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How Do You Justify the Existence of IT?

ScuttleMonkey posted more than 5 years ago | from the all-about-roi dept.

Businesses 411

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?"

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Another question is (1, Funny)

Anonymous Coward | more than 5 years ago | (#25679117)

How to spelling a headline?

Don't take technology for granted (5, Insightful)

AKAImBatman (238306) | more than 5 years ago | (#25679119)

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.

Compare with the present, not the past (5, Interesting)

mangu (126918) | more than 5 years ago | (#25679449)

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 (5, Insightful)

skelly33 (891182) | more than 5 years ago | (#25679867)

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:Don't take technology for granted (5, Insightful)

samkass (174571) | more than 5 years ago | (#25679471)

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 (4, Insightful)

DrLang21 (900992) | more than 5 years ago | (#25679691)

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 (1, Redundant)

martyros (588782) | more than 5 years ago | (#25679745)

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.

I think this is the most insigtful comment so far. Why the heck should they rely on the assessment of an IT guy? That's not his job. He doesn't had any training, expertise, or experience. Are they going to fire him if he puts the value too low? What do they do when they find out he was wrong then?

Any reasonably sane person in this situation would find out how much his salary is, and then make up a bunch of plausible numbers that is at least 2x that. (Given that he's been asked already, saying "You really need to ask a business productivity expert about that" probably isn't going to get him very far unless he has a particularly good relationship with his superiors.)

Re:Don't take technology for granted (1)

DrLang21 (900992) | more than 5 years ago | (#25679587)

Estimate the price of the time saved. When you have to be deployed to fix someone's desktop, you can usually assume that it would have been down for a day or more otherwise. That's 8 to 10 hours of their time, plus other people's time if anyone else is relying on their work. Manufacturing is usually a very fast paced world, and a day lost by someone usually translates to large losses. You should also consider a daily cost savings to preventative work. When you keep the servers running, what would be the likelihood of a major failure without that maintenance and what would an entire hour of server downtime cost the company. Imagine that everyone in the company has just had their productivity cut to 33% or less. In a moderately sized manufacturing facility, that can add up to millions within a day.

Re:Don't take technology for granted (0)

Anonymous Coward | more than 5 years ago | (#25679591)

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.

You forgot to subtract the cost of digital projectors for those rooms. All-in-all the company is probably saving on overheads in the short run. Those transparencies and time wasted start to add up quick though.

Re:Don't take technology for granted (4, Informative)

moderatorrater (1095745) | more than 5 years ago | (#25679645)

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 (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#25679673)

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Search engine-based ad campaigns are the most important elements in the marketing strategies of countless online vendors, and in Chapter 3, Andy King explains how to increase a site's pay-per-click results, click-through rates (CTRs), and conversion rates. He begins by explaining some key terms and concepts, which should be quite helpful for most readers â" especially given how much the online marketing world is laden with terminology and acronyms. The chapter reviews the advertising programs of the three top search engines, and discusses PPC optimization for those programs, with special emphasis given to Google AdWords. Like the first chapter of the book, this one does a competent job of explaining and illustrating the key ideas, and making clear topics that can be quite daunting to anyone new to the field. However, additional clarification of some terms would be helpful, otherwise many readers may be uncertain as to what is meant by terms such as "negative keywords," which unfortunately are left undefined. Even phrases outside the online marketing industry, such as "second-price sealed bidding system," could confuse countless readers. More importantly, some of the material is discussed at a level higher than what would be really usable for most site owners and developers â" in contrast to the first chapter, which generally presented more actionable details. In fact, for readers unfamiliar with all the factors involved in running a PPC ad campaign, the early portion of this chapter could prove quite bewildering. Returning to the issue of how best to present case studies, the "Bid Optimization in Action: The E-Grooming Book Example" section shows how illustrative examples can be presented much more concisely. In contrast, Chapter 4, which consumes eight pages, shows how not to illustrate concepts already discussed.

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Chapter 9 covers additional optimization techniques â" aside from the Web page and code techniques covered earlier â" on both the server and client side. The former category consists of parallel downloads, frequent caching, HTTP compression, delta encoding, and rewriting URIs. The latter category consists of load delaying, caching of off-site files on the server to be loaded locally, JavaScript packing, and inlining images.

The last chapter delves into Web site metrics for measuring the effectiveness of Web sites and changes made to them. The author explains some of the most popular and telling metrics, the leading Web analytics software (both Web server log analysis and JavaScript page tagging), and how they can be used for improving one's search marketing strategies and results. The chapter concludes with a detailed discussion of Web performance metrics â" i.e., measures of page load times, oftentimes broken out by site, request sizes, and content type. The material clearly shows that there are a great many options for testing the optimization techniques presented in all of the earlier chapters.

