GroundWork Monitor - Return On Investment (ROI) Analysis

A well-designed, smartly deployed network monitoring system improves application availability and performance, and boosts IT service levels to end users. But monitoring also provides the information engine to drive IT business processes, including capacity planning, service desk activities, configuration management, and security. It enables you to identify and fix problems quickly, and to manage network growth efficiently. In short: comprehensive monitoring provides the information and insight to run IT with the accountability of the rest of the business.

Hard Dollar Savings

To cost-justify any monitoring deployment, it is useful to separate soft (non-quantifiable) from hard (quantifiable) benefits. Soft benefits include 1) improved customer service, 2) increased IT insight and 3) higher IT staff confidence and control. For many IT organizations, these benefits alone validate a decision to deploy GroundWork Monitor. Those seeking evidence of a hard dollar return on investment only need to look at the ample savings GroundWork Monitor provides in the following three areas:

• Increased IT staff productivity
• Increased employee/end-user productivity
• Capital cost savings

IT Staff Productivity

GroundWork Monitor provides real-time network-wide visibility of your servers, network devices and applications. Equipped with that information, you’ll be able to spot potential problems and proactively address them before they affect your end-users, so trouble tickets will decrease and be resolved more quickly. We estimate GroundWork Monitor will cut the time your staff spends on user support, help desk activities, network troubleshooting and repairs by at least 20%. In calculating ROI, this productivity increase results in measurable saved salary cost.

End-User Productivity

When your network goes down, your end-users are stopped in their tracks—no email, no web access, and no access to production applications. We estimate that GroundWork Monitor cuts network downtime by 50%. Why 50%? Because employees may be able to continue working productively for some period of time without application access, we conservatively estimate that productivity is only affected half of the time. For example, if your network is down for four hours per month, GroundWork Monitor will reduce your downtime to two hours per month or less of this two hours of downtime, end-users will lose one hour (50%) of productive time. The decrease in lost productivity is measured as saved salary cost.

Capital Cost Savings

With GroundWork Monitor, you’ll be able to track in-depth data about CPU usage, storage capacity and hundreds of other factors that alert you to needed capacity adjustments in your network. Rather than buy unneeded equipment based on guesswork, GroundWork Monitor provides the information needed to make informed capacity investments at the right time. We estimate you’ll save at least 10% in infrastructure capital costs when armed with the insight GroundWork Monitor provides.

Low Cost Investment

The cost of a monitoring system consists of:

1. the amortized cost of its initial installation and licensing,
2. the ongoing costs of software maintenance and hardware hosting,
3. staff costs associated with performing additions, changes, and deletes to the system, along with routine system administration.

Because GroundWork Monitor is based on open source software, the total investment required for a GroundWork solution—including software, deployment and support— is a fraction of what is typically required for a comparable monolithic software product. Your subscription to GroundWork Monitor includes enhanced open source software, regular updates and GroundWork’s deployment services. Support is included and is available 7x24x365.

Furthermore, GroundWork Monitor can be deployed alongside any existing monitoring tools, so you can do a partial and/or gradual rollout. For example, GroundWork Monitor data can easily be folded into HP OpenView, allowing the two systems to work side-by-side.

Hypothetical ROI Example: Next Big Thing Computer Company

(The Next Big Thing (NBT) Computer Company is an example based on aggregate cost savings our customers have shared with us over the years. Follow the analysis below with your organization in mind: are there places where you might save even more?)

The Next Big Thing (NBT) Computer Company sells computer equipment direct to 1500 distributors and retailers through telephone ordering and a secure Web site. Serving 300 employees and its network of customers, NBT’s network consists of approximately 70 Unix and Windows servers, 15 network devices and four primary applications that require basic monitoring. NBT’s IT staff includes six service desk professionals and five network and system engineers charged with maintaining the infrastructure.

The only current monitors in place are basic, manual checks. Otherwise, employees and/or customers often provide the first notice of poor application performance or an outage. The IT department estimates that some or all of the infrastructure is unavailable about two hours per month on average. Further, it estimates NBT will invest $300,000 in new capital equipment in each of the next three years.

Key facts about NBT are summarized below:

To calculate “return”, we add the hard dollar cost savings from 1) increased IT staff productivity, 2) increased employee end-user productivity, and 3) capital cost savings.

1) Annual increased IT staff productivity is calculated as:

IT staff assigned to user support x IT staff cost per hour x 2000 hours x 20% savings

6 x $55 x 2000 x 20% = $132,000 (in year 1)

IT staff assigned to troubleshooting & repair x IT staff cost per hour x 2000 hours x 20% savings

4 x $55 x 2000 x 20% = $88,000 (in year 1)

= $220,000 total (in year 1)

2) Increased employee end-user productivity is calculated as:

Employees x employee cost per hour x reduction in hours of downtime per month x 12 months x 50%

300 x $50 x 1 x 12 x 50% = $90,000 (in year 1)

3) Capital cost savings are calculated as:

Estimated capital expenditures x estimated 10% savings

$300,000 x 10% = $30,000 (in year 1)

Total savings from 1, 2 and 3 are $220,000 + $90,000 + $30,000 = $340,000 in year 1. For years 2 and 3, we estimate that salary costs increase 5 percent per year (impacting salary savings) increasing savings in year 2 to $354,900 and in year 3 to $371,775. Total savings for years 1-3 are $1,066,675.

The next step is to estimate the three-year investment cost in a GroundWork Monitor deployment for NBT’s network. Based on NBT’s network size and deployment assistance needs, we estimate NBT’s year 1 investment in GroundWork will be $91,000, and approximately $35,000 per year in years 2 and 3 to cover subscriptions, training and expanded monitoring coverage as the network and application services grow. Total investment over three years is $161,000.

To calculate ROI, we simply subtract the 3-year investment cost from the value of the 3-year savings and divide by the present value of the 3-year savings, as follows:

(Savings –Investment) / Investment

($1,066,675 - $161,000) / $1,066,675 = 663% 3 Year ROI

The monitoring investment will break even in the first 3 months

The following table details the ROI calculations over three years:

Summary

GroundWork Monitor provides the foundation for monitoring and managing your IT infrastructure. You’ll benefit from reduced system downtime, increased application performance, and improved control over your IT environment. Cost justifying a GroundWork installation is straightforward, as the system delivers hard dollar savings in IT staff, employee productivity and capital cost savings from more efficient and timely investments in system capacity. Combined with GroundWork’s market-leading affordability made possible through open source software, these savings deliver a significant and measurable return on investment.

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