Penon Partners Penon Partners
| IT & Operations, News & Articles

You can’t cut your way to success

Are you tired of managing your IT budget and constantly feeling a target on your back?

Anybody who has ever managed an IT budget knows there is a target on their back; a financial target that is. An IT department’s budget is often viewed as exorbitant and therefore easy to slash in order to create more company profits.

You are often asked to defer or cancel maintenance, sweat assets beyond their useful life, reduce your capital budget and maybe even defer projects that do not directly benefit revenue growth.  This may be acceptable in the short term, but over the mid and long term it will likely:

  • Introduce security risks as systems become unsupported by the manufacturers
  • Cause lost productivity for employees because old technologies don’t have the performance to efficiently run the more demanding new applications
  • Reduce the reliability of systems because they fail more frequently as they age
  • Increase labor costs because older technologies will demand more attention to keep running
  • Result in brain drain because employees will leave to go to companies where they can keep their skills current

Don’t you think it would be more valuable to focus on generating long term value instead of short-term savings?

I have found a more successful approach which is to proactively promote and sell new technologies to the C-Suite.  Partner with the businesses to find ways IT can grow the top-line for the company and improve the customer experience.  This will make IT a value-added service instead of a cost center.  In addition, this drives employee engagement higher as they consult with businesses, implement new technologies and become leaders in their field.

I have also found that partnering with the CFO is key.  Every asset in the IT budget has a useful life. This is not about the number of years it will depreciate/amortize or how long until you sweat it to death.  This is about finding the point in the assets’ life where the cost to run it is more than the cost to replace it.  With the help of the Finance team, you can determine the Total Cost of Ownership (TCO) which should include items such as:

  • Electricity to run it
  • HVAC to cool it
  • Cost for its data center U’s
  • Cost per Incident and the number of Incidents
  • Cost per Change and the number of Changes
  • The business labor cost for using the technology
  • Depreciation/Amortization
  • Maintenance
  • Cost of cloud and SaaS services

Once you have the TCO, calculate the same for the new technologies/solutions that are available.  More often than not the CFO and I have found that there comes a point in time where replacing the asset is more cost effective than continuing to sweat it. With these details you can build a Business Case with a positive ROI and the CFO’s backing to sell to the C-Suite to secure the funding needed to replace the asset.  In addition, this also drives employee engagement higher as they see they are on a winning team, implementing new technologies and becoming leaders in their field.

Are there more ways to save money without painful sacrifices?  Absolutely, contact me and I’ll be happy to discuss how.



Written by Andy Smith,, Practice Leader – Global IT Operations Excellence Consulting at Penon Partners

Thank you for your active reading – Discover our services and why Penon!

©2021 Penon Partners |

Privacy Policy

This privacy notice discloses the privacy practices for This privacy notice applies solely to information collected by this website. It will notify you of the following:

  1. What personally identifiable information is collected from you through the website, how it is used and with whom it may be shared.
  2. What choices are available to you regarding the use of your data.
  3. The security procedures in place to protect the misuse of your information.
  4. How you can correct any inaccuracies in the information.

Information Collection, Use, and Sharing

We are the sole owners of the information collected on this site. We only have access to/collect information that you voluntarily give us via email or other direct contact from you. We will not sell or rent this information to anyone.

We will use your information to respond to you, regarding the reason you contacted us. We will not share your information with any third party outside of our organization, other than as necessary to fulfill your request, e.g. to ship an order.

Unless you ask us not to, we may contact you via email in the future to tell you about specials, new products or services, or changes to this privacy policy.

Your Access to and Control Over Information

You may opt out of any future contacts from us at any time. You can do the following at any time by contacting us via the email address or phone number given on our website:

  • See what data we have about you, if any.
  • Change/correct any data we have about you.
  • Have us delete any data we have about you.
  • Express any concern you have about our use of your data.


We take precautions to protect your information. When you submit sensitive information via the website, your information is protected both online and offline.

Wherever we collect sensitive information (such as credit card data), that information is encrypted and transmitted to us in a secure way. You can verify this by looking for a lock icon in the address bar and looking for “https” at the beginning of the address of the Web page.

While we use encryption to protect sensitive information transmitted online, we also protect your information offline. Only employees who need the information to perform a specific job (for example, billing or customer service) are granted access to personally identifiable information. The computers/servers in which we store personally identifiable information are kept in a secure environment.

If you feel that we are not abiding by this privacy policy, you should contact us immediately via email to

Privacy Policy |

Terms and Conditions

Last updated: 02/12/2020

Please read these Terms and Conditions (“Terms”, “Terms and Conditions”) carefully before using the website (the “Service”) operated by Penon Partners(“us”, “we”, or “our”).

Your access to and use of the Service is conditioned on your acceptance of and compliance with these Terms. These Terms apply to all visitors, users and others who access or use the Service.

By accessing or using the Service you agree to be bound by these Terms. If you disagree with any part of the terms then you may not access the Service.

Links To Other Web Sites

Our Service may contain links to third-party web sites or services that are not owned or controlled by Penon Partners.

Penon Partners has no control over, and assumes no responsibility for, the content, privacy policies, or practices of any third party web sites or services. You further acknowledge and agree that Penon Partners shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with use of or reliance on any such content, goods or services available on or through any such web sites or services.


We reserve the right, at our sole discretion, to modify or replace these Terms at any time. If a revision is material we will try to provide at least 30 (change this) days’ notice prior to any new terms taking effect. What constitutes a material change will be determined at our sole discretion.

Contact Us

If you have any questions about these Terms, please contact us.

| Website designed by Clementine Creative Agency