How Do You Justify the Existence of IT?
bakamaki writes "I work for a small manufacturing company as a SysAdmin. My boss is a DBA. We are the only IT employees. He recently decided to record hours spent on his projects and then evaluate how much time the databases he writes save the employees. Then he translates that into a $ figure. He's asking me to do something similar but I'm kinda at a loss. It seems most of the stuff I do is preventative, IE care and feeding of servers and network infrastructure in addition to all the break fix stuff I do for the user base with their desktops. When in this position what do you folks usually do?"
n/t
That's because you're taking technology for granted. If you weren't there, that technology couldn't be deployed to help people get their jobs done. Which means no servers, no desktops, no laptops, no networks, no printers, nothing, nada, zip, zilch, zero.
Now all you have to do is compute how much it would cost to get common tasks done. Take handouts for a meeting as an example. Right now I'm sure that the employees type up the documents then print a few copies off the printer. Since we're talking about modern wordpressor technology, it would take them 2-3 complete, hand-written (or perhaps typewriter typed) drafts to develop the same document. Then they'd need to run the final document through the copy machine for the number of copies they need.
How much would all that labor cost?
That document would then have to be backed up into filing cabinets. Take a rough estimate of the number of documents that go through your system. Work out a figure for how many documents would fit in your average filing cabinet. How much would those cabinets cost? How much would the extra floor space cost? How much would staff to manage the filed documents cost?
Now on to email. Remember inter-office memos? Back when entire mail departments were needed just to distribute memos between employees? Find out how many employees usually staffed these mail rooms. Add to this the cost of inboxes on desks, mail carrying equipment, space needed by the average mail room, and/or (if your company is really big) the infrastructure cost of pnuematic tubes.
Does anyone in your company do spreadsheets? Imagine if they had to do these sheets by hand, on paper. Figure out how many seconds it would take you to do a spreadsheet calculation by hand. (Perhaps with the assistance of a calculator.) Take that time and work out a cost per calculation based on some common salary. (e.g. $100k/yr) Now multiply it by a few hundred to account for the dozens of calculations in a spreadsheet that must be calculated and recalculated for each change to the document. That is the cost of a single spreadsheet.
Presentations... remember overhead projectors? What you want to do is compute the cost of overhead projectors, plus the cost to have a third-party like Kinkos print up a set of transparencies. Take the number of conference rooms, multiply by the cost of an overhead projector. Estimate the number of presentations per year and work out what it would cost to print, say, 50 transparencies per presentation. Multiply those figures and add to the previous overhead projector figures.
I haven't even gotten into subjects like billing, reporting, and other data processing. Feel free to work out the cost of mainframes or (even worse) a small army of accountants and typists.
If you're following along so far, you should already have a rather significant figure. One that should dwarf your IT budget. And you should also have a greater appreciation for why corporations of the 60's and 70's were so amazingly big.
Javascript + Nintendo DSi = DSiCade
Possibly something like "How much IT infrastructure saves your other employees in hours worked"?
Then make the point that someone has to maintain all of that stuff in order to keep all of those employees working on what they need to be doing instead of figuring things out with clipboards and calculators?
____________________
Clouds in the Sky,
Water in a bottle
Make nice with someone in Finance/Accounting/etc. and get statistics on what the average productivity figure is per worker for the various functions that make up the company. From there you can calculate not only the cost of downtime but also the improvements in efficiency when common tasks are made easier via the databases/applications that are deployed.
.. when things DON'T work. If the email server is down, how much does it decrease efficiency of communications. If the web server is down, how much revenue is lost? Or how many existing customers do you lose or prospective customers that go away? How much extra work does customer service get when the web site is broken?? If my desktop doesn't work, how much is the company spending for me to sit around doing nothing. That is the value if IT infrastructure.
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
Perception is more important than reality in this case.
Conformity is the jailer of freedom and enemy of growth. -JFK
If it's a manufacturing company, point to the machines on the production line and the routine maintenance (oiling, cleaning, checking) that gets done on them. How much does that maintenance improve productivity? How much time does the maintenance guy's work save other workers? And what happens to the company's output when that maintenance doesn't happen?
Or, for a more graphic example, point to the restroom. How much time does having the janitor clean it save other employees? How much does that cleaning contribute to the company's bottom line? And what are the consequences if the restroom isn't cleaned every day? Or the trash cans emptied, or the floor cleaned?
