Your Network Monitoring Investment: The Search for Returns
Data networks are fragile. Yet all companies – from health care to manufacturing, high tech to education – are completely reliant on these networks. Few, if any, organizations can argue that network reliability is a luxury. But, since all organizations are pressed to protect the bottom line while increasing the top, even costs for network reliability get put under the microscope.
Businesses are increasingly eyeing network operations and expansion plans to find business value. How does the network affect the bottom line? Does it support new revenue opportunities? Does it secure current revenue lines or market position? Are costs justified? Is there a return on investment?
Depending on organization type or business goals, return on investment (ROI) for network monitoring might be realized in five minutes or over five months. This paper describes several ways to think about and quantify returns from network monitoring, and how to compare those returns to the costs of achieving them.
Justifying Network Monitoring
Given the fear most organizations have of network downtime, it might seem easy to justify the cost of network monitoring. Anything that keeps the organizational lifeline up and running 24x7x365 has value. In the same way that building owners don't argue the need for fire insurance, network managers rarely refute the need to keep an eye on servers, routers, hubs, switches, and connections to make sure that everything is functioning.
But business unit managers, financial officers, and CIOs are responsible to worry about all costs, to understand their value and ultimate return on investment. Cost containment is as important as network reliability so at some point, it's critical to understand how monitoring a network adds value and/or reduces costs.
The formulas for network monitoring's return on investment vary as widely as the organizations that use it and business models it supports. Some organizations might concentrate on the opportunities a network presents – like the ability to conduct online commerce. Others might focus on reducing the costs of network maintenance and support. Both types of formulas present results that help network and business managers understand the value of their network monitoring solution.
In this paper we'll explore several possible places to find returns on investment for network monitoring. Some organizations might realize several categories of returns others might have one primary source. And, depending on the solution that is implemented, network monitoring costs will also vary.
The search for returns
Finding a return on investment for network monitoring starts with understanding what problems you're hoping it solves. Perhaps your organization has had to hire extra staff to cover support calls. Maybe your technical support team spends inordinate amounts of time, and overtime dollars, hunting down and fixing network performance issues. It might be that unreliable connections have kept you from rolling out an ecommerce site.
Once you've targeted a problem that adds bottom line costs or an opportunity that could boost top-line revenue, its much easier, and more accurate, to determine returns. Many companies realize returns in areas other than those originally anticipated.
Salary/Staff time savings
Running a network takes person power. You need staff to maintain elements and connections, set up new users, take support calls, and plan network expansions and changes. Any technology that helps maintain or even reduce required headcount associated with network operations offers quick, definite returns. In many cases, if your monitoring solution lets your experienced network technicians focus on new projects that drive top line growth, you get those additional hours “for free.”
Salary saving are fairly easy to notice or calculate. If, for example, monitoring technology allows night shift staff to be reduced (or even lets you run “lights out”), the savings would simply be the freed up salary(ies). If the technology allowed a staff resource to spend time on an on-line commerce project that realized $100,000 in its first month of operations, that amount should be factored into the return on investment.
Minimizing or Avoiding Outages
A network monitoring solution can often alert the network management and support team to potential problems. Network utilization rates, error percentages, transmit and receive statistics (packets per second or bytes per second), round trip times, or percentage availability that vary from documented trends can all signal oncoming trouble. Checking in on those red flags and implementing corrective action will stem the tide of support calls, eliminate the need for network-wide apologies and fix status reports, and, best of all, keep the network up and running.
Nipping a problem before it becomes obvious provides a great service to your users and customers.
Reducing support calls
Communicating with end-users in order to keep them on-line and productive is a critical network management role. A big communication tactic is support team assistance – technicians manning hotlines, email inquiry or problem report systems. Obviously, the more problems that are called in, the more time it takes support staff to “close” those calls. Closing calls might includes resolving a series of individual problems or letting everyone in a location know that they are suffering the same problem and that resolution will take a certain amount of time. An easily understood graphical display will allow your customers to see the state of the network, and can help them understand whether they need to call the support center or not.
In the best cases, a network monitoring solution alerts the network management and support team to potential problems. Network utilization rates, error percentages, transmit and receive statistics (packets per second or bytes per second), round trip times, or percentage availability that vary from documented trends can all signal oncoming trouble. Checking in on those red flags and implementing corrective action will stem the tide of support calls, eliminate the need for network-wide apologies and fix status reports, and, best of all, keep the network up and running.
Support calls and call volume is typically carefully tracked and costs can be derived by applying per hour staff salaries to the time it typically takes to close a call. So, if a network monitoring solution reduces calls per week to an average of 20 from an average of 50 and it takes, on average, 30 minutes to resolve or close a call, then time savings would be 15 hours. If an average, fully loaded hourly salary rate for network support staff is $30 then per week savings would be $450 or $22,500 per year.