There are two Web sites that have additional information about the book: O'Reilly's book page offers book descriptions, the table of contents, and confirmed and reported errata (of which there are no significant ones, as of this writing). There is a more substantial author book site, which has chapter summaries, full color figures, worksheets, all the sample code, and links to external reviews.

In general, the book achieves its goals. Aside from the occasional marketing term that will most likely puzzle the majority of readers (more on that in a moment), the writing is clear and the examples cited are applicable. The illustrations created and chosen for this book are more than adequate in quality and number, although some of the graph labels would be confusing if not clarified by the text, e.g., "Mean Fixation Duration" (page 2). Web site statistics and other data are well referenced throughout the manuscript.

On the other hand, the brief chapter summaries add nothing new to the reader's understanding, and could be disposed of without loss to the book's usefulness. Chapter summaries are more appropriate for books whose material is far more lengthy and dense, thus justifying summaries as a way to convey the highlights to the reader. As noted earlier, the case study chapters similarly add very little value, if any, to Website Optimization, and could in future editions be folded into the relevant chapters, as sidebars, or at least made much more concise and moved to the back as appendices. There is a fair bit of repetition, in the form of allusions to techniques that are covered in more detail in earlier or later chapters, and other times in the form of redundancy within chapters. For instance, the sidebar on page 156, concerning CSS and JavaScript placement, consists of a uselessly brief mention of information covered later in more detail. Trimming away all of the repeated material and the chapter summaries, and folding the case studies into the relevant chapters, would make the book leaner and a faster read. Furthermore, some of the phrases are not entirely clear in their meaning, at least to readers who are not SEO marketers. For instance, "flagged sites" (page 12) â" flagged for what? Some of the phrasing is confusing, if not downright bizarre, e.g. "information scent" (page 2) and "the scent of a link" (page 122)

Admittedly, a Web site owner could learn much of this information by reading numerous articles freely available online. But most businesspeople value their time much more highly than that, and would probably find a significant amount of repetition among those articles, because they tend to "borrow" a lot from one another. This is especially true in the cases of writers who have never done SEO optimization to a Web site themselves, or run a PPC campaign.

Aside from the aforesaid weaknesses, Website Optimization is an engaging, comprehensive, and valuable resource for anyone who wishes to improve the online marketing results of their own businesses Web sites or those of the clients they support. Online business owners and Web developers unfamiliar with core SEO and site optimization techniques, are urged to read this book.

Re:Don't take technology for granted (2, Insightful)

petes_PoV (912422) | more than 5 years ago | (#25679675)

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 (5, Insightful)

Trojan35 (910785) | more than 5 years ago | (#25679679)

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.

Replying Anonymous because login's blocked by work (0)

Anonymous Coward | more than 5 years ago | (#25679893)

I'd really say that a better metric is to start from the system that exists today. Now consider that you're department is no longer there, and a virus wipes out everything (without maintenance, it's not a question of if, but of when).
 
Now, calculate the cost to the business in lost man hours (count everyone because the virus will spread without an IT team to catch it and clear it out). Add in the cost of hiring an outside firm to come in to clean it up. Add in the costs of possible lawsuits from customer data being stolen by the virus that infected the network. Add in lost revenue for business functions not being able to process things in a timely manner. Now, to be reasonable, cut that figure in half (they'd figure out how to get some stuff working).
 
There you go... a figure so astronomical (and based on actual valid data) that they will be blown away by how much your department does that they regularly forget about.

Re:Don't take technology for granted (2, Interesting)

Cryonix (1234264) | more than 5 years ago | (#25679975)

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 (4, Informative)

michrech (468134) | more than 5 years ago | (#25680043)

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 (4, Interesting)

Hadlock (143607) | more than 5 years ago | (#25679141)

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 (0, Offtopic)

elrous0 (869638) | more than 5 years ago | (#25679253)

Don't knock that guy. He made millions off that stupid "Jump to Conclusions Mat"

Re:Writing your own eulogy (5, Interesting)

rdeml (867986) | more than 5 years ago | (#25679287)

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 (1)

jimicus (737525) | more than 5 years ago | (#25679709)

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.

If you can't even take off two weeks, that suggests to me that you're firefighting rather than putting in genuinely useful time.

