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Downtime savings=(current downtime hours per year - expected downtime hours per year with new solution) x downtime business hours per year
Enabling a new business capability. Storage is a key component of an enhanced customer service-oriented application, such as providing personalized real-time frequent business data updates, rather than when time permits a large data processing and transfer. The new storage architecture improves customer satisfaction and could even enable new market or business opportunities.
New Business Capability=(number of new customers from new business/features + number of additional retained existing customers as a result of new features if any) x value per customer
These are less negotiable because they're required for legal compliance or are simply essential to the business. Good discipline still demands a consistent ROI analysis, which will ensure accountability when performance is measured. A rigorous ROI methodology will also highlight potential inefficiencies.
Avoiding risk. For 24x7 environments, where downtime is not an option, solid disaster recovery capabilities are necessary.
Risk Avoidance=(probability of disaster in given year x disaster cost + additional brand/business impact) x percentage risk reduction or recovery time savings with solution
Avoiding risk of noncompliance. Storage infrastructure is a critical component of compliance projects such as HIPAA or Gramm-Leach-Bliley, where non-compliance carries legal penalties.
Compliance Risk Avoidance=(fine from non-compliance x risk of fine + business/brand impact damage) x percentage risk reduction
Presenting new initiatives with a strong peer comparison helps ensure best-in-class corporate performance-a top-of-mind issue for CEOs, CFOs and boards of directors. In many ways, this is the next frontier of strategic budget planning. Benchmarking proposed spending against similarly sized companies in the same industry, with similar business models, assures competitive awareness. It also makes it more difficult to slash the budget based on an arbitrary industry-accepted percentage of company revenue.
The cyclical nature of the budget process requires a long-term view and a closed-loop process. Understanding and communicating the business value that storage brings to the equation is a critical first step to getting necessary financial support. Once the investment is made, the real work begins. Tracking a project and its ability to deliver as promised, brings accountability, provides an opportunity for adjustment and reinforces the message to the CFO and team that their concerns are being heard and heeded.
Storage administrators who learn now how to draw a direct line between investment and business value-both in the heated struggle of the budget process and long after the money has been spent, will find that next year's budget battle will be much easier.
This was first published in November 2002