The widespread assumption of the late 1980s that downsizing from mainframes would reduce IS costs for just about any business sparked what has come to be an increasingly confusing debate about the costs of computing. Today, evidence from a wide range of sources challenges this assumption. Users have become increasingly disturbed about the high costs of decentralizing IS resources. There is also a growing realization that the cost structures of mission-critical systems have remarkably little to do with underlying technologies.

As user experiences with major platform changes have shown, no one system is inherently more or less expensive than another. Real costs depend greatly on the applications and workload profiles of individual organizations. Cost profiles vary by industry, by type and size of business, as well as by geographical location.

Underlying hardware and software technologies are also less important than the way the IS department is organized, the quality of IS management and staff, and the efficiency with which IS resources are used, including the effectiveness of cost accounting and control procedures. IS managers who are considering a major system change involving new computing platforms need a better understanding of IS cost structures and how these structures change over time. Lack of understanding of these areas can result in a business applying the wrong solutions to the wrong problems — and wasting a great deal of money.

This chapter discusses the key factors affecting IS costs in any business. It offers IS managers suggestions on how to avoid common mistakes in forecasting the costs of computing and guidelines for using comparisons with other companies to determine real computing costs more effectively.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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