IT Performance Monitoring and ROI
| Category: Business Development | Date: 2003-03-03 |
The economy is down and the IT industry, it appears, has been one of the economic sectors that has been hit the hardest. According to the META Group, Inc., as of Fall, 2002, businesses have cut their IT budgets up to 20%. The NASDAQ is at one of its lowest points. Many companies have folded or merged, and IT/MIS directors everywhere are being required to do more with less.
Information technology has never been considered a money-maker by most companies, big or small, but rather as a necessity. Nonetheless, during the 1990s, IT departments were often given huge budgets for ambitious projects that would put their companies on the cutting edge of the Internet. Small businesses were told (with statistics to back the claims) that a presence on the 'Net was mandatory for their success.
The situation is mostly reversed today and the new buzz-phrase is Return on Investment or just "R.O.I". Bluntly stated, this phrase means "Attention, all IT personnel, you must now justify your economic existence."
Therefore, this article will briefly explore various methods for IT personnel to contribute to their company's financial well-being.
For example, everyone should know that a virtual private network can lower your long-distance phone call rate, since the communications aren't using the phone system, except to dial your ISP, a local call.
Everyone should know that now, as before, the customer is always right, and that good customer relations are mandatory for the smooth operation of any local area network, intranet or commercial web site. The IT staff should not only be prepared to solve trouble calls, but to proactively assess the company's projects and how they relate to IT. For example, if your users do a lot of traveling, begin researching some good bargains in laptops or wireless devices.
Don't expect to be given a lot of time to complete ground-breaking projects. Your managers probably aren't interested in experimenting. On the contrary, managers want to see how IT can save them money in the short run, like maybe in this quarter. Consequently, you might find yourself spending extra hours looking for a less expensive vendor for a particular service, or you might be deciding if that service is needed at all.
Eight Methods for Increasing Return on Investment:
1 - Shared Services: Look into sharing your servers, hard drives and/or bandwidth with other vendors through an extranet, housed in a co-location environment. Yes, there are some security issues with that kind of setup, but the cost savings could still be considerable, compared with having to house and maintain your own servers.
2 - Review all vendor and outsourcing contracts, and then negotiate with those vendors.
3 - Itemize your company's IT expenditures. Break your IT holdings down into specific increments and determine which services, software and hardware are necessary.
4 - Look into open-source solutions. For example, the Linux operating system is backwardly compatible with many older PCs. This means you don't have to buy new workstations to run the new memory-hungry operating systems. Also, you can install and test open-source software without having to purchase it first.
5 - Perform a Cost vs. Benefit Analysis. The concept is simple in principle and is being used today by many IT managers to justify their budgets, and, in some cases, their positions.
6 - Optimize Your System. In the past, IT spending was largely on the network layer, but after the network has been built and is up and running, what is the next step? Optimization. If your company is now dependent on that network, any drop in performance can be detrimental. For example, a web server outage can lose customers, if you're runnning a store.
7 - Use tools for measuring the ROI of systems management The are many applications on the market today for monitoring web server transactions, resources, and user activity.
8 - Develop an IT Portfolio. This is a relatively new method by which you manage your IT department like an investment portfolio. If we monitor IT as a "reward vs. risk" model, then it will be easier to determine IT's value, for example, in regard to future projects.
About the Author
Copyright 2002 (c) Roy Troxel, All rights Reserved. Permission is granted to electronically reprint the following article, in your publication, e-book or web site, as long as there are no changes made to the copyright info and this footnote is included with the article. Please contact the author at: rtroxel@cyber-routes.com if this article is used. Please include publication location information.
rtroxel@cyber-routes.com
http://www.cyber-routes.com
Information technology has never been considered a money-maker by most companies, big or small, but rather as a necessity. Nonetheless, during the 1990s, IT departments were often given huge budgets for ambitious projects that would put their companies on the cutting edge of the Internet. Small businesses were told (with statistics to back the claims) that a presence on the 'Net was mandatory for their success.
The situation is mostly reversed today and the new buzz-phrase is Return on Investment or just "R.O.I". Bluntly stated, this phrase means "Attention, all IT personnel, you must now justify your economic existence."
Therefore, this article will briefly explore various methods for IT personnel to contribute to their company's financial well-being.
For example, everyone should know that a virtual private network can lower your long-distance phone call rate, since the communications aren't using the phone system, except to dial your ISP, a local call.
Everyone should know that now, as before, the customer is always right, and that good customer relations are mandatory for the smooth operation of any local area network, intranet or commercial web site. The IT staff should not only be prepared to solve trouble calls, but to proactively assess the company's projects and how they relate to IT. For example, if your users do a lot of traveling, begin researching some good bargains in laptops or wireless devices.
Don't expect to be given a lot of time to complete ground-breaking projects. Your managers probably aren't interested in experimenting. On the contrary, managers want to see how IT can save them money in the short run, like maybe in this quarter. Consequently, you might find yourself spending extra hours looking for a less expensive vendor for a particular service, or you might be deciding if that service is needed at all.
Eight Methods for Increasing Return on Investment:
1 - Shared Services: Look into sharing your servers, hard drives and/or bandwidth with other vendors through an extranet, housed in a co-location environment. Yes, there are some security issues with that kind of setup, but the cost savings could still be considerable, compared with having to house and maintain your own servers.
2 - Review all vendor and outsourcing contracts, and then negotiate with those vendors.
3 - Itemize your company's IT expenditures. Break your IT holdings down into specific increments and determine which services, software and hardware are necessary.
4 - Look into open-source solutions. For example, the Linux operating system is backwardly compatible with many older PCs. This means you don't have to buy new workstations to run the new memory-hungry operating systems. Also, you can install and test open-source software without having to purchase it first.
5 - Perform a Cost vs. Benefit Analysis. The concept is simple in principle and is being used today by many IT managers to justify their budgets, and, in some cases, their positions.
6 - Optimize Your System. In the past, IT spending was largely on the network layer, but after the network has been built and is up and running, what is the next step? Optimization. If your company is now dependent on that network, any drop in performance can be detrimental. For example, a web server outage can lose customers, if you're runnning a store.
7 - Use tools for measuring the ROI of systems management The are many applications on the market today for monitoring web server transactions, resources, and user activity.
8 - Develop an IT Portfolio. This is a relatively new method by which you manage your IT department like an investment portfolio. If we monitor IT as a "reward vs. risk" model, then it will be easier to determine IT's value, for example, in regard to future projects.
About the Author
Copyright 2002 (c) Roy Troxel, All rights Reserved. Permission is granted to electronically reprint the following article, in your publication, e-book or web site, as long as there are no changes made to the copyright info and this footnote is included with the article. Please contact the author at: rtroxel@cyber-routes.com if this article is used. Please include publication location information.
rtroxel@cyber-routes.com
http://www.cyber-routes.com
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