Analysis on IT Expenditures — Personnel

From the desk of: Sam C. Chan

Analysis on IT Expenditures — Personnel

April 25, 2007

This is intended to be used in conjunction with separately provided materials, in our discussion of IT expenditure projection for your firm. The charts and narratives here provide the necessary background information and concepts. This analysis focus exclusively on personnel costs (salaries and/or consulting fees). Hardware, software and supplies are excluded.

Key Points:

Sensibility & Efficiency
Proactive foresight vs Reactive scramble
Focus on long term TCO

IT Preparedness Quotient:
0 being not-at-all prepared (100% reactive), and 10 being well-prepared and pro-active.

Goals: To allocate most of the IT budget for productivity gains. The penny-wise, pound-foolish practices of SOHO sites, devoid of methodology & coherent strategies, often result in very frequent glitches, dismal productivity, high stress & costs.

Excessive waste — A side-effects of typical corporate style operations. A sensible approach could easily trim that down to manageable level.

Allocation Ratios:
Here, figures above are shown in 3 pie charts. Green hue represents productivity categories, blue hue = problem solving, and yellow hue = waste.

Clearly, SOHO sites are characterized by small green, large blue zone.

Corporate sites have smallest blue, and largest yellow.

Managed SMB share similar green with its corporate counterpart, but much smaller yellow, with a fairly large blue remaining.

Notes:
Sabotage = intentional damage, trespassing.
Abuse = staff misuse of fund, decisions not based on best interest of organization.
Bureaucracy = self- explanatory
Waste = good faith mistakes

Personnel Costs only, excludes hardware, software, supplies, etc.