A look beyond TCO and ROI

Find more accurate accounting procedures to supplement TCO/ROI calculations.

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TCO and ROI are invaluable aids to IT managers trying to make sense of the bewildering range of choices they have to solve an equally bewildering array of challenges. But, as anyone who has ever gone through the calculation exercise knows, TCO and ROI sometimes seem to miss the point. For instance, these calculations may not completely account for the significant contributions that SANs can make in support of businesses in a 24 x 365...

marketplace.

Ken Duggan, a senior consultant in Enterprise Storage for Compaq, noticed how customers often struggled with efforts to explain purchase decisions -- and he saw that TCO and ROI didn't always seem to provide the answers.

About a year ago, Duggan says he began to investigate other ways of evaluating technology purchases. The result, a whitepaper, Business Value Methodology in Support of Networked Storage Architectures, suggests that more sophisticated and accurate accounting procedures must be used to supplement TCO/ROI calculations. Networked storage, and the associated tasks and solutions dramatically changed by it, the paper suggests, can be more accurately measured by a business value calculation methodology.

That methodology, devised for Compaq's StorageWorks by ITCentrix, a developer of IT value software, also has wide applicability to any networked storage decision-making, Duggan said. It includes TCO factors plus the real and tangible effect of losing access to the important applications that an organization relies on every business day.

Some of the specifics that the white paper focuses on include the "tax" paid by organizations for LAN-based IT infrastructure additions and unplanned outages per server as well as productivity increases generated by access to a particular application in an organization.

FOR MORE INFORMATION

The white paper is available here.

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  • Alan Earls often writes about things NAS and SAN in his weekly "SAN/NAS Update: Trends" column. View the latest
  • About the author: Alan Earls is a freelance writer in Franklin, MA.


    This was first published in May 2002
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