Software for major corporations can easily be an investment of hundreds of millions of dollars - sometimes annually if your company is large enough.  It ranks up there with the spending on physical assets like factories, plants, vehicle fleets and facilities.  The IT managers can get the money for a "reliable" software product (although this skeptical user wonders if that isn't an oxymoron), but physical asset managers (regardless of their titles) can't seem to get money for reliable physical assets.  For some reason the capital spending on physical assets is skewed towards "cheap" as opposed to "reliable".  Are we still believing the promises of vendors who can't substantial their claims?  Or are we just plain cheap?

I wonder if any sort of Life Cycle Cost Modelling is done on software before it is purchased.  Does it degrade as it is depreciated?  Of course not.  Technology advances may make it technologically obsolescent and then obsolete, but software written in the 1970's will still work just the same today as it did then (if you can find an operating system to run it).  Physical assets like trucks or pumps or compressors or buildings that were commissioned back then are now in some state of deterioration or even scrapped.  Software has a shorter technological life than physical assets, but the physical assets have a shorter physical life.  Never-the-less, even truck fleets can outlast software because of the rapid avancements in software technologies.  We invest in reliable software that we know won't last long but we don't do it for physical assets that will.

Why not apply the same "reliability" logic to physical assets?  Is it that implementation is more difficult?  It may be, but that isn't necessarily real.  Getting expensive software to work well requires a great deal of implementation effort - often costing two or more times the cost of the software licenses themselves.  Physical assets are much cheaper to commission reliably.  Those costs are a fraction of the initial outlay.  Making them reliable - also cheap.  A full blown RCM program for an entire plant will likely cost on the order of 2 to 3% of the capital cost of the asset itself.  That's a far cry from 2 or more times the cost and the result is the same - a system that runs as intended and keeps running that way reliably.

The CFO's of the world need to read this.  Most readers of this blog are likely to be technical people.  Show this to your financial counterparts.  Get them thinking.  Help them become conscious of the choices they are a party to making.