Why do Business people consider IT as a major expense? 💰

I had a great discussion with my uncle who has more than 20 years of IT Industry experience at different scales. We had a really long conversation on two sides which I explained below with the examples:

One move and change the whole game!

The question is:

Why do Business people have a mindset of IT and Software development their major business cost instead of the investment?

Yes, it’s true at one degree but it depends on the business, too. Isn’t it?

Case 1:

If a business entirely depends on Software as a Service (SAAS) then it’s always your investment in technology, infrastructure, and people (team). But if a person is thinking about IT as expenses, it’s hard to find good people to run their business and end up with the mess!

Let me give you a real example from my previous experience.

I worked with few clients and I always delivered more than asked. Here’re my all recommendations. But one of the USA client who was non-technical and a lawyer. When I took her project I got to know that, the project was handled and developed by 5 different developers and never been able to deliver to the end result. Why???

One of the reasons is, she was always looking for low-cost developers so that she can save money and achieve the task. Even for me, she offered only $50 to complete a really complex task. Check the worked I did for that client as below:

Merging different technology and deployment

If she invested money into software development from day one, she won’t end up with different projects and technology stacks. It was a nightmare to resolve and merge different projects and technologies. 👨‍💻

Example: Facebook, Twitter, Snapchat, Airbnb, and SAAS companies whose entire business depends on the Software.

Case 2:

If your core business is the Manufacturing, construction, or not related to Software as a Service then it’s an agreeable thing to consider IT as the expenses to some instance.

A reason is, a business wants to build the core business first and then invest in the technology to scale up quickly compared to the competition.

For example, I talked with one of the company from Toronto, who’s in the construction business and want to build their ML and AI system to scale up their work routine easily. This completely makes sense!

Example: Construction, Agriculture, Manufacturing companies

Things can be worked out without technology in the beginning!

In my understanding and experience with my IT clients, it’s always wise and smart move to invest in the great team, technology, and infrastructure to scale up quickly and target for the long term win instead of short term wins! 🥇. And If it’s business as Case 2, it’s better to invest at the right time to compete with other companies.

As for the USA client's first short wins seem great at a time but when the project wasn’t working she realized that wasn’t an actual win but major loss.

I’m sure business people understand their wins and loss better than anyone!

Are you thinking about something else or what’s your experience? Feel free to share or comment below your thoughts! 🧐

Author

Vatsal Shah

PORTFOLIO | GITHUB | BLOG

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