Build a winning storage budget

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This article first appeared in "Storage" magazine in the May issue. For more articles of this type, please visit www.storagemagazine.com.

What you will learn from this tip: Building a storage budget

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-- and getting it approved -- is an annual uphill battle. By taking a business-plan approach to the process, you'll have a better chance of getting a green light.

To a beleaguered storage manager, it may seem like the CIO and CFO are working as a tag team to "Just say no" to storage budget proposals that call for an increase over last year's budget. So how can a storage director make a sustainable and substantiated case for the expenditures required to manage and protect one of the organization's most valuable assets, its data? By using facts, financials and fear, an organizationally aware and prepared storage director can present the CFO with a budget proposal that's based on familiar business terms, contains options for discretionary funding and focuses on tangible services provided to clients.

Talking tech to a CFO could spell doom for a budget proposal. But a budget proposal crafted in CFO terminology; addressing known CFO hot buttons, fears and motivations; and offering risk-reward options substantially increases the odds that your negotiations will yield an appropriate end budget. The budget should be presented as a proposal of prioritized segments, and be in the form of business plans that associate investment with reward and risk.

Step 1: Build a business plan

The first step is to build a mini business plan for each tier of service. The goal is to present the case for storage in a manner familiar to executive decision-making, allowing management to see what's being provided/sold, to whom, at what cost and, most importantly, the value at risk in this product/service offering. It's the latter component, the business impact value, that justifies the expenditure. The business plan should follow traditional formats, preferably those already used in your organization. Some key factors to consider include:

  • What are the attributes of this tier of service (the product definition)?

  • What's the value at risk (the dollar impact on the business if the data was lost)?

  • What business unit is buying this tier of product/service today? Is there a business transaction that can be directly related to storage growth?

  • How much storage, based on transaction projections, will be required?

    • Step 2: The facts

    This step involves developing the statistical evidence that will substantiate your proposed budget expenditure. You need to identify the following for each service tier:

  • How many gigabytes or terabytes of this product/service were sold last year and as far back as can be tracked?

  • What's the growth trend? Chart it.

  • What's the projected capacity based on transaction volume? Chart it.

  • What's the current allocated and available capacity? Chart it.

  • What did it cost (per gigabytes or terabytes) to deliver this tier of service in each of the last three years? Chart it.

  • What secondary or supportive costs are involved for each gigabyte or terabyte? The tiered cost model should include primary and secondary storage costs as well, particularly because the latter costs are often greater. Secondary costs might include:
      • - Archiving retention, retrieval and refresh costs.
      - Backup retention and retrieval costs.
      - DR testing costs.
  • What's the basis for administrative staffing? Build a model that includes a transactional basis for staffing numbers. At a minimum, the following aspects should be considered:
      • - Typically, a competent techie can master up to three different technologies.
      - Number of provisionings per month per employee.
      - Number of alerts per month per employee.
      - Number of cartridge ejects per month per employee.
      - Loadings based on complexity of the environment.

    Read more of this tip in Storage magazine.

    For more information:

    Five steps to a more efficient storage shop

    Topics: Storage strategy and planning

    Checklist: Five steps to a solid storage management team

    About the author: Dick Benton is a senior consultant with GlassHouse Technologies in Framingham, Mass., specializing in storage management practices and disaster recovery.

    This was first published in June 2005

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