The Hub Commentary_

Calculating ROI and managing costs in the data center for Business Service Management (BSM) projects is difficult.  In fact, I was asked this question so many times that I put my META Group analyst hat on and said, “Michele, what would Herb tell you to do?”  Yes, the very same Herb VanHook who is featured in the BSMDigest this month.  He would say create a model to calculate it and thus I did.  Anything that improves processes and does not remove people, hardware or software from the environment is really cost management.  This is still a good thing and needs to be recognized and justified and can be done quite simply.

What makes virtualization and cloud computing so appealing in the early stages is that it removes hardware and better utilizes hardware and software licenses and thus has a hard dollar impact early.  So let’s turn the tables, I posted a news piece that spoke of the same costs of outages that I have used for years now – $100,000/hr is what it costs for a mission critical system to be down.  10 hours per year =  to $1M, so Michele, cmon scale it, ok the usual metric is 1-2% of revenue to consider the size of your organization.

The insurance policy is your BSM strategy which is reliant upon the integration platform that brings together the bits of data into a meaningful view as services.  I also venture to guess that most solutions start at <10% of that outage and the automation they bring to the table helps to shift the resource utilization pie in favor of using resources to new and growth projects versus monitoring the screen for events more than paying for itself in it’s early adoption.

I’ll post my ROI calculation method very soon to give you a real idea what you are losing by postponing you BSM practice.

Michele

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Often, IT budget costs appear expensive as a result of being inflated by arbitrary allocation and loading of costs that should be shared or are otherwise improperly assigned. Unfortunately, old habits die-hard and the misallocation of costs continues to the detriment of both the organization and mainframe computing.  (Read Full Article…)