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The cost to prevent an accident was $11.
If you lived in the 70’s you will understand. When you hear the words “Ford Pinto,” you probably have an image of fire that comes to mind. At the end of the rapid design cycle, Ford learned of a design flaw. The fuel tank is located between the rear axle and the rear bumper, the filler neck has had trouble detaching from the tank in a low-speed rear impact, and exposed bolts in the car’s body can puncture the tank. The result of the low-speed crash was widespread: fire. The most logical adjustment is carrying a cost of $11 per vehicle.
“No,” said Ford.
Emma Jones published in the September/October 1977 issue that at least 500 people had died in the fire in eight years.
One death was one too many, and a life is definitely worth more than $11 per vehicle repair.
Ford saved their way to disaster, and businesses do the same every day, often based on faulty assumptions. You did it. I did it. Fortunately, most of the short-sighted funding decisions we make do not involve the loss of life. In my part of the world, we see continued misconceptions around technology investment.
Your spending on technology should continue to increase. Yes, the cost per unit of measurement may be going down, but the overall technology needs of your business will require more investment. The assumption, however, is that total spending should be reduced. That assumption is based on a lie—primarily because we hold the narrative that technology costs are falling. So our total cost should be decreasing.
Consider a simple example: the cost of storage. The narrative is that the cost per gigabyte of storage is falling. That narrative is self-correct: the price per gigabyte of storage has gone from $0.12 in 2009 to $0.038 in 2017. That is where perception begins to separate from reality. Depreciation in recent years (in this example) has reduced storage volumes significantly. As with all cost-effective myopia, looking at this as a reason for generally reduced storage costs is misplaced. Are you paying attention to the amount of data being stored?
Did you know that 90% of the information available today was created in the last two years? In this example, just looking at the cost per unit will make your mind expect a discount – your savings can increase significantly.
“The cost of technology is going down” is what your brain is screaming. As the use of technology increases, however, and your business becomes more dependent on it, the overall investment should increase. But, as Todd Bolsinger puts it, “We’re going to stick with preconceived notions as much as possible. Then we become frustrated because our savings expectations are not met.
The negative result puts your business at risk.
In your world, you may feel that saving money on technology is a smart move. When it comes to your technology decisions, your choice is simple: do you see it as an investment or an expense? Want your bank or hospital to use your logic to make technology investment decisions? Have you determined how much of a security risk your decisions pose? What will you do today, tomorrow or next week when faced with your $11 decision?
Mark Hodges is the Chief Development Officer of an Arkansas IT services firm. Edafio technology partners. The opinions expressed are those of the author.
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