question to all you network admins out there....

[hulkster]

this is basically a corporate business question, and mainly for those who have staff under them in an IT department. 

emails are sent out all the time from different departments where i work about how much money they made/saved because they are able to do that.  for instance, an email is sent out to everyone...."Bob's department made the company an extra $5 million because they hired 2 extra people and were able to meet such and such goals.  hurray for Bob's department, keep up the good work!". 

im the network admin here where i work, and i would love to be able to send out emails like this congratulating my dept. on making the company more money, or showing we upped productivity 12% by updating this software. 

for instance, i was talking with our CEO on the golf course the other day, and i was telling him about some new software we are getting for network management and how it will be so great.  and the first thing he asked me was "wow, how much will that save us over the next 2 years??"  and i had no idea how to answer that.  i would love to be able to say "it will save us X amount of dollars in the long run" and thats not so much the hard part, but the hard part is....how do i calculate the productivity increase for the company after updating or installing new software? 

this is a bad example, but lets just say that we've never used MS Office before and everyone has been typing in Notepad for the last 5 years.  (i know its far fetched but stay with me)  so i introduce MS Office and now all of a sudden everyone can save spreadsheets, and type docs with bullets and do powerpoint presentations, etc. etc.  you get the idea.  how do i calculate how that will increase productivity?  it obviously will increase morale, and increase the speed in which people will do things and the ease of things (dont bash on MS right now...i know they arent perfect)....but how do i turn all that obvious stuff into a concrete percentage increase or figure or a graph to show the CEO?  anybody have experience with this kind of thing?

[ChadTower]

What you're asking is pretty much "what do I learn from an MBA program", if that helps any.  They're not simple questions to answer.

[shardian]

Just make up a number like all the other guys posting congratulatory notes are doing. 

[Chris G]

I'm not a network admin, but I used to do financial analysis for IT projects like this at our company.  You will likely need help from someone in your Finance department to do this with any credibility.

Most of these projects do not MAKE money, they SAVE money, as you said.  So you need to look at which costs could be impacted... labor, contractor costs, licensing, etc. and come up with some relevant metrics which can be translated into periodic cost savings.  Of course, you also need to take into account the costs to implement (capital) and maintain (expense) the new solution, which offsets the savings.

Continuing the word processing example, you might find out how much time is spent doing word processing in a given period.  Then derive some percentage time savings of using Word vs Notepad.  By applying that %age to the total cost of word processing, you could show that as the benefit.

I've found that, especially in a large company, the cost savings is often not the ultimate determinant of whether a project is accepted, but rather for some political motive - i.e. makes the customer (internal or external) happier or maintains some relationship with a vendor.  This may not apply as much to a "techie" back-office upgrade, however.  Most of the time, the assumptions are complete BS and the project managers just come up with something that the execs want to hear to make them feel justified in approving the project.

Nice that you can get out for a round with the CEO - lucky dog.  

[hulkster]

What you're asking is pretty much "what do I learn from an MBA program", if that helps any.  They're not simple questions to answer.

heh,  yeah thats probably what i need...but i was looking for something more on the FREE variety 

I'm not a network admin, but I used to do financial analysis for IT projects like this at our company.  You will likely need help from someone in your Finance department to do this with any credibility.

Most of these projects do not MAKE money, they SAVE money, as you said.  So you need to look at which costs could be impacted... labor, contractor costs, licensing, etc. and come up with some relevant metrics which can be translated into periodic cost savings.  Of course, you also need to take into account the costs to implement (capital) and maintain (expense) the new solution, which offsets the savings.

Continuing the word processing example, you might find out how much time is spent doing word processing in a given period.  Then derive some percentage time savings of using Word vs Notepad.  By applying that %age to the total cost of word processing, you could show that as the benefit.

I've found that, especially in a large company, the cost savings is often not the ultimate determinant of whether a project is accepted, but rather for some political motive - i.e. makes the customer (internal or external) happier or maintains some relationship with a vendor.  This may not apply as much to a "techie" back-office upgrade, however.  Most of the time, the assumptions are complete BS and the project managers just come up with something that the execs want to hear to make them feel justified in approving the project.

Nice that you can get out for a round with the CEO - lucky dog.  

well i dont want to read off total BS if i can help it.  the numbers the other depts. put out are not BS, because they can actually chart how much product they sell.  if i deploy a faster printer, its hard to say "hey Mr. CEO, this printer helped us sell 3.5 more units". 

 

Nice that you can get out for a round with the CEO - lucky dog.  

yeah he's a huge golfer, and has memberships at several different courses so when we play (not just me...its others as well so im not THAT special) he puts lunch and beer on his tab.  its very nice.   

