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?"

Comments

Don't take technology for granted

[AKAImBatman]

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.

Re:Don't take technology for granted

[samkass]

I'm not sure that's a valuable analysis. The company could hire a group to come in and install desktops at every desk with the latest Office software, networking, servers, and even training to use them. Then they pack up and go home. The office hums along great for a little while but as the technology breaks down, reaches capacity, etc., things gets increasingly worse.

What you're trying to do is measure the cost of the "things gets increasingly worse" vs. the cost of having an on-site IT expert maintaining things.

For that, you need to start looking into failure scenarios and risk assessment. That's a complex piece of accounting, and it's not a job for an IT worker to be asked to do. If you're making the IT worker spend time to justify their job financially, you're not being a very efficient company.

Re:Don't take technology for granted

[moderatorrater]

If he's the maintenance IT guy, he needs to take a different approach. He should show the costs with no maintenance IT guy, contracting out to another company, and then show his costs. If he's busy all day, it's guaranteed that he's saving them money. Contracting out will get the job done in the same amount of time, it'll just cost a lot more money. With nobody there, everything he deals with will still have to be dealt with, it's just that it'll have to be dealt with by people slower than he is and not as good at the job.

Overall, he should be able to show at least 40% savings over contractors and 70% savings over everyone dealing with it themselves. Almost everyone here's worked at a place with too little IT support and seen how it kills productivity, so this should be a fairly simple exercise. I suspect that his supervisor will have something to add to his presentation to cater it to the executives, but if the executives don't immediately see the merit of the report, then they would be hostile towards IT anyway and there's probably nothing that can be done.

Re:Don't take technology for granted

[petes_PoV]

But you assume all the processes that IT facilitates are worthwhile.

To follow up on your example of handouts for meetings. Would that meeting take place without IT? What would be the consequences (either: (a) people get more real work done, or (b) something important gets missed and the efficiency of the business drops a little).

Same with email: if the IT dept. wasn't there to facilitate it, more paper memos would be sent, but since these take more effort, the number would be fewer than the number of emails - and they would only be sent (a) when really necessary and (b) to those who really needed them.

However, no IT people doesn't mean no IT. Where there was real value, some people would use PCs, printers, spreadsheets and the like. it's just that they'd have to work it all out for themselves and therefore consider if the pain was worth the gain, rather than having some IT minion do all the labourious stuff for them.

What we have with IT is frequently a case of work expanding to consume the resources allocated to it.

Re:Don't take technology for granted

[Trojan35]

You guys are thinking like IT people, not management.

When management asks you this, they're really asking "What in your job can we get rid of so you have time to do things we think are more important?"

They want improvements, not for you to defend the status quo. Identify frivolous things you maintain, ask that you eliminate those to work on new projects. Use your presentation time to show how the new projects will make the business more productive.

You justify your job by proving you are valuable, not that every task you perform is valuable.

Re:Don't take technology for granted

[DrLang21]

For that, you need to start looking into failure scenarios and risk assessment. That's a complex piece of accounting, and it's not a job for an IT worker to be asked to do. If you're making the IT worker spend time to justify their job financially, you're not being a very efficient company.

Sadly, this is often the position that IT finds themselves in as less insightful business types often only look at them as a non-producing cost to the company. In this guy's situation, I would suggest that his manager should be attempting to do this. This is especially important when an under-appreciated department begins to find themselves to be understaffed as the company grows.

Re:Don't take technology for granted

[Cryonix]

I used to be the sole person in an "IT department" for a small company (>15 computers). I was constantly bombarded each month with requests for justifying my time billed to the company. I eventually had enough of being looked at as a burden to the company rather than an asset. I began classifying the tasks I was responsible for and how much time I spent on each task over a 6 week period. (Tech support, web design, application development & maintenance, software support, pc repair, etc.) After researching the cost to outsource each of those tasks, I extrapolated that to cover a one year period. The cost of my yearly pay was well under the cost of having someone else come in to do those things. I ended up giving monthy reports on where my time was being allocated, but the overal view towards my position was changed.