Increasing troubleshooting to reduce time to fix
Once network technicians are notified of a network problem, it can be difficult to locate its source. Are performance issues caused by high bandwidth utilization, or is something going on at the ISP's end? The Chicago Lake Shore Dr. office suite can't connect. Is the problem on their email server or is a router off? Looking for problem sources can take time, especially if databases that detail network equipment are out-of-date or incomplete. And, when a highly distributed network is spread over long distances, performance issues and outages can be held hostage by traffic jams or long commutes.
The time it takes to find and fix problems along with the fuel it takes to drive from place to place add real, easy-to-quantify costs. Network monitoring applications that provide real-time diagnostic data and include element and connection location can save a network team hours, if not days, and drastically reduce travel budgets.
Guaranteeing and managing SLAs
Whether operating as an internal unit or providing services to external clients, network operations teams are usually held to service level agreements (SLAs). Service levels for uptime and availability are set to reflect business needs and serve as essential performance metrics. Meet the SLA and end-users or clients are happy. Fail to meet the SLA and hard questions are asked.
Network monitoring technology that understands SLAs and provides alerts before they are violated act as an important early warning system. In the same way that the technology can prevent scores of support calls, it can go along way towards SLA guarantees.
Quantifying return on investment from technology that ensures SLA compliance can be difficult except in cases where it secures or wins business. On the other hand, to the extent that SLAs reflect true business requirements, network management should consider consistently met SLA requirements a business value and return on investment.
Reducing downtime
There's no doubt that network outages or slow downs reduce employee productivity and commercial activity. They might translate into overtime charges from units that have to work over the weekend to make up for a Friday outage or 4 hours of lost sales from a down website. More routine downtime losses include employees turning to the newspaper or a few games of Freecell while the network gets fixed.
Assigning a dollar value to downtime or, depending on how you look at it, uptime, can be controversial. In fact, it's only clear in the cases of companies that generate revenue directly from ecommerce. When a company knows how much a website earns per hour, it can quickly determine how much a two-hour outage would cost.
Companies that don't directly generate revenue from their network have a harder time defining the cost of downtime. On fully productive days, employees often squander a few moments here and there to personal email, trips to the snack machine, or chats with cubicle neighbors. Does network downtime lead to more snacks or chats? (It does certainly cut down on personal email!) And how does downtime factor into a measure of employee productivity? If a company that strives to earn $125,000/year/employee misses that mark, can it assume that network downtime was the sole cause?
Calculating reasonable and agreeable returns on reduced downtime depends on understanding how much unplanned downtime was typical before monitoring technology was put in place. After implementation, network managers should see fewer incidents of shorter duration. Assumptions about productivity value (amounts of revenue per hour, data processed per hour, transaction rates, etc.) that are separate from per-employee behavior can then be applied to increased network availability.
For example, if a company experiences 12 hours of unplanned, business hour downtime per month and knows that its 5 catalog order takers process $100 in revenue per hour, they can calculate return of $6000 per month.
Network monitoring cost variables
Finding returns on network monitoring is the first step in calculating return on investment. Determining if those returns outweigh the network monitoring investment is the critical second step.
Once the business understands the network costs it would like to control or eliminate or opportunities it would like to pursue, it has to quantify the costs it will incur in implementing corrective technology. Certainly, software and hardware purchases are the most visible costs often appearing as separate budget items. There are other cost factors that must be considered to calculate total cost of any solution. A typical organization should consider these costs, many of which will be incurred over time:
initial purchase of solution – The price of network monitoring licenses.
product upgrades and support – The price of product upgrades and maintenance and support contracts. These costs may be optional.
required hardware or associated software – The price of hardware that will be dedicated to running the network monitoring solution.
installation/implementation/consulting – The cost for solution set up and testing. This could be as simple as a consulting fee or include any overtime required by staff that is already fully subscribed.
training – Costs for training needed by staff that will interact with the monitoring solution should include travel (either by staff to a class or consultants to your facility) and any on-going instruction that will be needed as staff is added or turned over.
solution administration/management – Salaries for staff dedicated to the solution should be fully applied to overall costs. If new staff has to be hired, factor in costs of recruitment.
Costs vary widely depending on the network monitoring solution that is implemented. Network management systems (like HP Openview, Cisco Works, etc.) include network monitoring as a component and are much more expensive than standalone products that focus on monitoring and alerting. Not only do they cost more to purchase, network management systems cost more to implement and administer. Dedicated hardware is often required as is dedicated, highly trained headcount.
Personnel costs associated with solution administration and management can not be overlooked or taken lightly, especially if network monitoring technology will require an increase in IT headcount. Since most organizations justify purchase of network monitoring technology by assuming a lower support call volume and hold on support staff hiring, having to add a six-figure salary to run the technology could be a bitter pill.
If your network is monitored by a consultant, costs can be fairly easy to derive from contract fees. Those costs may still include many of the categories listed above: license, support, and hardware pass-through costs along with staff time and administration fees.