[Chris G]

Your CEO sounds a little like the type that needs to be convinced that IT can actually provide value to your company and isn't just a "necessary evil" line-item on the expense side of the income statement.  If that's true, it could be tough to make your case.

That said... if you're serious about wanting some help, I'll be happy to brain-storm with you.  I would need some information about your company (size, industry, etc) and specifics about the project(s) you're looking at.  Not sure how much you could reasonably share with a stranger over the internet...

 
Chris

P.S.  if it's really a printer project, you're going to have to get pretty creative. 

[ChadTower]

IT is somewhat hard to really measure financially, sometimes.  Usually the best way to present wins to the rest of the company is to provide more at the same or similar cost.  They don't understand many of the values of IT until something goes wrong (which you don't want to happen), but if you can get them more than they had yesterday and make their life easier, without spending a huge amount of additional money to do it, that is very easy to demonstrate.

[Havok]

Also, look to the company you are buying from. As part of their marketing, they will (or should) include a ROI - Return on Investment. Sometimes, if you are going to be their customer, they will do a free analysis or report for you...

[ChadTower]

Having seen quite a few of those, they're never useful for very much, as they often don't stand up to practical scrutiny.  It's a good starting point, though, that you can expand on or tweak their concepts to fit your working environment.

[JackTucky]

for instance, i was talking with our CEO on the golf course the other day,

Stop golfing and start working.

=J

[hulkster]

Your CEO sounds a little like the type that needs to be convinced that IT can actually provide value to your company and isn't just a "necessary evil" line-item on the expense side of the income statement.  If that's true, it could be tough to make your case.

That said... if you're serious about wanting some help, I'll be happy to brain-storm with you.  I would need some information about your company (size, industry, etc) and specifics about the project(s) you're looking at.  Not sure how much you could reasonably share with a stranger over the internet...

 
Chris

P.S.  if it's really a printer project, you're going to have to get pretty creative. 

i appreciate the willingness to help, but i cant really share info like that over the net.  sorry...nothing personal.

i have thought of some ways we can calculate certain aspects of IT though in the past few days.  finding out how long it took me to configure a pc, versus doing it another way.  i can spread that out over what im paid an hour and give a decent estimate on what we are saving based on that. 

thanks for all your ideas.

for instance, i was talking with our CEO on the golf course the other day,

Stop golfing and start working.

=J

i have no idea what you just said...your words are like poison.

[leapinlew]

Your CEO sounds a little like the type that needs to be convinced that IT can actually provide value to your company and isn't just a "necessary evil" line-item on the expense side of the income statement.  If that's true, it could be tough to make your case.

That said... if you're serious about wanting some help, I'll be happy to brain-storm with you.  I would need some information about your company (size, industry, etc) and specifics about the project(s) you're looking at.  Not sure how much you could reasonably share with a stranger over the internet...

 
Chris

P.S.  if it's really a printer project, you're going to have to get pretty creative. 

i appreciate the willingness to help, but i cant really share info like that over the net.  sorry...nothing personal.

i have thought of some ways we can calculate certain aspects of IT though in the past few days.  finding out how long it took me to configure a pc, versus doing it another way.  i can spread that out over what im paid an hour and give a decent estimate on what we are saving based on that. 

Don't spread it over your salary. You'll be showing them how you can cut costs by not paying you more.

I have to do justification for my projects all the time. Some projects are easy because they provide a very short ROI. Other projects provide more features, or make someone more useful and they are harder to quantify.

In general, IT is viewed as a resource drain, and for some companies it is. I've found being consistent and treating the money as if it were mine when I spend it has netted me the best results. I make sure the CEO has access to the latest/greatest so he can see the benefits I bring to the table.  I make myself accessible to the employees 24/7 and I repair their home computers for free as an added perk. I treat everyone in my company with respect and never talk down to them. My boss has told me on several occasions how some of their peers in different companies would complain about their IT staff and how he realized how lucky he was.

It's a tough road, but you can make an IT department valuable.

[ChadTower]

Plus, your cost to the company is a full third larger than your salary, and if you only use your salary divided by 40 you're totally selling your value short.  Plus you're telling them you only work 40.

In a small company, as the IT guy or one of a small number, being the CEO's trusted personal support guy is a great way to job security.  I know a number of guys who get paid higher than avg with lower than avg workload specifically because their CEO trusts them and uses them for purposes other than company business.

[Chris G]

uses them for purposes other than company business.

   (resisting bad jokes...)

[ChadTower]

Heh, yep.  I've known IT guys who have been sent out to completely run the CEO's summer home with cat6, trouble shoot home theaters, all sorts of things completely unrelated to "work".  But the guys who are good at that and can be trusted get compensated more and have more job security in the small company.