Re:Don't take technology for granted

[michrech]

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.

Not true. Many companies I've done work for hired me to come in and set it all up. The people that make this type of decision usually view a computer like a VCR -- they believe that, once setup, it should "just work" and not need any maintenance/etc. Plus, there's always "that guy" in the office who setup/built/installed "a computer for his buddy/mom/dad", and is obviously an expert. This guy will ultimately get tasked to do much of the work (I've seen this more times than I have fingers/toes).

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.

Again, this isn't what would happen. Every desk would have it's own printer (occasionally, there might be a network available printer a guy like me might have setup). They'll just print however many copies of whatever it is they need to distribute to people. If they also have an office copier, they'll print one copy and then make as many as they need at the copier. (You can use this paragraph as an answer to your "spreadsheet" excuse, also)

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.

You must live in a weird area if you've seen people do this. What I've seen are companies having their employees either sign up for a "company address" via hotmail/yahoo/google/whatever, or using their own personal accounts. They also install some common IM (MSN, Yahoo, AIM being the most common) to communicate with each other, if they have separate offices.

As far as "presentations" go -- Any companies that actually did this usually have a portable LCD projector, screen, and some sort of laptop (but this has been rare -- most of the companies I've worked for just don't hold these types of meetings). This type of hardware is fairly cheap, can be "locked in a closet", and doesn't require professional (or permanent) installation. To create the presentation? They'll just use one of the office computers mentioned earlier to create it. No Kinko's, no laying everything out by hand, etc.

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.

Billing/reporting? Peachtree/Quickbooks. Run, of course, from the previously mentioned office computers.

Out of curiosity, were you intentionally trying to make this out to be as difficult/primitive as possible? Would you happen to work for a company that makes infomercials? Reading over your post, I was reminded of that stupid infomercial about stacking tupperware where the lady opens her cabinets, starts flailing her hands about inside the cupboard, causing all the existing plastic-ware to fall onto her head. Sounded *exactly* like how you tried to describe how business would work without an IT person.

Writing your own eulogy

[Hadlock]

Sounds like he's trying to justify firing you and hiring you back as an hourly contractor to cut costs. Go watch the part in Office Space where the guy is yelling at the bobs about how he communicates between the customer and the engineers. You're that guy.
 
Good Luck.

Re:Writing your own eulogy

[rdeml]

Take a 2 week vacation and see if everything still works afterward. Your job is to keep everything working. If everything works without you, then you are not needed. If, however the boss balks at 2 weeks without IT support, you are vital.

Re:Writing your own eulogy

[Lord_Frederick]

Exactly. If you are just doing generic IT stuff, then a small company may very well be better off with some sort of maintenance agreement instead of keeping you. Your boss has already realized this and is probably already soliciting bids. Sorry.

Re:Writing your own eulogy

[Omega996]

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.

Re:Writing your own eulogy

[mcgrew]

Hmmm... It's been a few years so I don't remember where I read this, but if you become irreplaceable you should be fired - because some day you may quit, retire, die, or be incarcerated.

No company can afford an irreplaceable employee.

Re:Writing your own eulogy

[Hairy Heron]

If, however the boss balks at 2 weeks without IT support, you are vital.

Or they just let you know when you come back that you are being let go and replaced by someone else who was around to do work for them. Ultimatum stuff like you're advising the person to do never works like people think.

Re:Writing your own eulogy

[Hairy Heron]

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.

Re:Writing your own eulogy

[Fulcrum of Evil]

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.

Cost for NOT having IT?

[FnordX]

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?

Make friends with a beancounter

[dreamchaser]

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.

Re:Make friends with a beancounter

[wild_quinine]

I think that it's important to remember that costs do need to be justified. IT is often underappreciated, but it's also a special kind of arrogance to assume that yours is the one indispensible role in the company.

It's perfectly fair to justify your costs. People seem to think that this means they are being automatically undervalued, or that they shouldn't need to perform such an exercise. Well, I've got news for you. If you're in management then, yes, you do.

