If it’s something that was bought four to five years ago, think through what your replacement costs will be.
Is it something you want to move to the cloud or redevelop? Unless the vendor has a very easy migration methodology, you probably don’t have time left if it’s already four or five years old, and you probably need to re-invest in what you currently have. Proper migrations to a ‘cloud’ or redevelopment can take multiple years. A simple lift and shift to IaaS doesn’t buy you much.
Is it hardware? Start working on quotes for what a new hardware replacement would be. We recommend five years for most infrastructure hardware as the maximum lifetime. Sometimes it’s good to put it in your year four budget so that if it gets denied, you can come back at year five and say “I said we needed to replace this last year and you made me cut it – we HAVE to do it this year”
Is it software? Have you upgraded it since you bought it? If not, it’s most likely going to be an expensive endeavor to get it to the latest version – and depending on how many versions behind you are, you may need to change your processes/code to support the new versions.
If it’s something that was bought six to seven years ago, HELP IT OUT!
If it’s something you want to move to the cloud or redevelop, you HAVE to shore it up in its current state. Developing and/or moving takes time and energy. Don’t let the on premises or old version go neglected any longer, or it will be EVEN HARDER to get things done. That’s how companies end up supporting 15-year-old versions of software that have zero vendor support while trying to do a multi-million dollar migration.
Is it hardware? GET OFF OF IT. Hardware has increasingly improved in modern times and, honestly, rarely fails compared to 15-20 years ago. However, now when it fails, it’s often even more painful than it used to be. Modern software/OSes are starting to impose more and more hardware restrictions that keep you from reusing hardware in perpetuity.
For example, Windows Server 2022 won’t run if you don’t have a TPM, and VMware dropped support for older CPUs with version seven. And of course, we can’t forget all of the hardware-based security vulnerabilities that don’t get patched on old hardware – which leaves your environment exposed.
This isn’t just servers – think of switches, routers, firewalls, SANs, etc.
Is it software? Have you upgraded it since you bought it? You REALLY need to. The new version will likely include security patches, but it will definitely include new features/functionality, and probably supports newer OSes.
Also, look to see if there’s a new, major upgrade you need to budget for. Many vendors charge for specific upgrades even though you’re already paying them a yearly ransom tax for upgrades.
Hopefully this helps with the VERY daunting process of budgeting. Often, gathering information on the last few years is difficult if you only operate within your IT bubble. This is a time to bring Accounting into things, as they NEVER forget expenditures and can tell you every dollar spent for the last 30 years. Your request for the last five years should be a very easy task for them.
Stay tuned for our last blog of our budgeting series – how to get your budget approved.