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Real Dollar Savings of Network Upgrade

By tomdav226 ·
We are working on a Network Infrastructure Upgrade project. In the course of getting the approvals for the expense the VP of Finance has demanded the Savings we can expect as a result of this upgrade. We are Changing over to manageable Cisco Routers, a Fiber backbone through our Plant area, two new Windows based servers and cat 5 wiring overhaul. We are out of ports on our hubs, running several server/client OS's and have direct cable runs from our main wiring closet to the network cards on most of our PC's We still have Thicknet. I can give him a million reasons to do this project but until I can show an actual dollar savings as a result of it he's not budgeing! Has anyone else had to deal with this?


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by timwalsh In reply to Real Dollar Savings of Ne ...

Your Finance VP is essentially asking for the Return on Investment (ROI) for your project. Your task is going to be to (try to) turn your "million reasons to do this project" into some tangible dollar amounts. Some parts of the project might be easy to show ROI directly. Other parts will be difficult. In the Downloads section of this website, under Templates and Checklists, at about #25 you will find a checklist for mapping ROI values. While it doesn't give any specific examples, it may get you thinking in the right direction.

Hope this helps.

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IT Initiatives vs Business

by Oldefar In reply to Real Dollar Savings of Ne ...

You are in the classic dilemma of justifying an IT initiative. One approach is the ROI, where you show some cost avoidance or productivity gain over time. In tough economic times this can be tough to sell.

An alternative approach is to back into a linkage with business objectives and business requirements. Here you are doing a gap analysis of what the current infrastructure is versus what it needs to be to support existing business requirements. This takes your technology initiative, which means nothing to the business leaders in itself, and makes it a critical aspect of the business requirements the business leaders and money managers know and love.

The key risk is exposing your organization as having failed to address these issues before. You will have to give up some prestige to win this battle.

The other risk is that your technology initiative really does not support the business requirements any better than your outdated infrastructure and so does not deserve the support of the finance VP. The up side here is that you may identify a better design that does support the business, which makes your organization a more valuable part of the overall business.

Good luck.

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