The Total Cost of Ownership Problem

There is no doubt that we have a total cost of ownership problem in technology, it exists in pretty much every industry but largely driven by complexity, the regulatory environment and the incremental, siloed nature of the way technology estates evolved, it is particularly acute in banks.

The constant rising cost of running estates is choking off the spend that could change the paradigm by investing in change. There are many factors that are driving this from the need to support an ever growing sea of data to technical debt and supplier laziness. Even when budget increases are not available the inevitable cost creep of the run side consumes what it needs from the change spend.

The sad thing is that if you ask the business they might think they are investing in technology. They aren’t. This problem will not cure itself, it will continue to get worse unless we change how we approach ‘run the bank’ spend.

The problem may have its genesis in complexity and incremental requirements but it is made worse by the way organisations think about and attempt to tackle the issue. Strategy consultants and boards talking about location metrics; procurement focus on FTE cost as a sole metric regardless of productivity; no effective measure of output. Management’s attitude to the problem of TCO and its desire to preserve the status quo – that manifests in many ways from holding on to named resources to an attitude that measures success in the size of their budget or the number of people in their organisational structure.

One of the keys to unlocking this is understanding that generalisations about the whole won’t help. The problem is too big to be looked at in its entirety, we need a way to break it up into manageable chunks. We also need to understand that not everything is in the same state and the technology is there not for technology’s sake but to support a business. So we need to segment the problem into key elements all of which will have a solution. That solution is not static, it can and will evolve driven by a specific set of factors.

Get in touch and find out how we can help solve your TCO problem.