View
218
Download
0
Category
Preview:
Citation preview
Hosted by
Windows TCO – Best Practices for Managing Costs and Maximizing ROI
Thomas PiselloCEO and co-founder
Alinean™ - The IT Value Experts™Author of “ROI for IT Solution Providers” (IEP – 2002)
Hosted by
Why Is TCO Important?
IT investment proposals increasingly require financial analysis and justification. CIO’s and senior IT managers are increasingly facing pressure to cost justify IT investments on a financial basis. - Gartner Group
Hosted by
1995 1996 1997 1998 1999 2000 2001200
250
300
350
400
450
500
550
600
650 $642
$573
IT Spending Peaks
IT spending rose from 18.2% of all US business capital investments to a peak of 46.7%
Source: Bureau of Economic Analysis, Table 5.5. Real Private Fixed Investment by Type, [Billions of chained (1996) dollars], December 21, 2001,
Est. 20 % declinein US IT Spendingfrom 2000 to 2003
Flat Spending Predicted 2002 to 2003, Up-tick in late 2003/early 2004
Hosted byIT Spending / Revenue
3.73%
0.82%
2.72%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Avg. US Company Best 25 Companies(>$500M)
Lowest 25 Companies(>$500M)
I T Spending / Revenue
Alinean ValueIT™ Peer Comparison Software – Database of over 20,000 US and international companiesBest /Worst Ranking based on Information Productivity® = EVA/SG&A (Strassmann, Inc.)
Hosted by
PeerMap™ - IT Performance vs. Spending
Frugal Leaders Investing Leaders
Frugal Followers Investing Followers
Hosted byCharacteristics of Value Leaders
Market Position• 65% of companies success related to market position (PIMS Program –
Empirimetric)
Frugal• Strong project selection committees with fiscal discipline• Modest new project budgets• Self service to reduce administrative overhead• Standardization and consolidation• Agility: Able to scale spending to performance/market conditions quickly
Higher Project Success Rates• Smaller projects with more milestones• Strategic alignment, planning and benchmark measurement• ROI, TCO and Value management discipline• Strong business unit collaboration
Focus on Core Competencies• Strategic outsourcing• Higher training and career development spending• Lower staff turn-over, satisfied employees• Culture and mission
Alinean, LLC
Hosted byCIO Top Priorities – Spending Accountability
Prove and improve the value of IT Over 80% of companies now require ROI and TCO analysis to be
performed on most IT investments 65% of companies indicated that they do not have the knowledge or
tools needed to do ROI and TCO calculations 75% have no formal processes or budgets in place for measuring
the ROI and TCO of IT projects 68% do not measure ROI and TCO on IT projects 6 months after the
work is completed.
Do more with less
IT Spending will remain flat in 2003 budgets, but spending backlog is building
Communicate more effectively to stakeholders 44% say either the CEO or CFO is heavily involved in the decision
making process Business units are gaining control over the majority of IT decisions
Sources: IDC, E&Y, ComputerWorld
Hosted by
The TCO of Windows: Managing Costs and Maximizing ROI
Technology investments now hinge less on features and functions and more on finance. - CFO Magazine
Businesses are done with mere technology. From now on, the role of the CIO is to make money. - Paul Strassmann, ComputerWorld Columnist
Hosted by
TCO – Capturing All Lifecycle Costs
Deploy
Manage and MaintainChange and
Evolve
Retire
Plan
3 to 5 year lifecycle
Acquire
Hosted byTCO and ROI – Project Timeline
Total ExpensesAnd TCO Today
Total Expenses and TCO After Project
Project Costs
Total TangibleBenefits
IT Budget &BusinessOperatingExpenses
Revenue Before
Revenue After
Revenue &Profit
As Is To Be
Hosted byWindows 2000 TCO
Windows 2000 TCO
3%
23%
14%
30%
23%
TCO = $6,845 annual per PC
Alinean 2003 – Windows 2000 environment with low best practices
Hosted byWindows 2000 TCO by Category
$2,738
$3,902
Alinean 2003 – Windows 2000 environment with low best practices
Hosted byTCO Drivers
Management PracticesCapability and Maturity
Complexity and Use
Service Levels, Availability and Performance
Up to a 26% Savings with Best Practices
$500 to $1,500 per PC to implement Est. savings of $1,845 per PC/year
Alinean 2003
Hosted byBest Practices
Implementing a cohesive set of best practices can lead to cost reductions of more than 26% in PC TCO
However, need to factor in cost of achieving best practices ….. ROI
Alinean 2003
Hosted byWindows Client TCO by Platform
0
2,000
4,000
6,000
$8,000W
in95
Win
98
NT
W4
Win
2000
Win
95
Win
98
NT
W4
Win
2000
Win
95
Win
98
NT
W4
Win
2000
UnmanagedDesktop
Typical ManagedDesktop
Highly ManagedDesktop
HW/SW
IT OpsAdmin.
End-UserOps.
