Putting hard-dollar figures on soft-dollar productivity gains

As an analyst, one thing that convinces me of the value of a product is hard numbers. Excel and SPSS have become the most useful software tools at my disposal (yes, to the point where I’m doing spreadsheets to organize the family vacation!)

One of the reasons I’ve been so keen on all-in-one products for the branch office is because I’ve been analyzing the cost-benefits of the solutions. And the results are compelling.

These products, dubbed services gateways, unified threat management, or multi-function routers, combine routing and security tasks into a single device, eliminating the need to buy, install, program, and manage multiple devices at each branch location.

Nemertes develops detailed cost models to get into the “nitty-gritty” of the actual costs and benefits of various emerging technologies. What’s useful about these tools is that you easily enter your own data or use our default data, and within a few minutes, see how much you will (or won’t) save with a given technology. (For more information on the tools, please contact research@nemertes.com)

With all-in-one products, it’s pretty easy to calculate the price benefits of the up-front hardware investment. But what about the “soft” savings in IT problem/resolution or branch employee downtime (in terms of salary and revenue per employee)?

I’ve entered some data from three real companies, defined as small, midsize, and large based on revenue and number of locations. Even though the IT staffs at these companies didn’t really think they were spending all that much time troubleshooting at their branch offices, the numbers add up.

We gathered about 80 data points for this particular model, but just looking at some of the high-level figures for IT problem/resolution alone, here are the results:

* Professional-services firm: 17 branch offices housing 450 employees; 90 trouble tickets per month. Annual savings for IT problem-resolution is $30,941.

* Manufacturing company: 50 branch offices housing 4,250 employees; 1,200 trouble tickets per month. Annual savings for IT problem-resolution is $526,500.

* Entertainment company: 300 branch offices housing 115,200 employees; 23,040 monthly trouble tickets. Annual savings for IT problem-resolution is $9.76 million.

How are companies saving this much? We asked them to categorize their networking trouble tickets into levels 1, 2, and 3, based on complexity and the amount of time required to repair them. IT staffs with that have implemented services gateways have found an overall uptime/performance improvement of anywhere from 20% to 50%.

The improvement is the result of fewer physical line problems, the ability to repair one function without affecting the availability of others, the ability to upgrade/troubleshoot while relying on redundant functionality within the box, and the improved remote monitoring/management capabilities available in the products.

The improvement means fewer IT staff members or third parties are traveling to branch offices for repairs. And that’s an gain for the budget and for the staff’s time.