Leave. Don't let any employer ever undervalue you. If he thinks he can do better without you, give him that chance. Educate yourself and put yourself in a better position with a better company. If the economy is shyt where you live, move. Become this private contracter and work on multiple projects. Or start your own consulting company. Or hire on with NoName company that has excellent benefits and work/life balance.
Hi, I Boris. Hear fix bear, yes?
i hate to agree with thread parent, but i think he/she's right. the last time i worked at a company that did this, they terminated roughly 31% of the IT staff after the whole thing.
The only way I can think of that you could realistically show how much money you're saving is if you figure out how much money the company would lose per minute/hour/day/whatever that the services you maintain weren't provided.
i know it sounds glib, but what you should be doing is looking for another job. Any time someone wants you to 'justify' your time spent, that means that they're looking for ways to cut costs, and that you (or a portion of your department, in a larger environment) are on the short list. Just be prepared.
There is only one way to justify a cost center (like IT): metrics. Metrics can't be pulled out of thin air on a Friday afternoon, so you need to get them as you work.
The easiest way to do so is to setup a ticket system; there is plenty of free products out there, my favorite on Windows being BTNet. Once you have the system setup, you nicely ask people to send their support requests at at specific email address (which will feed the ticket database -- a built-in feature in most products). And for the users who don't comply, you do it yourself (do not add burden to end user while you start fishing for metrics). As for the stuff you do on your own, create tickets as well, in a specific category.
Once the requests are in the system, make a good follow-up (categories, statuses, notes, etc) and make sure to show this to your end users. This will bring two benefits: on one hand people will happily see your workload and where their request is located in your pipeline (and bugger you less), and on the second hand you can organize your day more efficiently.
After a while, the opening and closing of tickets will provide you with *metrics*; that is, figures that you can show your boss (even charts). Keeping metrics is almost magical, because in a few Excel manipulations you can build a business case, like: "I spend 5 hours a week debugging this printer, if we change it for a new model it will be paid for in X months". This shows your manager that you are a business-wise IT guy, which is a valuable skill.
Then the big splash: build a performance dashboard. A performance dashboard can be as simple as a Excel worksheet where you list your most important metrics: hours spent on end-user supports, average response time, hours spent on hardware maintenance, hours of unplanned downtime, etc. Those metrics are called KPI (Key Performance Indicator) and they can provide a basis for your management to evaluate your work. A good dashboard can be great to make goals (reduce response time by 1/2 over the next three months) or to spot biggest cost centers.
If you provide your boss or the management with a weekly or monthly dashboard they will be able to figure out what you do -- much more than a louse Todo.txt and a "BTW I also do such and such". With solid figures, the management will think of your work as a business item, and that one time when the big boss came by your cubicle and caught you reading comics won't have such a negative impact, because your work is clearly defined in the dashboard.
Of course it is possible that bringing numbers up will show that you are, indeed, redundant. If so, then at least you can use this experience as a great tale for future interview, to display your level of professionalism. And getting a bit of management experience is always good for a resume.
Once you have metrics you can define what is the most critical aspects of your work; this is called a KPI (Key Performance Indicator), and any decent manager will be completely comfortable with a nice Excel dashboard filled with KPI -- much more than with a bunch of Todo.txt files and "BTW I also do X an Y".
The first thing to do is to setup a ticket system. There are plenty available for free; on Windows my favorite one is BugTracker.Net (http://ifdefined.com/bugtrackernet.html).
lucm, indeed.
Unplug all the servers and clients for a day, and calculate how much that costs. Now tell him you work every to prevent that from happening.
"When in this position what do you folks usually do?"
I usually start looking for a new job.
Yeah, because it's so hard to replace IT people. The guy would be fired in a few days and replaced by another IT monkey that can do his job and most likely for less pay. There are few ways faster to get yourself fired then to do stupid shit like you're advising. Plus I doubt he's going to like such a reputation following him around for subsequent interviews that he was abandoning his job in order to make a point.
I had a similar thought except that I acknowledge that nobody else is competent enough to solve their own problems and ultimately need someone to call. If you are not on staff, then the call would be going to an outside contractor/consultant. IT is a necessity whether on staff or contracted. So, what would the going contractor rates have cost the company for all the break-fix type work you've been doing, not to mention the preventative actions? I guarantee it would be a fortune that easily justifies your position.