Re:Writing your own eulogy (5, Interesting)

mcgrew (92797) | more than 5 years ago | (#25679747)

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 (2, Interesting)

Hairy Heron (1296923) | more than 5 years ago | (#25679771)

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 (1)

Ethanol-fueled (1125189) | more than 5 years ago | (#25679351)

Ha ha! Well, shit, since TFA is titled "How do you justify the existence of IT" the answer is simple:

Answer that question for them and just walk out. Let 'em run a few days without an IT department. Come back in a week and witness the piles of help tickets, flaming servers, half-dead employees feeding on dead bodies, confused employees who don't know where their internets are, the quizzical look of managers gathered 'round a UNIX box with question marks floating over their heads, etc.

Re:Writing your own eulogy (1)

poetmatt (793785) | more than 5 years ago | (#25679663)

Yeah, give it a week without IT - tell them you'll both take a week vacay to demonstrate, and you'll see them start to justify things differently.

Re:Writing your own eulogy (4, Insightful)

Hairy Heron (1296923) | more than 5 years ago | (#25679855)

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 (4, Interesting)

Lord_Frederick (642312) | more than 5 years ago | (#25679373)

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 (1)

tcc3 (958644) | more than 5 years ago | (#25679561)

Better off does not = cheaper. Ive seen a lot of small offices, law firms, etc spend too much money for lousy service and poor response time from 3rd party support.

May not always be the case, but depending on what he does this may not be a good idea.

Re:Writing your own eulogy (1)

jimicus (737525) | more than 5 years ago | (#25679865)

Better off does not = cheaper. Ive seen a lot of small offices, law firms, etc spend too much money for lousy service and poor response time from 3rd party support.

May not always be the case, but depending on what he does this may not be a good idea.

There's a simple reason for this.

The third party company will probably have a service level agreement with something like "n hour response, n*2 hour fix". It's in their interests to ensure that they only just have enough staff to be able to meet this. Any more will cost them more money while gaining very little.

Whereas many in-house IT departments are staffed on the basis of "how can we provide the best possible service (within reason) for the business" - and that generally means a rather more generous number of staff.

So even a relatively straightforward desktop support issue ("the hard disk in my PC's failed, I can't do anything") suddenly takes a whole working day to get fixed. Minimum. And that's assuming that they keep at least one spare PC and a person to swap them over onsite.

A whole working day in which the end user has basically sat around twiddling their thumbs.

Re:Writing your own eulogy (2, Insightful)

Omega996 (106762) | more than 5 years ago | (#25679569)

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 (1)

moderatorrater (1095745) | more than 5 years ago | (#25679697)

Actually, I thought it was just the opposite. It sounds like his supervisor's getting some pressure from above to justify their cost, and he's trying to get the poster's help in justifying it. If the executives are smart but inexperienced in dealing with IT, then they'll receive the reports and be enlightened. If they're just looking to cut costs and have already made up their minds that IT is an unnecessary expenditure, then I doubt there's much that can be done.

Also, if the poster's supervisor IS trying to throw this guy under the bus, then he'd best start looking for another job anyway.

Cost for NOT having IT? (2, Insightful)

FnordX (115944) | more than 5 years ago | (#25679147)

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?

Re:Cost for NOT having IT? (1)

epiphani (254981) | more than 5 years ago | (#25679275)

Perfect!

Break something important. Calculate how much time is spent bitching about it for the next 24 hours. Multiply by 365 days and by the average salary. Thats how much you save!

Make friends with a beancounter (4, Insightful)

dreamchaser (49529) | more than 5 years ago | (#25679171)

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 (2, Insightful)

wild_quinine (998562) | more than 5 years ago | (#25679835)

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 .. (5, Insightful)

johnlcallaway (165670) | more than 5 years ago | (#25679183)

.. 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.

Re:How much does it cost .. (1)

khellendros1984 (792761) | more than 5 years ago | (#25679491)

This is essentially the post I was going to make. The value of preventive actions should be measured by what would happen if they weren't done. If someone isn't there doing your job, how quickly do things go to crap, and how much trouble does it cause when they do?

Re:How much does it cost .. (1)

DrLang21 (900992) | more than 5 years ago | (#25680031)

It also needs to be measured by the likelihood of things not happening. If you subtract one IT worker, and the result is about 1 hour of extra downtime per year, then the one IT employee's value isn't so great. If the cost is a couple days of downtime, then it becomes a different matter.

The Usual (0)

Anonymous Coward | more than 5 years ago | (#25679187)

Write up everything you do then take bids from other companies to replace you.

