• • • • • • Building a business case for your next IT project is a good way to show not only what your company could save, but what your project is worth. While TCO and ROI are great, they won't help you win your case; here's what will. Template & Guide. This guide is intended to be read in conjunction with the following template for the development of a Business Case for a small project. This template is to be used with the Commonwealth Two Stage Process handbook and Quick. Reference Guide to Two Stage Process. This template provides a general guide for Agencies. It is each Agency's responsibility to ensure that all information relevant to the project is supplied. Instructions to assist you to complete. Maybe you work for an IT company but, just as likely, you work in the IT department of a company that sells some other goods or services. So you, as an IT provider, will always be at a competitive disadvantage to getting your projects green-lit. Here's why you'll lose out to the line-of-business bosses: They will be able to project how much money the company is going to make based on their project, which is a lot sexier than how much your project is going to save. Here are some ideas to help level that playing field by showing what your IT projects are worth. MORE: What's Your Current State Cost? You'd be surprised how many companies -- big and mature enough to know better -- have no earthly clue how much they're spending on IT. While most of their information costs might reside in a shared services organization, each division might have its own shadow IT department. Some rogue individuals within these divisions might have sole access to enough computing horsepower to send a rocket to Mars, keep it in the kneeholes of their desks, and expensed it like a box of paper clips. So right away, let's just admit that this top-line number is unknown and unknowable. Fortunately for you, it's also irrelevant. So how do you determine what is relevant? What's relevant is what's likely to change. If your goal is to swap out your Unix-on-RISC servers for Linux-on-x86 blades, you have to ask: Where is this going to save the company money or, conversely, cost the company money? Server depreciation? Server maintenance? Direct labor? Maybe -- depends on your assumptions about whether one system administrator can manage more Linux images than Unix. Application development or database administration? Probably not. No, if you're comfortable with the disk platform you have and no amount of server swapping is going to effect it. You need to focus on the right layers and the right domains. Otherwise, you'll drive yourself crazy gathering data you don't need to make your case. Figure 1: Layers and domains One more thing: You'll be making assumptions going out for, typically, three to five years. Things don't stay the same, costs least of all. You need to take guesses about such cost drivers as: • Workload capacity growth • Software inflation • Hardware price performance • Labor inflation • Process improvement These are typically expressed as percentages, as in 'Software will cost five percent more each year.' Some change might be specific to a certain year: 'Capacity will have to grow 40 percent in Year 1 as the current merger is finalized, then 15 percent per year subsequently.' Whenever you make assumptions, it's a good idea not to own them. Throughout the process of crafting a business case, it's always a good idea to check back regularly with the project executive to get buy-in. And, as you get closer to the end and your projections aren't what the boss had hoped for, stand ready to change those assumptions -- at the exec's whim, not your own. Determining Target State Costs Your target state is a technological discussion, not a financial one. You can't model anything financially until you've modeled it technically. But once your team has decided on the high-level design, you can make some projections about why it would be cheaper to run the target state than the as-is. Here are the key metrics that you can leverage to quantify the savings: Key Metrics Hardware: Annual depreciation or lease cost per device; annual cost for third-party maintenance (maintenance might be $0 while the box is under warranty, but it balloons after that, and explodes when the box goes off OEM support). Software: Resource units -- these might be per image, per instance, per user, per CPU, per core or whatever other algorithm the software publisher makes up; if it's an enterprise license, then no matter what you do you won't save a dime on that package. Labor: The cost to manage a device; take the fully loaded cost of employing the individual fulltime, then divide by the number of devices she is responsible for managing. Facilities: Rackprint; a rack takes up almost 30 square feet including walkway and environmental space, so figure out how much it costs to lease or depreciate one square foot of raised floor space and multiply by 30. Also, take a look at the devices' specs and discover how many watts they burn, then assume that they do it 8,760 hours/year (that is, all of them).
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