I see a lot of "take a vacation" or "leave and them them call you when they panic" comments. These are really bad ideas, but they all point to the real issue. To determine the benefit and cost-effectiveness of your employment in the company, what you really need to figure out is the cost of your absence.
It's difficult to see the benefits of your being there when everything runs along happily, so you want to evaluate the consequences of your job either not being performed, or being performed at a lower level or with a slower response that would be consistent with an outsourced IT support company.
Whats the cost of a delayed installation of a security update that keeps your data functional and secure? How much is the cost of mismanaged backups? How much does 2 hours of downtime cost compared to a day or two? If servers are involved, you get to multiply the numbers. This is just some hints, but as you go about your tasks, ask yourself: "What would happen if I DIDN'T do this?" Those answers would likely help you put this together. Just remember to boil down the techie speak if your management does speak "tech".
Microsoft was big on selling "solutions" rather then "features". Try not to focus on system failues, focus on the consequences of those failues (inability to communicate, deadlines missed, sales lost, idle employees, etc)
Hopefully this makes sense, I'm getting off my soapbox now. TGIF.
Ask him, "How does one justify a Fire Department if your house has never burned down?"
Find out how much product, in dollars, your company produces in one hour on a typical day. That is you max value per hour. Then find out how many people it takes to produce that product. Divide the big total by this number. This is your dollar per person per hour value. Now multiply by 8, then by 5. This is your dollar per person per week value.
You see where I'm going...
E
Eric Aitala
www.f1m.com
Depends
Sure, they bill 3 - 4 times the hourly rate (or more). But you don't have them working for your 40/week. There is no benifits, insurance, taxes, social security. An employee costs the company a lot more then just their hourly rate.
For many smaller companies, paying someone to put out fires as they happen is cheaper then having someone inhouse.
Spelling and Grammar errors have been added to this post for your enjoyment
Yeah, sure. And when their PBX goes down because of some obscure network issue, they are now out of communication for two hours while the "IT Guy" shows up. Or when the boss's hard drive stuffs up and he is now out of commission for two hours waiting for "the IT guy" to roll in from whatever previous appointment he may have been. There are a thousand little examples of things someone on-site could handle immediately. Calculate that against the downtime incurred by having to call some outsourced doofus every single time something goes wrong.
Plus, if you're a small business owner and you know nothing about technology, you have no way of knowing if the outsourced doofus is worth a damn. I deal with these people every single day, and the majority of them have virtually zero knowledge of anything other than basic, basic Windows problems.
Because they can open a command prompt and use ping, they look like IT Gods to the hapless businessman, but these people can't do basic network troubleshooting or administration, have no concept of how the internet works, how devices communicate with each other, software patching (not even writing -- just applying), or anything else. They're happy to take their 100 dollars an hour and skip away after calling someone else to solve the problem, but really, if it can't be fixed by rebooting Windows, most of these Geek Squad rejects are just as helpless as the person who hired them to take care of it.
On the other hand, for a modest salary, you can keep someone with a brain around full time to take care of the day-to-day BS and deal with major problems when they arise, with significantly less downtime, back-and-forth finger-pointing, and the other crap that goes along with third-party IT dweebs.
An in house tech can fix problems faster than an outsourced tech, and has an interest in getting things back up properly not just patched together.
So not only factor in the hourly cost, but also take into account travel time, system familiarization, and the tech's vested interest in keeping the calls coming. All that equates to lost productivity, which can kill a small business at crunch time on a big project.
I don't suffer from insanity, I enjoy every minute of it!
This might not apply to your specific situation, and is meant more for higher ups, but may be of use, anyway.
If someone asks you why they should have IT, ask them if they have a lawyer either on retainer or employed full time.
Any large company worth its salt will have at least one. So, ask them if they are currently being sued or the government is investigating them. Probably not. Ask them, then, why they have the lawyer. They obviously don't need his or her services right now. They'll respond with something about ensuring the company is following the law, watching for copyright issues, drawing up contracts with terms only lawyers can understand, and so forth; basically, preventative maintenance (that includes the contracts). Point out that they are mostly preventative maintenance, and that the IT department/your job is exactly the same thing: you ensure that operating systems and software are regularly updated ("following the law"), plugging security holes and ensuring any government compliance you might have to follow ("drawing up contracts", sort of), and making sure the company is running at optimal efficiency with regards to technology ("copyright issues", or protecting your stuff).
