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5 min read

How Much Is Your Aging Technology Costing You? 

aging technology

After many towns and cities modernize their technology, they end up asking, “Why did we wait so long?” The financial and productivity ripple effects are often so immediate and startling that it's like getting a positive boost of energy and morale. In addition, real financial impact results from both a reduction in capital expenses and operational expenses. 

This post focuses on the cost savings that accompany a reduction in capital expenses for hardware and software. As you will see, there are many parts and pieces that affect your budget simply by focusing on the hardware and software you own or lease.

  1. Hardware. Your servers. Your workstations. Even your networking hardware like routers, switches, and firewalls. The more hardware you own and maintain onsite, the more costs you accrue. Not only do you need to purchase hardware but you also pay for installation, warranties, and licenses. Cloud services often reduce the amount of servers that towns and cities own (and, as a result, the amount of networking hardware you own). If your workstations are more than five years old, you may also suffer from productivity issues that can be solved more cheaply by upgrading to brand new workstations. Computer hardware continues to get better and, at the same time, lower in cost.

  2. Software. Software often creates large expenses in a municipal budget. Purchasing software licenses, user licenses, installation, data migration or integration with other software, and ongoing upgrades add up to a lot of money. Many advancements in software delivery, especially through the cloud, have lowered software’s overall costs—including lessening the hands on expenses of onsite maintenance. Assess if your aging software might be better served by a cloud solution to potentially decrease your overall costs by a significant margin.

  3. Procurement. With less hardware and software to manage, you will find yourself purchasing less hardware and software. Whether it’s your procurement office, your manager, your clerk, another member of your staff, or your IT vendor helping you buy hardware and software, purchasing takes a long time. You write up requirements, post an RFP or RFQ, receive responses, assess them, interview vendors, and make a final selection. Even if you’ve streamlined parts of the purchasing process, it still takes up a lot of time.

  4. Asset management. The more you have, the more you need to track. As part of your asset management, you need to keep tabs on all hardware, software, networking equipment, warranties, and licenses. This activity requires dedicated attention to make sure all inventory is accounted for, all licenses are up to date, and that assets are replaced or upgraded in an appropriate timeframe.

  5. Managing the hardware and software lifecycle. Obviously, the upfront costs of hardware and software are significant, but there is also occasional maintenance, upgrades, repairs, and (eventually) decommission. The more hardware and software you manage onsite, the more of these costs pop up along the way. Especially for older machines, repairs and maintenance become more frequent, essential, and costly. That’s why the more hardware and software you can move into the cloud, the less costly your onsite maintenance. 

    Aging hardware and software suffers from two major disadvantages. First, it’s simply old, expensive to maintain, and unable to perform at a sufficient capacity. Second, it doesn’t make financial sense compared to modern and emerging technologies that save organizations money by simply eliminating the need to manage hardware and software onsite. Examine the costs of the areas above with your IT staff or vendor and explore if there are ways that you can save money. 

Operational expenses can also sneak up on towns and cities because they are less apparent and often involve reactive, unplanned expenses. Like a leech, aging technology operationally eats away at your money and time in a few areas.

  1. Building space and utilities. Maintaining a lot of hardware first requires a lot of building space. Freeing that space up can be a small boon, giving your employees more room without having to buy or rent additional space. Also, hardware maintenance requires a lot of electricity, heating, and cooling. Those utility costs add up over a year, so reducing those expenses by using less hardware can lower your energy bills.

  2. Reactive IT support. Aging technology is often accompanied by reactive IT support. We often encounter towns and cities that think it’s cheaper to call a vendor who serves more like a repairperson, repairing old hardware similar to maintaining an old car. Not only does aging technology break down more often but reactive IT support also merely puts out fires without addressing the root cause. Because you never know when or how many fires will crop up again, this situation leads to unpredictable IT support costs that gets expensive quickly.

  3. Cybersecurity. When you haven’t modernized your technology, you drastically increase your risk of a data breach or a hacker stealing information. Older hardware and software often lacks modern security features that help prevent viruses and hacker exploits. And we find that some towns and cities fail to regularly patch and upgrade software to keep up with increasing security threats. Cloud software often builds in security upgrades in a seamless, automatic fashion, taking that activity off your plate while keeping you more secure.

  4. Data backup and disaster recovery. Lack of effective data backup often accompanies aging technology. Sometimes, the data backup process is manual and untested, meaning that data backup either doesn’t happen or it fails to actually work when a municipality attempts to restore data. Modern data backup and disaster recovery ensures you have a combination of onsite and offsite data backup, with the offline component making sure that you can recover your data in case of severe disasters like a tornado or flood.

  5.  IT staff and employee training. Do you have IT staff (or non-technical staff) who simply put out technology fires every day? Or are they more strategic about using IT to help your municipality complete important projects? Do your employees need training to help them learn or keep up with complicated software? Modernizing your technology can both reduce staff time spent battling fires (similar to reactive IT support) and reduce the learning curve that your employees have with new software.

As part of lowering your operational costs, it helps to consider using an IT vendor that costs less than adding a full-time employee and has an experienced team of engineers who can quickly and efficiently handle your ongoing technology needs. By investing in proactive IT support, you take care of many operational technology needs in one fell swoop from data backup to security. Staying on top of these operational technology areas helps keep your costs low and predictable.
Interested in addressing your operational IT costs and risks? Give us a shout to talk in more detail.

Let's talk about how VC3 can help you AIM higher.