Home / CIO / What CIOs Should Know about the Changing Calculus of IT Investments

What CIOs Should Know about the Changing Calculus of IT Investments

Keeping data under the direct management of the enterprise is of the utmost importance, despite the cloud having taken over IT. So what does this mean for CIOs? In an article for TechRepublic, Mary Shacklett elaborates on what CIOs need to do in order to remain ahead of the game.

Finding Money in New Places

The push for on-premise computing does not mean much change for how the operations are conducted. IT capital will remain to be divided between capital investments made on-premises and operating expenses given to CIOs to utilize at their discretion. Despite this divide, there is more commonality for there to be greater funds in the operating expense pocket. Capital expenses are an investment of time, especially because they require amortization over several years. An operating expense is a terse one-year commitment, much more appealing. There is the added issue that capital expenses require an exorbitant initial investment.

All of these factors are forcing IT vendors to evaluate how they price their on-premises solutions. Minimizing the harm that can come with large capital investments and offering lower-cost leasing options is one way they have combated the problem with finances. They have also toyed with the idea of offering a monthly subscription service for cloud use. The low cost up front may be appealing, but it will probably translate into a higher cost over time that the CIOs should be mindful of. However, they are getting a low commitment with this sort of “pay as you go” plan.

CIOs should educate themselves about these new pricing models and the trends that will likely affect them in the coming years. They should also be mindful that the shift of more money into the operating expenses may result in questions from coworkers. CIOs must communicate and explain why they suddenly have a higher discretionary budget and where the money is going to.

You can read the original article here: http://www.techrepublic.com/article/what-cios-should-know-about-the-changing-the-calculus-of-it-investments/

Check Also

The IT Industry’s 95% Problem

Chris O’Brien wrote an article entitled “Evernote’s 5% problem offers a cautionary lesson to tech …

Leave a Reply

Your email address will not be published. Required fields are marked *