It is easy to determine how much IT costs a company or an individual business unit. All you have to do is add up all of the IT costs including salaries, training, equipment, leases, and other expenditures. But a much harder equation to determine is what IT is worth. The perfect IT department would be invisible, intangible, and taken for granted. Any company that has a help desk knows that they are anything but invisible. They are the keepers of the data, the Mr. Fixits of the computers and, most of all, the guardians of downtime.
In the real world end-users rarely make mistakes. It is generally the computer, IT or some fault other than the realistic "oh no" second which is the time between the click of a key and the realization, "Oh no! I didn't mean to do that!" But face it, we are humans running machines. In the event of an 'oh no' second, IT becomes worth a lot if the deleted file was critical, and can be restored. It's worth little if it is restored only to find out the user didn't save any of the data he or she was working on. So how can you determine "real" IT value and worth?
A recent survey by Ashton, Metzler and Associates indicated that 50% of all companies interviewed regarded their networks as strategic, which translated to a definition of "very important." Less than 50% of those companies believed that their network infrastructure helps them compete in the marketplace. So where does this leave IT? They are somewhere between "very important" and taken for granted.
If you look at downtime costs for any company you'll see that 'very important' can quickly be accelerated to 'very critical.' If you look at loss of data at any given point in time, 'very critical' can become the difference between staying in business and going belly up. IT makes decisions every day that determines success and failure for many components and applications within a company. Business unit managers do not understand networking concepts, and in many cases, don't care to. There is also another level of manager that understands enough to be dangerous because they occasionally read technology magazines.
As the head of an IT department, it is difficult to create a case for new expenditures and upgrades due to language barriers and technical indifference. Add to this the fact that IT is considered an "overhead" department and business unit managers are less than likely to want to accept costs for things they don't understand. The real value of IT is in assuring that a company has full accessibility to their data and applications without delays and downtime. This is a service for the company that is paramount to their success.
So how do you quantify that concept into a "dollars and cents" figure that everyone will understand? The first thing is to make sure that whatever data you supply is relevant and applicable to the audience. Analogies help! One of my favorites is when a company asks about an infrastructure upgrade that some application vendor told them they didn't need (it was a sales point from a salesman, not technical advice), but because it saved money it caught the appropriate ears. The infrastructure in fact did need upgrading. The majority of ports were at or above acceptable service levels and adding the new application to the network would have brought it to its knees. I explained that the underlying network is like a gravel road. The application that you are working on now is like your good old trusted Chevy. It works and it drives fine on the gravel road. Now pretend that your new application is like a Ferrari. It can go 200 miles an hour, but do you really want to do that on a gravel road?
Real data in less complex terms is the key. Management understands reports in dollars and cents and common terms such as "sales." In order to establish the worth of your IT organization, you have to be able to quantify technical terms into non-technical terms. For instance, if each sale generates xx number of packets on the networks and requires xx amount of disk space for storage, and if sales increase by the percentage management wants, will your disk space and network be able to handle the load? Compare the overall cost of IT to the number of packets moved, amount of data stored and the costs of downtime. You can now begin to see a worth, or as management likes to hear, "a return on investment."
So how do you get this data? One of the real problems is that there are very few applications that can farm this data from the disparate equipment that runs a company. Many of the network management products on the shelf today work via thresholds. But thresholds do not always provide actionable data unless a hard error exists, such as a WAN link going down. Thresholds are also set by the network manager and are generally based on "unacceptable" levels. It is better to make sure you don't get to those levels. This leaves the IT manager with a mountain of data to interpret, weed through, and compile. It is difficult to justify expenditures based on 90% of utilization.
Some examples with their translations are:
packets daily = % usage
users supported = customers served
data stored = transactions daily
uptime = savings of downtime
helpdesk calls = problems solved (but be realistic, only if they are solved)
in-house training = training savings
It's almost a contradiction to put worth on savings of non-loss, which is not a tangible figure, but with all of the security breaches, hackers and other issues that face IT every day, there is certainly worth to that number. The fact that you did not have any of the above, or the time in which it took to correct them should also be stated. If 25% of companies in your industry lost xx number of dollars and your department thwarted the same attack, add this number to your worth statement.
Finally and most importantly -- brag a little or a lot! When is the last time you called your baby Bell and thanked them for the last six months of uninterrupted service? Never! Remember, the better your IT department is, the less visible they will be to users they support. Publish numbers like 0 hours down in xx days. Companies do this with safety figures as an incentive not to break the record and keep safety in the mind of their employees. Isn't the real worth of IT safeguarding a company's assets and providing all business units with effective and safe networks? The faster they see your worth and the more they are reminded of your worth, the more credible you become and the easier it will be to justify necessary expenditures. If they value your opinion and still chose not to take it, you can always say, "I told you so!"
Carrie has been involved in the computing and networking industries for nearly 20 years. She has been involved in sales, executive management, and consulting on a wide variety of platforms and topologies. She has held Director and VP positions with fortune 500 companies and consulting firms. Carrie has taught classes for Novell, Microsoft, and Cisco certifications as well as CAD/CAE, networking and programming on a collegiate level. She has worked with manufacturing firms, medical institutions, casinos, healthcare providers, cable and wireless providers and a wide variety of other industries in both networking design/implementation, project management and software development for privately held consulting firms and most recently Network and Software Solutions.
Carrie currently works with The Siemon Company as the Network Applications Market Manager where her responsibilities include providing liaison services to electronic manufacturers to assure that there is harmony between the active electronics and existing and future cabling infrastructures. She participates with the IEEE, TIA and various consortiums for standards acceptance and works to further educate the end user community on the importance of a quality infrastructure. Carrie is one of the few that chose to work with applications and networks providing her with a full end-to-end understanding of business critical resources through all 7 layers of the OSI model. Carrie currently holds an RCDD/LAN Specialist from BICSI, MCNE from Novell and several other certifications.