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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?"
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.
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.. 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.
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.
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.
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.
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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.
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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.
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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.
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.