If it's a small company (as your situation states), they might have a business card or three, but otherwise might not have a regular lawyer; they hire one when one is needed. In that case, IT is probably the same way, best done by some third party that's called in now and then and does a visit once a month to do regular upkeep.
Obviously, suggesting your role should be outsourced doesn't work well for you. So, to justify the maintenance, try to find disaster stories from similar-sized companies (or even somewhat smaller ones) to say "without my work you could be in this same situation". Start with sites like TheDailyWTF, which has a few entries about that kind of stuff, then go to various online tech magazine (a sister site of /., or CNET, or something) and do a bit of research. Then include the amount of man hours you save employees by being on hand to fix problems as they arise, rather than them having to wait for someone to drive in: Average the hours spent fixing something over three months, double it for an external worker (aside from driving, they won't be as familiar with everything and one, so it will take them longer), and show the difference (multiplied by hourly wages) as money you save the company.
Some "On-Call" IT companies get a monthly fee to make sure everything runs smooth. IF they were to simply "patch" the errors, and let them happen all of the time they would quickly find themselves replaced.
Because those "On-Call' IT Companies handle many different companies, it is often more profitable for them to keep the systems up and properly because they can increase how many companies they can provide service for without hiring more IT people themselves.
They want things not to break down as much as the company that hired them does. BEcause thne they get a monthly check without having to talk to manyone.
Spelling and Grammar errors have been added to this post for your enjoyment
I think that too many folks here are overreacting. These are difficult economic times. If you are not justifying your job, and selling that justification before trouble hits, then you might find yourself on the street. Better to brush up on selling yourself before things get bad. Fortunately, you have a boss who is watching your back. When trouble comes calling, he'll have your prepared. I do IT support. What I do is akin to oil in an engine. With me, everything runs smooth. Without me, things can crunch to a halt FAST. - You intervene while troubles are minor, preventing problems from cascading from small issues to big issue. - You can do things quickly where untrained people take far longer. In one day, you can help eight people who would use eight hours of their time being non-productive. Non-productive people start dragging in more people, which amplifies the drag on productivity. - Your company has secrets. They need to trust the person with the keys. You can't buy that from a contractor. - Most industrial systems are specific enough that you can't hire any available contractor. You need someone who knows the system to ensure that the system works in a timely manner. For example, Linda the secretary can't print. She talks to another secretary. They then call Bill from accounting who is good with this stuff. Bill's not sure either. $15 hr secretary + $20 secretary + $25 accountant = $60/hour, and the boss gets the report late. You can do the same thing for $40/hour and fix the issue in 10 minutes, allowing the boss to get the report. As someone else said, this is work that needs to be done. Getting rid of the worker who does this will not make the work go away. Any employee can sweep the lunchroom, but not every employee should have full access to the accounting system.
Exactly. Most contracted on-site technicians charge a Minimum rate for even the smallest jobs. The place we go through charges $150 per hour with a half hour minimum charge even if the fix only takes 5 minutes. So if I were you, I'd put all of your "urgent" issues in one bucket and "bill" them individually based on time spent as if you were a contractor, start them at $75 for even the smallest 5 minute fixes and go from there. Then take your preventative maintenance stuff and add it all together and charge that as one flat fee (since conceivably your company could call in a contractor once a month to spend all day (or a few days) doing preventative fixes and maintenance. but it'll still cost them more than you make an hour to be sure. Just stress when you're done that you're giving them a simplified breakdown that also involves them waiting on a tech to be scheduled and having little to no recourse if that tech makes things worse or isn't skilled, the opportunity cost of Not having you, a person who is familiary with their systems, on site at the moment of a break/fix type failure puts their costs into complex accounting figures that you're not capable of coming up with without spending hours doing calculations. Good Luck, Sounds to me like your boss might be one of the few out there who is actively trying to prove your value and get you a raise.
The right comparison, IMHO, should be between how much your salary costs, compared to how much would be spent if everyone did by themselves the work you do. Compare the productivity of office jobs supported by a well trained professional to the productivity of unsupported amateurs.