How I shot web? (0)

Anonymous Coward | more than 5 years ago | (#25679205)

How I justifying IT?

first things first (2, Interesting)

gEvil (beta) (945888) | more than 5 years ago | (#25679211)

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.

Re:first things first (answered) (2, Funny)

FuckTheModerators (883349) | more than 5 years ago | (#25679521)

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.

Imagination (5, Interesting)

sam0vi (985269) | more than 5 years ago | (#25679217)

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 (5, Informative)

prgrmr (568806) | more than 5 years ago | (#25679235)

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?

Rule 2.5 (1)

petes_PoV (912422) | more than 5 years ago | (#25679447)

Because the boss (directors, shareholders, owner etc.) said it shall be done.

(don't make the mistake of thinking this is a humourous response - it's not. it's a fact.)

Re:5 reasons for any business decision (1)

mcgrew (92797) | more than 5 years ago | (#25679911)

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

Not any more, grandpa. It ain't like it was when we were young.

#1 and #2 are the same; the legal dept. takes care of that (even if your legal dept is one guy on retainer). #3 is the reason for your company's existance.

#4 has morphed to "how best to cheat the customer out of his money, and find more customers to cheat

#5 Employees' quality of life??? MUAHAHAHAAAHAAA!!!

These days is #5 has morphed into "golden parachute for the CEO, fuck the employees and hold the lube. Like customers, there are lots more employees where they came from!"

Re:5 reasons for any business decision (0)

Anonymous Coward | more than 5 years ago | (#25680073)

I would put legality last. Since there are just too many loop holes, which is an unavoidable fact of human nature. My priority is Humane, Fair and Just.

There is no justification for IT (5, Funny)

Weasel Boy (13855) | more than 5 years ago | (#25679239)

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

Re:There is no justification for IT (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25679419)

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

Spoken like a true fanboy. You could fire the entire IT department since no one would need support for applications that only hippies use.

Re:There is no justification for IT (0)

Anonymous Coward | more than 5 years ago | (#25679541)

Whoa, what's that in the sky? It's...it's coming closer to us. Wait a minute, it's about to fly over our heads...

WHHOOOOOOOOOOOOOOSHHH

Re:There is no justification for IT (0)

TypoNAM (695420) | more than 5 years ago | (#25679481)

Weasel Boy... what a fitting name for such a terrible suggestion. Not to mention no IT, no network for your macs. So you prefer a bunch of stand alone macs instead of a network infrastructure where information can be passed around easily and maintainable compared to say USB keys or DVD+Rs handed around? No internet either that is IT's work field.

Your suggestion would definitely get rid of the problem of employees wasting their time away web surfing or posting on slashdot instead of working...

Re:There is no justification for IT (0)

Anonymous Coward | more than 5 years ago | (#25679589)

What's a Mac?

Re:There is no justification for IT (1)

Bobfrankly1 (1043848) | more than 5 years ago | (#25679593)

I work for one of those companies. Without the IT department, the macs would have been thrown out the windows already (not a pun!).

Cost risk (1)

DoofusOfDeath (636671) | more than 5 years ago | (#25679289)

It sounds like you need to do a risk analysis. For each of those "preventative maintenance" tasks you do, you may be able to quantify:

  • The degree by which you reduce the probability of various risks, and
  • The cost to the company if each individual risk gets realized.

(Unfortunately tis can be difficult for numerous reasons. Even if you can reasonably determine the probabilities and costs of individual risks becoming realized, two or more risks might not have independent probabilities. Also, if two or more risks are actualized at the same time, their cost to the business may not simply be the sum of their costs if they were to happen just one at a time.)

The ultimate answer to whether or not you should do those tasks will depend on management's risk tolerance.

At least, that seems to be the mathematical answer. I'm not sure what you should do when it's impossible to confidently calculate the probability and cost of various risks.

If you're getting a lot of heat from management, maybe the best solution is to take a leave of absence for two months and work a contract somewhere. Then pop your head in and see how they did without you?

simple (3, Funny)

Lord Ender (156273) | more than 5 years ago | (#25679307)

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.

Guesstimate the Worst (1)

Foofoobar (318279) | more than 5 years ago | (#25679321)

Inflate your statistics because they will usually be correct if they do not have onsite support. If they farm it out to offsite support, they may not be available and when they become available, the staff has to get to the site (travel time) and then they have to get up to speed on that particular vendors setup (which takes twice as long as someone who is already familiar). Whatever the time is for you to get something taken care of, it will be 4-8 times as bad without you there. So here is a good calc:

Number of machines (if 1 machine=1 person) x 5.5(average of above factor) x (number of hours spent fixing problem) x (average employee wage).

