Blog
home
  • Register

Data Net Blog

Why You Need to Know the Difference Between “Value” and “Cost”

Why You Need to Know the Difference Between “Value” and “Cost”

There’s no denying that the numbers on an IT invoice can be intimidating, to say the least. However, when making important decisions about your IT, you need to also look deeper than the numbers, to what you are actually going to gain by making one investment over another. This is the difference between comparing cost and comparing value.

Analyzing Cost

The word ‘cost’ is one that is familiar to most. In essence, it is what you have to give up in order to receive something else. While it is perhaps most familiar in the financial sense, cost can also refer to time, effort, or any other finite resource. By analyzing cost, you are directly focusing on how much less of one of these resources you will have, in the exchange for more of another.

Don’t get us wrong, it is important to factor in your costs as you evaluate your business’ plans. The problem comes into play when cost is the only factor that is considered, as cost only tells half of the story.

By its nature, analyzing cost strictly focuses on what you lose. What resources will you be sacrificing to do this? How much money will doing that put you back? What will you be unable to do if you take this course of action?

In order to properly make a fully informed business decision (or any decision, for that matter), you have to also consider the other half of the story as well: that decision’s inherent value.

Analyzing Value
Counter to the analysis of costs, analyzing the value that a decision will bring you can help you determine what you gain. While again, it is perhaps most often seen in the financial sense (“Is this purchase worth it?”), value can take many different forms. Sometimes, making a particular decision will boost your standing with a prospective client, or will open you up to more opportunities down the line.

So, rather than focusing on what a new workstation will cost you financially, compare that cost to the potential benefits that the new and improved workstation will be able to bring to your business. Will it increase your productivity? Will you have access to improved solutions that ultimately translate into improved employee satisfaction, and therefore, greater talent retention? Will you be able to better serve your market, fostering loyalty in new and existing clients?

Calculating Your IT’s Value
In order to establish how much value a certain endeavor or initiative has brought your company, it helps to compare it mathematically. Not only will this help you to track what you have invested into a given initiative, it will also help you to calculate the optimal outlay for maximum value.

To calculate this, it may take a little trial-and-error, with some simple tracking of the results. Using a simple “x=y” equation, insert your invested cost for “x” and the result for “y.”

Let’s assume you’re determining how much time to spend on a particular initiative. If, for example, you figure out that your investment into your technology increases productivity, you can track the ratio of productivity-to-investment until the benefit tops out and starts to fall again. Let’s further assume that you observe that investing $25 extra into a workstation increases productivity by 10% and investing $30 extra will increase it by 17%. If investing $31 only increases productivity by 16%, you’ll be able to narrow down your optimal spend to between $25 and $30, maximizing your value.

Data Net can offer you the solutions that can provide you with maximum value. Reach out to us at (760) 466-1200 for more information.

Tech Term of the Week: Blockchain
What to Do With Your Old Power Converters, Accordi...
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Tuesday, October 23, 2018

Captcha Image

Mobile? Grab this Article!

QR-Code dieser Seite

Tag Cloud

Tip of the Week Security Best Practices Technology Business Computing Network Security Tech Term Cybersecurity Privacy Internet Cloud Smartphones Malware Android Communications Communication Browser Productivity Microsoft Hardware Email VoIp Google Social Media Managed IT services Wi-Fi User Tips Small Business Ransomware Hosted Solutions Passwords Software Data Efficiency IT Support Innovation Backup Collaboration Windows 10 Network Blockchain Patch Management Employer-Employee Relationship Applications Saving Money Internet of Things Cloud Computing Mobile Devices Marketing Mobile Device Users Business Management Business Hackers Workplace Tips Cortana Outsourced IT Compliance Router VPN Government Remote Computing BDR Wireless Charging Word Data Management Managed IT Service Virtual Assistant Smartphone Business Intelligence Data recovery Virtualization How To Virus Tech Terms Cost Management Information Miscellaneous Computers Data Protection Automation Managed IT Services Physical Security Phishing Networking Gmail Data Backup Artificial Intelligence Access Control Excel Save Money Computer Wireless IT Services Chrome Scam Data Breach Bandwidth Microsoft Office Paperless Office Staff Apps GDPR Holiday Congratulations IT Management Mobile Security Voice over Internet Protocol Hard Drive Ink Travel Hard Drives Managing Stress Conferencing Lead Generation Botnet Maintenance Plug-In iPhone Analytics Microsoft Office 365 Server Management Value Website Digital Websites Streaming Media Storage eCommerce Gadgets WhatsApp Operating System Processors Telecommute PowerPoint Education SSD G Suite Troubleshooting Office Remote Monitoring Internet Explorer Proactive IT Law Enforcement Telecommuting Licensing Unified Communications Authentication News User Tip Spyware Safety Downloads Dark Web Sales Online Shopping Data loss Sports Reporting Office 365 Live Streaming Facebook Bring Your Own Device Update Content Filtering Retail Threat Remote Monitoring and Management Tech Support Big Data Technology Tips RAM Authorization Server Telephone System Database Edge Trends Error Tablet Settings Network Attached Storage Environment Amazon HP Spam Medical IT User Security Telephony IT budget Twitter Hybrid Cloud Outlook WannaCry Remote Support Printing Workers Alert Vulnerability Microsoft Teams Comparison Cleaning Cybercrime Tip of the week Dongle A.I. Password e-waste Document Management Antivirus Connectivity SaaS Business Technology Voice over IP Inventory Cables HIPAA Paper File Sharing Millennials Laptop Backup and Disaster Recovery Company Culture Specifications Machine Learning Tactics Apple Movies Touchscreen Knowledge Battery disposal Printers Regulation WiFi Analysis Quick Tips Thank You Managed Service Disaster Recovery

Latest News & Events

Please join us in congratulating Bill Vann on his promotion to Customer Success Manager....

Contact Us

Learn more about what Data Net can do for your business.

Call Us Today
Call us today
(760) 466-1200

5795 Kearny Villa Road
San Diego, California 92123