Just because your role is necessary does not mean that it could not be fulfilled by someone else, for less.

All well functioning companies are like bowls of water. They may be less full when you take out key staff, but there isn't a hole left behind.

And even if your job could not be done as well for less, it is perfectly justifiable to ask: 'Should we do it less well, for less?'.

And we can all hope that the answer to that question is 'no'. But that doesn't mean that it shouldn't be asked.

How much does it cost ..

[johnlcallaway]

.. 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.

first things first

[gEvil (beta)]

If you are have to justifying IT, I thinking it is firstly important to be answering the question "What is IT?" Only then can you be clarifying the answering of the questionifying of the justification.

Imagination

[sam0vi]

Develop a worse-case scenario. Detail all of the problems that may occur without your system maintenance work (system hijacking, malware, trojans, client info loss, etc), and then write the amount of money each of these theoretical problems would cost the company. now add all those costs. i'm pretty sure you make less than whatever figure you end up getting. buena suerte

5 reasons for any business decision

[prgrmr]

There are 5 valid reasons for any business decision:

1. Legal: laws, rules and regulations
2. Contractual requirements
3. Positive impact to the bottom line by increasing revenue and/or decreasing expenses.
4. Quality of life issue for your customers
5. Quality of life issue for employees

You can look at things like backups and preventative maintenance as addressing both #1 and #3 as matters of risk reduction and business enablement. How much would it cost your company to not have its data? Or to not have access to it for 4, 8, 12, 24, or 48 hours?

Then you can look at the direct costing method: how many projects have you worked on, what were their budgets (capital and otherwise) and how much did your work contribute toward that?

Re:5 reasons for any business decision

[PitaBred]

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.

There is no justification for IT

[Weasel Boy]

Your CEO should buy a Mac for everyone in the company and fire the whole IT department.

Re:There is no justification for IT

[dave420]

Not even that! Just get a single top-of-the-line Mac, put it on a golden pedestal in the lobby, and have it slowly rotate. Play some quiet acoustic U2 from hidden speakers, and your company will never need to spend another dime on IT ever again. A smoke machine and turtle-neck sweaters for everyone wouldn't hurt, either.

Tell him what he wants to hear.

[duffbeer703]

Perception is more important than reality in this case.

simple

[Lord Ender]

The business could not operate without computers. You make the computers work, therefore, 100% of revenue is dependent on you. Your ROI is $revenue/$your_cost * 100 percent. None are more valuable. Ask for either more money or exemption from these stupid and unproductive exercises.

Quantify Work

[Anonymous Coward]

I get the same type of request from my boss. Every 6 months or so he calls me (and my assistant) into his office and asks 'what do you guys DO all day?'. As I try to stifle my rage I explain to him that aside from working on projects he starts, I also have to do DBA, Web, Office Admin...from the purchasing of servers to removing paper jams, we do it all.

I think the problem stems from management not being able to quantify our work, if we spend 4 hours trying to fix a piece of code..and then succeed in doing so, what is there to show for it?

I also think one of ITs responsibilities is to be 'on call' for emergencies, so that does mean when times are slow we will occasionally find ourselves with nothing to do, that does not mean we are superfluous? Walk into your local fire or police station and tell the men and women on duty who happen to be sitting around 'hey, your fired'...then wait for the flames to hit your house.

Maintenance isn't new

[Todd Knarr]

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?

That's easy.

[mweather]

All you do is stop doing your job and wait for everything to crash, then figure out how much money the company lost.

Compare with the present, not the past

[mangu]

Your points about technology saving money are true, but irrelevant. No one is proposing going back to doing by hand things that are currently done by computer.

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.

Re:Compare with the present, not the past

[skelly33]

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.

Re:Compare with the present, not the past

[LandDolphin]

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.

Re:Compare with the present, not the past

[Anonymous Coward]

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.

Re:Compare with the present, not the past

[Adriax]

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.

Re:Compare with the present, not the past

[LandDolphin]

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.