So if you spent 4 hrs, fixing a machine that caused 20 employees to be unproductive (or potentially avoided unproductivity), take 80 times their average wage (we'll say $15), TIMES 5.5. $6600 was just saved on that one task.

Quantify Work (3, Interesting)

Anonymous Coward | more than 5 years ago | (#25679331)

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 (3, Insightful)

Todd Knarr (15451) | more than 5 years ago | (#25679343)

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?

Here's one way (0)

Anonymous Coward | more than 5 years ago | (#25679349)

Count the amount of time your servers are NOT down during the year, and multiply that by the cost in lost productivity that would have resulted if they were not available. That's your value.

Maybe then you'll end up being his manager (as it should be - because as any good SysAdmin knows, a database is just another application).

Cost for someone else to do it? (0)

Anonymous Coward | more than 5 years ago | (#25679385)

Just calculate the cost of paying an outside business to fix whatever breaks, and for tech support. So look back and what you have done over the course of the past 3 months. Figure out what the going rate in your area is for onsite repair, be sure to add a little extra because someone else isn't as familiar with your system as you are, and don't forget any sort of travel fees. Look at every time your phone rang and multiply that by the going rate for phone tech support. Don't forget after hours support (anything after 5pm) gets charged more.

Not doing your job? (1)

simplu (522692) | more than 5 years ago | (#25679405)

What's happening if they cannot use their desktops? Or the servers are down? How much this costs?

backup backup backup (1)

jagb (457281) | more than 5 years ago | (#25679427)

well. you back up your boss' database right?
how many times do you restore for your users? How much is that worth? How much does downtime cost? Do you have a web presence? how many hits per day? What's that worth. How much is downtime worth if your users get wormed/trojan-ed? Any intellectual property there? What is that gets walking?
Its a good exercise to do. You'll pay for yourself twice, then ask for a raise :-)

That's easy. (2, Informative)

mweather (1089505) | more than 5 years ago | (#25679429)

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

One question ... (3, Interesting)

gstoddart (321705) | more than 5 years ago | (#25679453)

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 (2, Insightful)

BigJClark (1226554) | more than 5 years ago | (#25679457)


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.

Take this Opportunity to Proactively Manage Sys (0)

Anonymous Coward | more than 5 years ago | (#25679539)

I managed to reduce helpdesk calls from 50 per week in a 50 person office to only 5 per week. I audited the existing network infrastructure and services and re-engineered the works over a single long weekend. Afterwards, I could relax in my office, write documentation and chat on instant messenger. This was a summer student position. The manager was so grateful for the reduction in calls from users had it not been a government department I would have been offered a permanent job. As it worked out that launched a great career in IT.

Ask your boss. (0)

Anonymous Coward | more than 5 years ago | (#25679581)

Of course maybe you are by posting on slashdot.

Do you look at truely critical systems? Meaning if the network goes down, does the manufacturing stop?

If so, ask how much it costs the businness to be down...per minute.

Example, I works on a system where every minute down cost almost a 1000 bucks.
so 2 hours down, and they have lost my salary for the year.

Now you can easily to a Cost/Risk analysis.
In my case, I listed several problem I had caught in advance with the time they would probably be down for in the last year.
One example, I caught a server sound 'wrong' and had a replacementordered and prepared. the ordering and preperation took 7 days. The bad server failed 1 day after I added the new server.

For he report, I assumed that under a critical situation we could ahve the server there that day and prepped in 4 hours, tested in 2 and online. Best case 8 hours from failure to up.
Lets see:
60,000 and hour
8 Hour 480,000

Granted that was the most extreme thing that happened, On the plus side the server team got a redundant system and a principle IS guy.

Oh, I was a programmer who got stuck overseeing the servers because they went cheap on the employees.

Try this (0)

Anonymous Coward | more than 5 years ago | (#25679599)

Just change evryone's password then leave, after putting a report saying that your job is priceless... I really don't think they'll disagree after that, even thought they may replace you soon enough.

The devil is in the details -- Get some metrics! (5, Insightful)

lucm (889690) | more than 5 years ago | (#25679617)

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).

Insurance (1)

Coreigh (185150) | more than 5 years ago | (#25679623)

Its not an easy sell but IT and more so security is an insurance policy. If you can demonstrate the cost of a failure or loss due to lack of IT and or security it is a lot easier for bean counter to swallow. I have always wanted to ask the guy who is trying to cut my budget if he carries health insurance. Because if he really follows his logic he could not possibly justify the cost.

