Computer technology has revolutionized the way most businesses work and will continue to do so in the future. As we all know, the acquisition of computer systems is not without risk. In this document, we identify common problem areas and provide some broad general advice on what you can do to minimize the risks involved.

Hidden costs

One of the biggest problems associated with acquiring information technology is that the vendors offering the technology are not always clear about all the costs involved. Due to the complexity of computer systems, consumers are often unaware of all that may be involved in the use or development of technology. Because of this, they may miss out on significant costs related to the system or services they are looking to purchase. Many of these costs are not obvious at all and may only become apparent when systems are upgraded, extended, modified, etc., or integrated with existing systems.

Here are some important questions to ask regarding costs:

1. If software is purchased, what is the license agreement? How many users can use the software? What are the limits of the software in terms of users? Will we have to add more hardware if we add users? How much does maintenance cost and who will perform regular maintenance and at what cost? How much will the upgrades cost? Will the software work with our existing hardware and operating systems? Will our staff require training to use the software? Do we get the source code?

2. For hardware purchases, is the hardware industry standard or proprietary? Examples of proprietary hardware are mainframe and midrange computers from IBM, while an example of industry standard hardware would be Windows-based PCs made by Dell or Hewlett Packard. Will the hardware being offered meet our needs? Can we do a “pilot” system test or does the vendor have examples of other companies successfully using the proposed hardware for a comparable system?

3. Network costs: What are the costs associated with the network?

Sometimes costs are poorly estimated because proper analysis is never done to delineate system requirements. Appropriate software engineering and systems analysis is required early in the development cycle to give a “blueprint” of the proposed system so that costs can be more accurately estimated.

proprietary hardware

Beware of getting locked into proprietary hardware. If the hardware is proprietary, remember that the vendor will have a monopoly on supplying upgrades, parts, etc., so be sure to find out about these costs before you decide to buy. There will be a temptation for the provider to overcharge for things like upgrades or maintenance, as you would be forced to buy only from them. Also, some features you want in the future may not be available if the provider chooses not to offer them. Please note that in some cases, proprietary hardware may consist solely of custom cards running in a normal PC setup.

On the plus side, companies like IBM can maintain strict quality control standards on all aspects of their hardware, and if there is a problem, they can’t blame someone else to try and avoid taking responsibility.

software acquisition

There are several ways to acquire the software your organization needs. Many large computer companies such as IBM, SAP, and Siebel offer off-the-shelf products, frameworks, consulting services, and custom software. Another option is to hire programming staff to write the software in-house.

When you buy software, some software vendors may provide you with the source code. This is highly variable and depends on the nature and scope of the software. If the vendor offers to provide the source code, make sure the application has been developed using industry standard computer languages, otherwise it may be useless. Some vendors may offer you the source code, but will then withhold some key code segments or libraries to make compilation impossible. Again, this renders the source code useless and leaves you at the mercy of the provider. If you choose to create the software in-house, you will be the sole owner. Many companies do exactly that, especially for web-based software, so that they can maintain a high level of control over their computer systems.

As a general rule, go for the simplest approach that meets your needs. Don’t be surprised by bells and whistles if they are unnecessary. If you can use an out-of-the-box product like MS Excel, go for it.

With the importance of the Internet, many businesses choose to hire a web developer (or web development company) to create a website with the functionality they need. Internet and Intranet-based information systems are becoming extremely popular because they are relatively easy to program and customize, and the same software can be used by both internal users (employees) and external users (customers or external employees). Again, make sure the developer uses industry standard languages ​​and components so you can fix or modify the software when you need to, and you almost certainly will. One very important point that I cannot stress enough is that if you have a falling out with your web developer or the company you hired to develop your software, you will be in an infinitely better position to own and control your information systems in a freely modifiable format. , expandable, etc., so you can hire whoever you want to take care of the development and maintenance of your systems.

Conflict of interests.

The last area we would like to address is conflict of interest. Advice that appears to be objective and unbiased may actually be the opposite. This happens when the advisor has a financial interest related to the advice being provided. Here are some example scenarios we’ve seen:

– A company that your organization is considering using to outsource its information technology management offers to provide, free of charge, a consultant to work with you on a feasibility study.

– A salesperson suggests the best way to solve a computer-related problem. The solution goes through the purchase of products from the seller’s company.

– A consultant recommends a particular software company to do custom programming for a project. The consultant has a financial interest in the software company.

While these points may seem obvious, it is surprising how often I have seen these conflicts of interest with often disastrous results. Find someone you can trust to give you honest, unbiased advice.