Downtime
Copyright © 2001
Hosted byMobile Computer TCO by Platform
0
2,000
4,000
6,000
8,000
10,000
12,000
$14,000
Win95 Win98 NTW4 Win2000 Win95 Win98 NTW4 Win2000
Day Extender Road Warrior
HW/SW
Ops
Admin.
End-UserOps
Down-time
Copyright © 2001
Hosted byMigrating to Windows 2000 and AD
Est. at $1,000 per
desktop
PC Lifecycle
• 36 month desktop
• 24 month mobile
Upgrade vs. Replace
• $45 per admin hour
3rd party tools
TCO Considerations:
• System replacements and
replacement labor
• System upgrades and upgrade
labor
• Software Licensing
• IT and User Training
• Migration Labor
• Migration related Help Desk
Calls
• Migration related User
Downtime
Hosted by
Pre-Migration Planning TCO Considerations
• Asset analysis for replacement /
system upgrade
• Develop Business Case
• IT Training
• Identify obsolete users
• Identify expired Computer Accounts
• Identify trust relationship
• Identify Administrator Privileged
Users
• Security Impact (ACL)
• Detecting Naming Conflicts
• NT Service Account Identification
20% of total migration
costs
Administration and
Support Labor
3rd party tools required
Hosted byMigration
TCO Considerations• Windows Migration
System Replacement and Upgrades OS and System Distribution Migrate User Accounts and Rights Migrate Computer Accounts and Rights Rename Machines Directory Updates Updating Access Permissions to File / Print
Services Maintenance of Access to Exchange Preserving End User Desktop and Applications
(Profile) Preserving System Registry Access SID History Cleanup User Training
• Exchange Migration Account creation and deletion User properties Distribution groups and lists Mail forwarding / delivery restrictions User Training
80% of Migration Costs
Systems and Software Costs
IT Ops and Admin Labor Costs
User Training
Downtime Impact• User Productivity Loss
(salary)
• Business Loss (profit)
Hosted byChange Management
TCO Considerations• Software distribution
Remote Installation Services Windows Installer Services SMS System Restore
• Directory and Resource Security and Administration
Create/Delete/Add / Remove a Group or User
Permissions Management Role Based Delegation Changing Directory Security Reset Passwords Change User and Personal
Information Manage Print Queue User Auditing and Reporting
IT Operations and
Administration Labor
Support Calls
Downtime
Hosted byChange Management
TCO Considerations• File Security Administration
Change File Security Service Account Maintenance Visualizing Permissions Searching Replacing Permissions Security Auditing and Reporting
• Group Policy Administration Resultant set of Policies Analysis and Documentation Backup and Restore / Versioning
• Physical MACs Imaging Shipping Staging Standardization
IT Operations and
Administration
Labor
Support Calls
Downtime
Hosted byOperational Management TCO Considerations
• Availability Management Microsoft Operations Manager
(proactive system monitoring and event management)
Microsoft Application Center Advanced Enterprise Server -
clustering/failover System Restore Hierarchical
Storage Management (HSM)
• Security Management Encryption, PKI, Kerberos Anti-virus (requires systems >
300MHz for background anti-virus protection)
Respond and Resolve
Labor
Support Calls
Downtime
Hosted byAsset Management
TCO Considerations
• Maintaining Standards
Image management
Systems standardization
Group policy management
Systems Management
Server (SMS)
• Centralized Procurement
Standardization
Systems Purchasing
Software Licensing
IT Ops & Admin Labor
Hosted by
Customer Services TCO Considerations
• Centralized support
• Standardization
• Remote diagnostics and control
• Password management
• Self-service
• User Training
Support Calls
User Downtime
Low Medium High
Typical Help Desk Costs per Call $15 $18 $25
Typical Call Volume (Average number
of calls per user per month)
1.2 2.0 2.5
Hosted byBusiness Value - Productivity
Mobility• Additional 6-8 productive hours per week
• At Meetings, Road, Home
• Migration from desktops to mobile computers
• Wireless
• Higher TCO by 25 to 50%
Business Agility• New applications
• New business opportunities
• Important in uncertain times
Hosted by
Alternative 1: PC as a Utility
Benefits
• Re-allocate IT Operations and Administration Staff• Improve Service Levels• Increase Availability• Migrate to Latest Platform and Best Practices • No large up-front investment required
Managed Services
Hosted by
Alternative 2: Linux
• Lower Software Licensing Costs• Slightly Higher IT Ops & Admin Costs• Better Availability• Slightly Less Agility
Lower TCO?
Hosted by
Conclusions
Potential 26% savings with a well managed Windows
environment - $1,845 per PC / year
Requires Active Directory and Policy Management
Migration costs average $1,000 per PC
Implementing best practices can cost an additional
$500-$1,500 per PC
Typical payback in 12-18 months from deployment
Other alternatives, such as Managed Services deserve
serious consideration
Hosted byThank You!
Thomas Pisellotpisello@alinean.com
www.alinean.com
• Additional ROI research
• Free on-line peer comparison tool
• Sample reports and ROI/TCO benchmarking and analysis software
Recommended