[leapinlew]

I just thought of some examples of things I've done that you could also pursue -

Learn other peoples jobs. I learned what our accounting clerks do on a day to day/week to week basis. I found I could purchase some software for $1,500 per year that would allow the direct importing of data from one program to another. It removed a lot of redundant work. Because of this change, we didn't hire an additional 2 AP clerks and errors due to multiple entry of the same data was eliminated.

Tackle jobs that you may not currently do, but your more suited. Our internet connection was part of our phone bill.  The contract was out of date and way out of current market pricing. I was able to save over $17,000 a year by renegotiating our phone/internet connection and taking advantage of current VoIP promotion was able to provide more bandwidth for less money.

I did the same thing with our cell phone contract.

Do not be too aggressive in areas which may be important but are hard to justify ROI. Such as UPS systems, disaster recovery and backup strategy. Those are items you make do with until you've developed a reputation of being shrewd with the company money.


Also:
Keep your work area neat and clean
Dress for success

Chads right - as a network administrator you have to build up trust. You hold all the keys to a companys data and a company without data isn't a company at all.

[ChadTower]

Such as UPS systems, disaster recovery and backup strategy. Those are items you make due with until you've developed a reputation of being shrewd with the company money.

Oh holy hell - if you're going to cut financial corners there you'd better do it right.  One screw up there, just one, underminds your standing in the company and destroys that trust level we're talking about.  You can make it work with older hardware properly mirroring critical servers and ready to flip on if you are good at it, and you can do stuff like keep your offsite disaster in your house or something, but damn you'd better get it right.  Part of that trust level is that you have everything critical so covered that the CEO is free to come up with new ways to use your skills.

I once saw a small company IT guy get literally thrown from the back door, nearly right off the loading dock, because he half assed some critical backups and it was only discovered when a failure occurred and his single cheeked work made it unrecoverable.

[leapinlew]

Such as UPS systems, disaster recovery and backup strategy. Those are items you make due with until you've developed a reputation of being shrewd with the company money.

Oh holy hell - if you're going to cut financial corners there you'd better do it right.  One screw up there, just one, underminds your standing in the company and destroys that trust level we're talking about.  You can make it work with older hardware properly mirroring critical servers and ready to flip on if you are good at it, and you can do stuff like keep your offsite disaster in your house or something, but damn you'd better get it right.  Part of that trust level is that you have everything critical so covered that the CEO is free to come up with new ways to use your skills.

I once saw a small company IT guy get literally thrown from the back door, nearly right off the loading dock, because he half assed some critical backups and it was only discovered when a failure occurred and his single cheeked work made it unrecoverable.

You need to balance it properly. If your a new guy and you walk in and want 250k to implement a good strategy - it's probably not going to work since you don't have the trust in place yet. Initially I did backups to a personal external hard drive until enough trust was developed that I could suggest the proper equipment be in place.

I'm not suggesting take risks that could cost you your job. I'm merely saying that large purchases with no real benefit should be balanced with value adding measures until your own value has been established as a trustful person.

[ChadTower]

Yeah, that's along the same lines as my thoughts.  I would do - and have done - something in between.  Usually I will spend a bit of time analyzing the situation and then come up with three plans.  One is the cheapest - "these are your problems/risks and this is how much I can improve it with hardware on hand or minimum capital".  Next is a medium approach - "give me a budget and I'll return a plan that maximizes the improvements within the budget".  The third is "these are the best solutions, both in terms of improvements and ROI".

Almost always, the response is "do #1, we'll come back shortly with #2, and we'll come up with a longer term plan to truly accomplish #3."  Critical to that approach is that you lay out the risks clearly - that way if you have medium importance data backed up on USB IDE drives when a customer wants to look at your infrastructure, your CEO isn't going to be blindsided by them pointing out that your practices could be better.

[leapinlew]

Yeah, that's along the same lines as my thoughts.  I would do - and have done - something in between.  Usually I will spend a bit of time analyzing the situation and then come up with three plans.  One is the cheapest - "these are your problems/risks and this is how much I can improve it with hardware on hand or minimum capital".  Next is a medium approach - "give me a budget and I'll return a plan that maximizes the improvements within the budget".  The third is "these are the best solutions, both in terms of improvements and ROI".

Almost always, the response is "do #1, we'll come back shortly with #2, and we'll come up with a longer term plan to truly accomplish #3."  Critical to that approach is that you lay out the risks clearly - that way if you have medium importance data backed up on USB IDE drives when a customer wants to look at your infrastructure, your CEO isn't going to be blindsided by them pointing out that your practices could be better.

yes! This is good advice. What Chad just demonstrated was the ability to be flexible, concern for the data/employer and a good dose of CYA. When possible, these kinds of transactions need to be done via email to provide a paper trail.

Don't be penny wise and pound foolish.