Unplug everything (3, Insightful)

Toe, The (545098) | more than 5 years ago | (#25679639)

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? (2, Informative)

Drakkenmensch (1255800) | more than 5 years ago | (#25679671)

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.

Stall (0)

Anonymous Coward | more than 5 years ago | (#25679703)

Your best course of action is to stall until he forgets about it. "I need some more time to look into that" If that doesn't work, tell him you need to see some balance sheets and payroll records before you can make any dollar estimate.

Unless you think your boss is doing this for your benefit (justify a raise), nothing good can come from participating in these completely ridiculous games.

You boss is clearly very, very stupid. I would try to find another job.

this isn't justification, it's an opportunity (0)

Anonymous Coward | more than 5 years ago | (#25679715)

1. Determine how much money you want to make each year. $175,000 sounds good.

2. Triple that.

3. Document loss of revenue related to your simulated non-presence and make sure it meets or exceeds that number, but don't go crazy. This can be done honestly by determining the average contribution of each employee to gross revenue, based on having IT vs. not having it (having to either muddle through themselves (less time to work) or outsource (more capital expenditure.))

4. Congratulate them on having the business sense get a good deal paying you $175k/year instead of losing $525K/year.

Take a long vacation (0)

Anonymous Coward | more than 5 years ago | (#25679719)

Hope something happens while you're gone.

Reality check (4, Insightful)

Slicebo (221580) | more than 5 years ago | (#25679727)

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

I usually start looking for a new job.

Two keys to include (1)

porkface (562081) | more than 5 years ago | (#25679761)

You reduce your company's exposure, or risk, to certain failures.

Part of quantifying that is stating the cost of catastrophe. That's the big scary part of the pitch.

But since there is always competition afoot (outsourcing IT), you must also quantify how much time the little things you do save the company, if say the response time of an outside IT vendor is 24 hours or whatever it would be. If you need to know what the response time is, call some as if you were looking to outsource your company's IT and ask them. Then add a little because it's never as efficient as they'll claim.

Vacation Time (1)

M1000 (21853) | more than 5 years ago | (#25679837)

You could take your 2 weeks of vacation, and not take any calls; Let the users that depends on you calculate how much they lost...

Cost savings (0)

Anonymous Coward | more than 5 years ago | (#25679895)

If you didn't have IT, then you'd have Windows 7 with a support contract, and all cloud services. Of course then you'd be a slave to MS's uptime and additions/subtractions of functionality, rearranging of the GUI, etc.

It's all economics (0)

Anonymous Coward | more than 5 years ago | (#25679915)

In a good business, it's about the efficiency of works done, and fair profit distribution. Not justifying your salary and job description with others'.

This should produce responsible hard working employees and it shouldn't be sacrificed for the employees' satisfaction, I'm sure other arrangements could be made for such.

Easy way to prove you are necessary. (1)

B5_geek (638928) | more than 5 years ago | (#25679923)

The easiest way to prove that not only are you a necessary part of ANY organization, but also that your contributions are invaluable and unmeasurable;

go on a 2 week vacation and turn off your phone.

Trying to Boil it down... (4, Insightful)

Bobfrankly1 (1043848) | more than 5 years ago | (#25679947)

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? (4, Insightful)

aitala (111068) | more than 5 years ago | (#25679983)

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

Go on Vacation (0)

Anonymous Coward | more than 5 years ago | (#25680003)

Go on vacation and see how things hold up.

Easy (1)

Aphoxema (1088507) | more than 5 years ago | (#25680005)

Many questions can be answered with another question, especially this one.

Boss: "Just how important do you think your IT department is?"

You: "I don't know, how would you like to try running your business without it a few months?"

Start printing copies of your resume at work (4, Interesting)

topham (32406) | more than 5 years ago | (#25680007)

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.

A business guys point of view. (0)

Anonymous Coward | more than 5 years ago | (#25680017)

Tech is a necessity. If you don't have it, then you can't compete. Period.

The productivity gains that have been made over the last decade or so are because of tech. If it weren't for tech, we Americans would be completely impoverished right now.

That's the internet posting site version of why tech is a necessity. A real version of why will cost 50,000 EU

Tell him you are taking a long vacation (1)

Coward Anonymous (110649) | more than 5 years ago | (#25680053)

Tell him you will take a long vacation and will not be available for tech support. You are priceless!

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