I used to work in an engineering school that also had the CS department (I was one of the IT guys). At one of the faculty staff meetings they were trying to find ways to save money and someone proposed that the CS profs take over IT so they could get rid of me and my boss.
One of the CS profs retorted that it would be just fine and they'd be happy to do it when the civil engineers cleaned the toilets, the mechanical engineers fixed the windows, doors, and heating system, and the electrical engineers changed the lightbulbs. Thankfully, the proposal died a quick and quiet death.
You could also justify "in house" IT by evaluating the costs of outsourcing all the work to contractors.
Sounds like you read some business advice and completely misinterpreted it. If you're irreplaceable, then you should be made replaceable if practical. If not practical, then steps should be taken to limit the scope of impact if you're hit by a bus. For instance, documenting how things are set up in the server room and what needs to be done each month/quarter/year.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
"So, what would the going contractor rates have cost the company for all the break-fix type work you've been doing, not to mention the preventative actions?"
Exactly. If your position wasn't there, who would step in and make the repairs? Contractors, geek squad or similar.
To calculate what you are worth, simply keep a log of all the tech support calls you do in a week. Anytime you help someone, regardless of how small, or restart a server or fix a printer or do anything tech support related at all, write it down. Then call some tech support contractors and ask how much they would charge for the various tasks, but pretend you're dumb and you're really having that problem, ask them how long it will take to get to your office. Remember to calculate the length of time it takes them to arrive as loss productivity for the employee or employees, because a printer problem affecting the entire office means no one can work. Then do the math.
I think you'll quickly see your monthly paycheck would be spent almost daily if they were to call contractors all the time, and the amount of money the DBA is saving will look like nothing compared to your position.
my karma will be here long after I'm gone
You should know the numbers but never provide them to senior management unless specifically asked for them...and when they do ask for them its a good idea to start updating your resume.
People who bite the hand that feeds them usually lick the boot that kicks them
For preventative tasks (which should be where a good sysadmin spends most of his time) I have two words - "risk assessment". Make a table of risks that you are preventing, probability of these risks occurring if your preventative actions are not taken and cost if the worst possible outcome strikes. Multiply and sum as appropriate and you will get a very nice looking figure of prevented cost.
It'll keep being that way as long as economics lessons are from the 80's... I see a couple flickering lights of people realizing that it's better to build a strong business, but for every one of those, there are twenty that would rather make a dollar today instead of $10 tomorrow.
My blog. Good stuff (when I remember to update it). Read it.
Think of it this way--- How much time do you spend preventing something that would cost more time in the long run?
Do you spend 16 hours working on a disaster management and recovery solution, or do you have a consultant come in and
A. let a consultant take 30 hours at $190 an hour (low end $95 an hour) to do the same task?
B. Wait til the shit hits the fan, spend 40 hours in 2 days recovering everything?
C. Call a consultant to come fix it?
It's not exactly how much you need to justify your existence in terms of hours and what you do as it is showing the cost of having someone else come in and do it.
Except as the grandparent pointed out, you are now doing your own job, and your bosses' job too, and the best possible outcome is that you merely keep your old pay while working harder to hold on to it.
The worst outcome is that you're fired anyway, despite years of contribution to the operation of the business, because your boss is an idiot. Believe me, he'll keep his job. He'll even get a bonus for reducing IT costs.
When everything goes to shit a few months later, he'll hire contractors to do your job for 3x the cost.
I should know. I'm one of those contractors!
Actually, the right question might be is it cheaper to maintain in house staff or outsource?
You could also justify "in house" IT by evaluating the costs of outsourcing all the work to contractors.
I think that's the real answer here. The work has to get done somehow, so if you want to justify the cost you're paying, compare it to the alternatives.
At the same time, there's another problem in that people might not understand that they work has to get done somehow. I've had jobs before where some people assumed I didn't do much, because most people generally don't think too much about it when things are working. I've seriously had someone say to me once, "Your job is easy. You don't do anything. All our IT stuff just works." I really had to explain, "No, our IT stuff doesn't just work. It works most of the time because I set it up properly and maintain it all. There are regular problems, but you don't pay much attention to that because I fix it."
I used to make the mistake of quietly fixing things and not drawing attention to how much I'd done. You don't have to be a drama queen or anything, but if you really want people to understand how valuable you are, sometimes you have to be open about all the things you deal with.