Re:Compare with the present, not the past

[Bandman]

pshaw, how can they call the IT guy without phones ;-)

Re:Compare with the present, not the past

[Archr5]

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.

Re:Compare with the present, not the past

[hazem]

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.

Re:Compare with the present, not the past

[iamhassi]

"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.

Re:Compare with the present, not the past

[AigariusDebian]

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.

Re:Compare with the present, not the past

[max99ted]

I've been doing on-call support for years now and I've found the best way is a subscription service - basically a monthly amount so that I'm available when they call. I service primarily dental offices and base the amount on number of workstations and servers, what applications they are running, and also what type of response time they are looking for. Someone is physically onsite at least once a month regardless - this is what some other small IT shops miss with these types of arrangements. Clients don't like getting a bill and never seeing a warm body onsite.. no matter how good your remote support setup is.

Emergency onsite calls are charged extra at a fixed rate - most other stuff can be handled during the monthly visit and/or remotely. Very few clients want an 'all-inclusive' arrangement where they pay a fixed amount for 'unlimited' service.

We used to do break-fix but found that it was much harder to retain clients long-term. Billing is a pain and sometimes difficult to justify to the client. We also found that the key to staying afloat was to 'cull' your client list every year - drop the 10% that never pay on time, are a pain-in-the-ass, and so on. This frees up time to find clients that you do want to keep.

Keep in mind that my experience is limited to SMALL businesses - biggest client has 45 stations and 3 servers.

Re:Compare with the present, not the past

[sr8outtalotech]

Actually, the right question might be is it cheaper to maintain in house staff or outsource?

Re:Compare with the present, not the past

[nine-times]

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.

Re:Compare with the present, not the past

[Povidius]

I dunno... ask your neighbor? Seriously, there's gotta be a number for your helpdesk!

Re:Compare with the present, not the past

[ObitMan]

almost...
problem clients get billed more or "fired"
they are not profitable
they are damaging to a reputation and to the business relationship.
Fixed monthly contracts can be a bust for both the client and the provider when the situation you presented does arise.

I sell blocks of time and provide routine maitenance.
It's in the customer's best interest that i'm not using up all thier block time as they purchase it at a reduced rate.
This provides the following benefits for them:
Bugeting concerns.
Truer picture of how much they spend on IT labor.
preferred status when problems arise as they have already paid for service.
preferred billing methods, actual time vs incrimental billing.
Fear of calling for service because money is tight thereby letting a problem compound.

For me the benefit is:
Cash flow
Guarantee of continuing relationship provided i perform adequately.
during routine maintenance I can bring things to thier attention.
customer is less likely to "find" inane things for me to work on since the blocks don't expire for a year.
If funds are tight a Customer doesn't wait to call when a problem arises as they have already paid for service.

One question ...

[gstoddart]

This is a fairly simple question: if your mail/DNS/storage/internet link/print queue goes down, how long would it take for someone in the organization to fix it, or (failing that as an option) how much will it cost to bring in an outside contractor to fix it, and how long will you be down for??

You'd have to be an awfully small shop with a lot of people who can do all of your tasks before most places could realistically get rid of their IT people -- doing so would mean that the first technical glitch would mean you're dead in the water. Heck, if you're a small enough shop, complete failure could be catastrophic to your business.

Having said that, that doesn't mean some companies might not seriously ponder getting rid of IT and then get blindsided when they discover why they had it in the first place. Companies make short sighted decisions all the time.

Pro-actively trying to justify your existing by coming up with your own metrics is a suckers game. It means someone will then try to use your own damned metrics to squeeze more out of you or do the same with one fewer people.

If your organization has no idea of why they have IT people around and why they're of value, you're already in deep trouble.

Cheers

leave

[BigJClark]

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.

Re:leave

[Anonymous Coward]

Odd, can't login.

I recommend leaving as well. I am the founder and CEO of a Chicago-based IT firm, and we quit immediately if our labor hours are questioned. One of our largest customers asked us to defend our hours last year (a $300,000 contract for 2 employees), and I gave them our 30 day notice. They let us go immediately.

