For the past 6 years, I have been making presentations at companies and at university MBA programs about the best way to operate and run a modern IT organization.  I firmly believe that despite the rapid change we experience in IT, the underlying basics have not changed.  These "secrets" are what I write about in my new book entitled "The 9 1/2 Secrets of a Great IT Organization-Don't Do IT Yourself".   Importantly, each of these secrets has a user component emphasizing the requirement that IT must work together with users to achieve success.  Chapter 6 of my book is excerpted below.  It is available on Amazon and Barnes and Noble in both paperback and electronic formats. It is priced at less than $15.

There are many reasons to maintain an up-to-date software and hardware environment in today’s modern corporation. The number one reason is to achieve the full capability of computer systems. Out-of-date hardware is often too slow to use the latest software, while out-of-date software is usually not fully supported and could result in major problems should vendor support be required. This is Secret #5.
 
There is no doubt that the ongoing requirement to upgrade is a source of angst within most companies since they continually see computer costs escalating. However, executives must realize that it is no different than keeping your car and truck fleets up to date, or assuring that your insurance is the best possible, or that the latest products are being sold. It sometimes seems like executives feel that they are buying their last computer when they make a big commitment to hardware only to find out that their purchase was probably obsolete the day it arrived.
 
When we started in computers, there were no PCs. Terminals only existed on the largest mainframe computers, and only data (numbers and letters) were depicted on the screens. Today we have real-time full motion video in full color along with any type of interactive process that one can imagine; and experts say that this speedy evolution of technology will continue at an even more rapid pace. It is extremely dangerous to let your software and hardware inventory become outdated. This can only open the way for competitors to gain a competitive advantage by more fully utilizing the capabilities that accrue to early adopters or even normal adopters.
 
The second reason for keeping up to date is the effect on staff. People in IT are interested in using the latest tools and equipment to enable them to accomplish their jobs in a quicker and more efficient manner. No one wants to work on old equipment that is more difficult to work with when there are better alternatives. It is no different than having employees work in old-fashioned environments with outdated equipment or having salesmen driving old cars or manufacturers using outdated techniques. Everyone wants to work with the latest equipment.
 
However, there is a caveat to this. IT should never recommend new software or hardware just for the sake of having new hardware or software. The decision to upgrade should only be made when there is a good business reason, such as: additional capabilities, avoidance of increased support charges, or a decrease in development time. Technology for “technology’s sake” is not a sufficient reason to upgrade.
 
It is also important for companies to display an up-to-date working environment to attract the best people possible. There are many reasons the top talent pick a company. You don’t want an outdated environment to cause a good prospective employee to say no.
 
This is a good place to talk about the cost of IT. IT has a great deal of discretion regarding its spending levels. There are fixed costs that are hard to control. There is a certain amount of money needed to run the current production environment. There is a base of systems that must be run in order for the company to operate.
 
As an alternative, there is the possibility of outsourcing this to an outside data center rather than running the work on company owned equipment. Many companies are providing this service, and it can be a way to reduce costs. Be careful that the company providing the service is safe, is also protected from disaster, and can move quickly should problems occur. Remember, internal computer systems are the lifeblood of the company. Also, once you have moved all of your processing offsite and eliminated your data center, it is very difficult to reverse direction and reinstitute the center. Usually, staff has moved on and the technology has probably changed.
 
A trend that is on the increase is using the cloud to run systems on a vendor’s computer rather than one owned or outsourced by the user. Again, it is important to understand that there are many risks that could befall a company if the outsourcer gets into trouble. This requires a lot of oversight by the user and it is difficult to reverse. However, it can be a way to reduce costs in IT.
 
It is also possible to outsource or offshore much staff work in order to reduce costs. Again, vigilance is important to assure that your data is secure and not being misused by the outsourcer. It is also critical to maintain a certain level of knowledge on the internal staff. Remember, the people in IT are probably the only people in the company who really know the details of how things work deep in the bowels of the computer systems. In addition to using some of these new ways to reduce costs, IT must also consider response time requirements. If the company is willing to endure longer response times, there are ways to reduce hardware costs to achieve that.
 
Suffice it to say, there are many ways to control costs but it must be consistent with the need to provide the expected level of service to the users and protect the integrity of the company’s information.