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Economics of Managing your IT Infrastructure

16 Sep, 2009 By: Robert Johnson imageSource

Economics of Managing your IT Infrastructure

Most companies, including your clients, need their key business applications
running around the clock since their customers, employees, and other
constituents need access at any time.  Maintaining an “always on” network is no
small task.  To minimize downtime and frustration, the infrastructure must be
constantly monitored and the team must have ready problem solving strategies in
place.  Managing a solid infrastructure requires skilled IT people, effective
processing, and advanced technology. 

The “Always On” Business Imperative

Customers want to buy products and services, manage their accounts, and
check order status at any time.  Employees must communicate with customers to
service them as well as collaborate with colleagues to meet business and market
demands.  For example, university students, faculty and staff want access any
time, on demand to course registration, on-line courseware, student records, and
other systems.  Bank customers want round the clock account access to check
balances, pay bills and complete other transactions.  For obvious reasons,
hospitals need immediate access to clinical and pharmacy systems, patient
records and other key systems.

Having an IT infrastructure that’s “always on” is a necessity for most
companies, regardless of industry sector or size. An “always on” infrastructure
must be:

• stable (e.g. high network throughput for both voice and data traffic)

• secure (e.g. prevents intrusions and data losses)

• efficient (e.g. lowers the cost and effort to manage network and systems)

• compliant (e.g. alerts when changes impact regulatory requirements)

The Cost of Unplanned DowNTIME

Unfortunately, most companies experience more unplanned downtime than they
want. Achieving uptime of 99% is impressive but that 1% downtime is 87 hours per
year!  Studies show that unplanned downtime costs at least $45 per hour per
employee. A 2008 Standish Group study says downtime  costs for a company’s ERP
system is $350 per hour.  A 1000 person company that experiences unplanned
downtime of 1% would be impacted with at least $3.9 million in lost revenues,
unhappy customers, lower productivity and grief. 

Reducing Unplanned Downtime With In-house Resources

As noted above, a high performing network infrastructure requires
monitoring, managing, and ready problem solving.  Monitoring the infrastructure
involves detecting and validating faults, then isolating them.  This begins the
problem resolution phase.  In many cases, a company will need vendor technical
support to get back up and running. Working with a vendor that’s responsive and
highly competent will greatly shorten the problem resolution phase.  Tracking
problems with a trouble ticket system will eliminate extra time and effort. 
Proactively managing and optimizing the infrastructure includes activities such
as tracking assets, archiving configurations as well as changes particularly for
regulatory requirements and bandwidth optimization. To accomplish these tasks
requires having skilled IT people, effective processes & advanced technology.


A company will need moderate to high levels of network & systems expertise
along with strong problem solving skills.  We estimate that to hire, motivate
and retain such people will cost approximately $75k per year (which includes
benefits and overhead costs). The network engineers must be willing to cover 2nd
& 3rd shifts / weekends, especially for critical unplanned outages. Also need
people / cost for maintenance contract administration, which can be significant.


A company will need to establish & manage the schedules for 24x7x365 coverage as
well as document procedures resolving problems, managing proactively; optimizing
infrastructure performance.


A company will need to invest in tools to monitor and manage proactively,
the network and systems (e.g. automated network compliance, change and
configuration management) plus the associated training & maintenance contracts
for these tools.  There are also costs for the annual maintenance contracts for
the network and systems hardware and software.  Some companies have adopted
shareware for monitoring and managing their networks to lower costs. These
tools, however, restrict functionality and limit their effectiveness. 

The cost & time for in-house infrastructure management is a major
consideration. The costs vary by the size of the company.  For example, if you
have 100 employees, our studies indicate you’ll need one network/systems manager
primarily dedicated to managing your IT infrastructure, which with process and
technology costs will be about $120k annually.  If you have 500 employees,
you’ll need two dedicated network/systems managers, which with process and
technology costs will be about $320k annually.  If you employ 3000 people,
you’ll need about 7 network/systems managers plus process and technology to
manage your infrastructure around-the-clock which will be about $815k annually. 
The benefit of in-house infrastructure management is that it’s completely
customized to meet specific needs and controlled by the company.  Unfortunately,
it’s usually the more costly approach.

If a company hasn’t invested significantly in in-house infrastructure
management, they have an attractive alternative.  The technology services or
solutions provider to supply round the clock infrastructure management.

Robert Johnson is Director of Product Marketing, Atrion Networking Corp. &
is responsible for market  analysis, developing new products, managed services/
business.  At  www.atrion.net or
401-736-6400 x 4336.

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