Within 3 months they were calling us back. We refused without a 50% increase. They refused. As of today, we have the same 2 employees back at that job at $430,000 a year.

If you are undervalued, leave. Always leave. And don't go back until you are overvalued.

Re:first things first (answered)

[FuckTheModerators]

It's IT.
What is IT?
IT's so cool, IT's so hip, IT's alright.
IT's so groovy, IT's outta sight.
You can touch IT, smell IT, taste IT so sweet.
But IT makes no difference cuz IT knocks you off your feet.

The devil is in the details -- Get some metrics!

[lucm]

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).

Ask him...

[Angostura]

how you should justify the cost of the time spent calculating the cost.

Unplug everything

[Toe, The]

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.

By prevention of lost work hours perhaps?

[Drakkenmensch]

It sounds like you do a lot of preventive maintenance. Now what you might want to look at here is how much income would be lost for the company if their employees sat around waiting for an outsourced tech to come and fix their systems, as opposed to having you on staff, PREVENTING those lost hours.

Reality check

[Slicebo]

"When in this position what do you folks usually do?"

I usually start looking for a new job.

Trying to Boil it down...

[Bobfrankly1]

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.

How valuable is the Fire Department?

[aitala]

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

Start printing copies of your resume at work

[topham]

You've been asked to justify your cost. Here's a hint: Your BOSS needs to justify your cost, not you. Not to say you don't need to have input into the situation, but he's asking you for the wrong thing.

Next, Start fixing up your resume. It's likely you will either get hit with a paycut, or one, of the two of you will be let go. It doesn't matter if they can't survive with only 1 of you. They will toss one of you, outsource the rest, pay more and regret it, but you will still be out of a job and they won't bring you back.

Re:Start printing copies of your resume at work

[bertok]

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!

You're a lawyer

[RyoShin]

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.

Valuing Yourself is GOOD

[clawhound]

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.

Bad Idea

[FooGoo]

Usually, I don't recommend doing something like this unless management is asking for it. You should not have to justify your existence...you already have a job. When management gets the numbers just beware that when the next salesman comes in you may get outsourced.

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.

Justify maintance

[r2rknot]

Get a conservative estimate on how long the equipment/services would go without intervention. Say it would last 1000 hours without anyone touching it until it went down. This might not be realistic, but you get the idea.

Then make a conservative estimate on the amount of time to correct the issue. Say 48 hours to bring it back to its previous condition.

1000 hours is roughly 42 days. Found out how much money or funding is made in that time.

This is the hard part, how does your piece of equipment or software integrate to the 'mission'. If it only has a marginal impact on the the company, or has a non-quantitative impact, you will have to justify it in how less effective the company would operate without it, and assign a fair value to it.

Once you have this amount, tell them how much it will cost to be down for 48 hours. You might also add in costs for having outside assistance to get it up in 48 hours.

That amount is what you save them with your preventive measures.

I use this to write EPR's (Enlisted Performance Reports) for my subordinates to highlight how their work has an impact in a dollar amount.

Start with downtime cost

[stargazer1sd]

While it's tempting to look at the cost of providing the service, that's only half the story. A good IT department is graded as much on what doesn't happen as by the projects they accomplish.

I would start by calculating the downtime costs of the systems you maintain. Start with the direct labor idled, then work out to indirect costs. You'll need help from the business managers, but they will almost always help you because this makes their value tangible too.

You can profitably use this information for deciding where to spend your future efforts, so don't be afraid to get into things like average burdened labor rates, catch-up costs, lost orders, etc.

After you gather that info, start figuring the costs of your average failure. If you really need to be there, that number will be large relative to your cost.

This is way out of the realm of your usual IT work, so it will feel awkward at first. But, if you can get the hang of it, you'll be making much better day to day decisions.

If you get really good at it and can stand wearing the occasional tie, you can be a highly paid consultant.

Do they really need you?

[Bilbo]

Try going on vacation for two or three weeks and see how many people are tearing out their hair trying to get their computers to function normally when you come back. Something tells me that should answer anyone's questions....