Developing Strategies to Address Unexpected Lease Extensions | IT Steering Committee

D.

The scenario described in the question involves an enterprise that has recently shifted from leasing to purchasing IT infrastructure and software licenses. The company is now facing unexpected lease extensions, which have caused significant cost overruns. The IT steering committee is responsible for making decisions about the company's IT investments and must determine the best course of action to address the cost overruns.

Option A suggests establishing a program to annually review financial policy on overruns. While this may be a good idea in general, it does not specifically address the current situation. An annual review program would not help to address the immediate issue of unexpected lease extensions causing cost overruns. Therefore, option A is not the BEST direction for the IT steering committee to take.

Option B suggests establishing an end-of-life program to remove aging infrastructure from the environment. This option is not directly related to the current situation and may not help to address the cost overruns caused by unexpected lease extensions. However, an end-of-life program could help to prevent similar situations from arising in the future by ensuring that the company's IT infrastructure is regularly updated and modernized. Therefore, option B may be a good long-term strategy, but it is not the BEST direction for the IT steering committee to take in response to the current situation.

Option C suggests implementing budget cuts to compensate for the cost overruns. This option is not ideal because budget cuts could lead to reductions in IT services and may negatively impact the company's operations. Moreover, budget cuts would not address the root cause of the problem, which is the unexpected lease extensions. Therefore, option C is not the BEST direction for the IT steering committee to take.

Option D suggests establishing a policy to consider the total cost of ownership in investment decisions. This option is the BEST direction for the IT steering committee to take because it addresses the root cause of the problem, which is the unexpected lease extensions. A policy to consider the total cost of ownership would require the company to evaluate not only the upfront costs of purchasing IT infrastructure and software licenses but also the ongoing costs associated with maintaining and upgrading the equipment. This would help to ensure that the company is aware of the full cost of its IT investments and can make informed decisions about whether to purchase or lease equipment. By implementing this policy, the IT steering committee could avoid future cost overruns caused by unexpected lease extensions. Therefore, option D is the BEST direction for the IT steering committee to take in response to the current situation.