Total costs are incurred over time. You should calculate your monitoring costs for a year and understand when those costs will hit. Initial license purchase will, of course, happen first, staff costs can be considered on a monthly basis and then totaled for the year, support contracts might have to be renewed in a certain time frame. Understanding how costs play out over time will help you understand how your return on investment outpaces, or lags behind, the investment.
Technology Assists
Any type of return on investment is assisted by three technology characteristics.
Quick implementation – Technology that is difficult to implement typically adds to network management costs before returning any investment. Long implementation projects can also derail other IT projects.
Ease of use – Technology that trades network support time for application management time may never yield return on investment. If you're saving $20,000 on network downtime every year but paying a trained, dedicated, certified, network specialist $90,000 to manage the network monitoring system, your organization will increase costs rather than realize returns on investment.
Ease of maintenance – Any technology requires its own maintenance. Certainly all software applications require periodic upgrading. Network management applications also require administration when the users or locations are added and business rules change. The easier it is to maintain networking monitoring technology, the lower the cost to the organization.
InterMapper
“InterMapper is so cost-effective. You don't need $40,000 worth of software, $60,000 worth of hardware, and a $100,000 per year person to run it.”
Guy Bryant Project Director Alcatel Australia
InterMapper network monitoring and alerting software provides a big picture of your network. Elements and connections are mapped according to geographical location. At the highest level, portions of the network might be tagged to cities and street addresses. At sub-net levels, network managers view elements and connections by building floor and specific network closet.
Real-time status and historical trend reports provide underlying data for color coded, mapped items. Network technicians know exactly where problems lie and what has to be fixed. Trend data helps set alerting thresholds so that attention is paid to potential problems before a phone call reports a full-blown network crash.
“InterMapper is so easy. You can learn to use it in an hour.”
Göran Åvhlik Systems Engineer Västtrafik
InterMapper customers routinely report implementation phases that last one hour to one day. In many cases, prospects have found and fixed network problems while evaluating InterMapper. This is in marked contrast to network management systems that might take months to evaluate and then months to implement. While that time doesn't negate opportunity for eventual return on investment it does prolong a cost phase and delay benefits.
The following return on investment indicators have been reported by InterMapper customers:
Integrated Business Systems (IBS) uses InterMapper to monitor client networks that transact $8 – $9 million in revenue per year. If those networks are down, it's easy to understand how many receipts might be missed. “If the network isn't working, that money doesn't change hands,” explains Jonathan Baber of IBS Director of Product Development.
WiFiFee a wireless internet service provider in an area where high speed DSL is readily available uses InterMapper to make sure that services are always available. Since WiFiFee customers rarely, if ever, suffer a network outage it can be tricky to calculate return on investment. But WiFiFee CEO Brian Epstein does have a solid metric: “We've never lost a customer.”
American IP, another wireless service provider, monitors its far flung equipment via InterMapper maps and submaps. RemoteAccess allows technicians to check maps from wherever they might be working – they have a constant view of what's working, and where there are problems. Steven Puckett reports that “the biggest savings is in mileage and gas. I don't have to drive 30 minutes from my office to a site to see what's going on.”
School systems have to keep a tight rein on expenses yet their networks are a critical line to educational resources and an important communication link between teachers and parents. Mercer County Special Services School District needed to monitor its network but had to understand how a tool would help control costs. Rick Hillman, Mercer's Technology Manager remembers, “I told my Board of Education that buying InterMapper was like buying a 24x7x365 person to watch our network.”
Great customer service and pricing options are important in the telecommunications market where subscribers have lots of options. South Slope Cooperative Telephone Company is using InterMapper to find competitive advantage. Dan Swick, Director of Operations reports “InterMapper software and strip charts have allowed us to fraction T-1 internet links for our members. They can now purchase the bandwidth they need when they need it. We can also constantly monitor the usage and let them know when they get near capacity and within 48 hours upgrade them to the bandwidth they need.”
The Legal Aid Society of Middle Tennessee is also controlling costs bandwidth and staff costs with InterMapper. According to Ken McLemore, IT Coordinator, “We're always under pressure to squeeze pennies. InterMapper allows me to easily monitor bandwidth usage, so I can tell if we're getting our money's worth from our WAN circuits. I'm a self-taught network administrator: even so, with only a rudimentary understanding of networks and the tools available in InterMapper, I could immediately see what I most needed to know about my WAN."
“The biggest benefit is that InterMapper can do 80% of what an expensive 'system' can do for 20% of the cost.”
Jonathan Baber Director of Product Development Integrated Business Systems (IBS)
About Dartware – www.dartware.com
Dartware, LLC develops the InterMapper® family of network monitoring software. InterMapper earns quick return on investment by proactively alerting administrators to potential slow-downs, crashes, other business interruptions. Its real-time, color-coded maps and other data displays provide users with an instant view of their network and device status. Dartware's software is installed in financial services, healthcare, retail, education, government and non-profit, WISP, and ISP organizations around the world.