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Financial

Expensive infrastructure costs

Your Challenges / Financial

Expensive infrastructure costs due to high CapEx and OpEx.

As far as ICT goes, a common challenge faced by organisations reducing expensive infrastructure costs is keeping CapEx and OpEx to a minimum. CapEx is short for capital expense and is the term associated with upfront costs. In an IT department, these upfront costs are typically related to the implementation of a solution which may consist of hardware and software procurement. An operating expense, referred to as OpEx, is the ongoing money spent in order to use, manage and maintain these solutions.

In ICT, the cost that normally gets most attention from management is your OpEx, whereas people tend to quickly forgive or forget CapEx. An OpEx driving an under-performing (or overvalued) ICT system is typically a recurring cost, felt as a financial drain, often serving as a continuous reminder of a bad decision that was once made.

What drives high OpEx and expensive infrastructure costs?

Labor and skills

Competent technical resources are extremely expensive. Labor and skills make up one of the largest OpEx components required to drive and operate your ICT infrastructure.

Environmental overheads

As an often overlooked OpEx, your environmental overheads are your recurring costs in housing your solution such as electricity, cooling, security and real estate costs.

Maintenance

Alot of expensive infrastructure involves frequent maintenance and updates required in the form of software patching and upgrades in order to maintain optimal security and operational performance.

Redundancy and backup

If you require continuous up time which most organisations do then generally an N+1 approach is required where infrastructure is duplicated or extended for fail over situations, dramatically impacting your OpEx.

Depreciation

Much like most hardware assets, ICT hardware will depreciate in value over time. This continuous negative depreciation on your balance sheet is often looked at as an increasing OpEx cost to your organisation.

System outages

Recurring system outages will cost you financially to resolve. System outages will also impact severely on your organisation’s ability to be productive as the ICT required to keep you profitable is inaccessible.

Need help reducing your expensive ICT infrastructure?

If this sounds like you then you need to review your setup and consider what infrastructure model will best suit your organisation.

Epic IT can explain the pros and cons with each model and help build you a more cost effective solution.


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