities will only run into this as their web hosting providers adopt it. Even then it will be pretty transparent, except perhaps in some of the contractual terms.

Perhaps the most interesting developments to survive and thrive will be the ability to access many more applications from anywhere on the web (or mobile device), and the advent of the "app" model of downloading applications when I need them to run on my particular platform (mobile or static). There are some gamechangers in there that will have their own hype cycles.

Anyway, for me, the term "cloud computing" is dead for any useful purpose.