Nickel and Diming is Not Fun: Redefining Infrastructure in a Technology World

Budgeting for technology used to be so simple. Operational dollars went to all expenditures that were recurring in nature – licensing, maintenance, billing, warranties through staples, travel and training. Capital dollars went to one-time expenses over 2k. Easy-peasy.

Welcome to today’s exponentially changing world of technology, where an issue surpassing actual FUNDING is the after-process of PAYING.

Today let’s take two scenarios.

  1. Building a new lacrosse field including renovating a stadium to make it ‘high tech’. Clearly a capital project. The project is complete and a folder with the words ‘Capital Project’ written on the outside shields $10M worth of receipts for project expenditures. Your finance department receives the folder and stamps a big, green ‘APPROVED’ across the package and begins to process. No questions asked.
  2. Your IT department is leading a charge to upgrade the wireless infrastructure on campus. This is a one-time total overhaul of the core network, access points, hardware, wiring, and pipes, all in preparation to pump significantly more bandwidth across the campus. The project is complete and a folder with the words ‘Capital Project’ written on the outside shields $2M worth of receipts for project expenditures. Your finance department receives the folder and – – – the process begins. The next several months are littered with communications from Finance to IT questioning tens of expenses. Example: email received from Finance noting a receipt contains a line item for $30,000 involving wireless access points. There were 100 purchased, but the access points were $300, so that $30,000 needs to be moved to operational dollars. Each access point was under the 2k limit. Hmm. Well, this was funded as a capital project and IT doesn’t have 30k in operational dollars. Every expense is scrutinized and presented as ‘operational’ instead of capital.

Please note: In scenario one above, there is a line item for $12,000. For 40 of the exact same wireless access points in scenario two. $300 x 40 = $12,000. ESPN has certain technology requirements for bandwidth and accessibility to even show up for a big game. Not surprisingly, the lacrosse field renovation passes without a second glance. Because it’s a standard capital project.

Infrastructure is defined by Merriam-Webster as “the basic equipment and structures (such as roads and bridges) that are needed for a country, region, or organization to function properly“.  Herein lies the problem. Most look at the introductory definition without reviewing the second definition that has been added more recently. Infrastructure is also defined as “the underlying foundation or basic framework (as of a system or organization)” – BINGO.

Infrastructure is infrastructure. A hurdle we need to overcome involves re-associating ‘building’ with objects beyond bricks and mortar. Foundations don’t simply refer to poured concrete. Foundations are also physical networks. As some invest in IaaS (infrastructure as a service) while most kick it old school with wireless in conjunction with physical networks, suddenly we’re also defining intangibles (you can’t touch a wireless network) as infrastructure. Mind blown? Let’s stick with today’s new normal of plain-Jane physical and core network infrastructure.

For now, the hurdle is helping to redefine infrastructure beyond buildings. Tomorrow is associating capital with invisible service. How can we best approach this? Real question.
This is a topic for all universities and businesses alike to minimally be aware of, preferably get some education on. As technology evolves, more focus will shift to smaller integrating with smaller. No more large chunks of heaping technology. Agility, scalability and integration will be key. IT will rally for the funding. The last hitch should be spending most of everyone’s time explaining every single piece of the purchase. The right leader will know what is capital and what is not and should be more than willing to vouch for each expenditure – from the $300 wireless access points purchased Costco-style (in bulk) to the $800k virtual infrastructure block. It’s all brick and mortar to us. Technology is infrastructure. The computer refreshes of yesterday are the total network overhauls of today, on set cycles to keep up with the pace of technology. Each are capital projects made of capital expenditures.

Fun times ahead!

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