Spectrum analysis.

-from an IDC White Paper

In both enterprises and service provider organizations, the emergence of the network infrastructure as the delivery vehicle for ebusiness and other mission-critical applications is having profound implications for network management.

For one thing, as network availability becomes more and more critical and the cost of downtime escalates, IT departments are under increasing pressure to isolate and fix network problems as quickly as possible. At the same time, the criticality of the network infrastructure to the business is requiring that network, systems, and application management be brought together into a common strategy and integrated management solution.

Increasingly, the IT manager's prime responsibility is to provide reliable service to users with the performance needed to fulfill business objectives. Service level agreements (SLAS) have become the vehicle for quantifying that performance, and service-level management the means for measuring and validating SLA conformance.

Mapping IT resources to business processes. To assure service delivery with the agreed-upon SLA, IT professionals must be able to manage the full infrastructure of networks, systems, and applications within the business context of mapping if resources to the business processes they support. One of the established network management vendors striving to provide such service-level views across the entire infrastructure is Aprisma Management Technologies.

Aprism Xs solution is based on its Spectrum suite of products and a concept called Service Level Intelligence (SLI), which pinpoints problems affecting any aspect of service delivery. SLI is built on the auto-discovery, root-cause analysis, and event-correlation capabilities of its Spectrum suite of management applications. Spectrum uses modeling technology to discover, model, and monitor the entire if infrastructure, including the relationships among the modeled elements, providing an end-to-end perspective across networks, systems, applications, and users.

SLI includes service-level assurance elements to monitor and measure service delivery levels. Aprisma claims that this capability allows service providers to generate new revenue streams by offering differentiated

SLAS, and it enables both service providers and enterprises to back up their SLAs with comprehensive performance monitoring and measurement, coupled with automated response and reporting.

Aprisma says that SLI also reduces the number of false alarms and truck rolls because it provides the intelligence to isolate the root cause of problems with granular visibility within networks, systems, and applications to the individual physical, logical, firmware, hardware, or. software level. Further, by indicating which elements, services, and customers are affected, it allows the IT staff to prioritize their response based on business impact.

Areas of savings. To validate these claims and determine the business benefits and return on investment (ROI) of the Aprisma solution, IDC interviewed 17 Spectrum customers around the world, dividing the interviews among eight enterprises and nine service providers of various kinds, including wireless and cable operators, hosters, and application service providers.

The interviews focused an three critical areas of savings: management productivity, management efficiency, and availability.

* Management productivity, which assesses how effectively IT managers and their staff use their time, can have significant impact on fast-growing organizations. Besides reducing the cost of day-to- day operations, gains in management productivity improve the return on hardware and software resources and, more importantly, allow new initiatives to he implemented more rapidly.

* Management efficiency, which measures how many users each IT staff member can support, is determined by how well a management organization can realize economies of scale and scope with its people, practices, and tools. By achieving high management efficiencies, an organization can grow at a faster rate than the staff needed to support the IT infrastructure. In addition, the organization can expand the scope of the IT staffs management responsibilities without needing to add staff - an important benefit for high-growth companies.

* Availability, which represents the time the network is fully operational, has grown in importance in recent years as businesses have become increasingly network-dependent, making downtime more costly. With the advent of ebusiness, network availability has become even more critical since no business is conducted when the network is down.

In the companies surveyed, IDC measured IT productivity gains amounting to an average annual saving of almost $3.83 million from deploying Spectrum, including a saving of 54,322 man- hours in the time needed for network troubleshooting and repair. There was also a 24% reduction in time spent on help desk and user support activities, a 44% savings in staff hours for system setup and configuration, and a 70% savings in the time spent addressing security breaches. Savings in user productivity from the reduction in time lost to network admin tasks averaged a further $240,389 per year.

Increases in management efficiency from deploying Spectrum yielded payroll savings over three years of almost $4 million, based on a projected reduction in IT headcount growth of 42.7 full-time employees over three years and a three-year average loaded annual salary of $91,924. This translates into average annual management efficiency savings of more than $1.3 million.

In its survey, IDC determined both the business revenue lost from downtime and the losses from the impact of downtime on user productivity before and after deploying Spectrum. On average, the companies surveyed reduced the direct revenue lost from downtime by $877,222 annually. Increased employee productivity contributed a further savings of more than $4.4 million, giving a total saving from increased network availability of close to $5.29 million.

ROI analysis. In evaluating the total ROI of deploying Spectrum solutions, IDC used the payback and net present value (NPV) methodology. The NPV method calculates the value in todays dollars for the three year returns on an investment, including the annual average cost savings in management efficiency, management productivity, and availability.

For the Spectrum customers interviewed for the study, these savings totaled close to $10.69 million annually. IDC then accounts for the opportunity costs realised by not having invested the initial amount in some other instrument yielding a 12% return. This results in an average net present value of $25.68 million for the companies interviewed. Payback is the time required for the savings generated to equal the initial investment. Based on an average investment of $9.4 million over the three years, the payback with the Spectrum management solution for the companies surveyed averaged 37.6 days, yielding an average return on investment of 970%.

The complete paper titled 'Making the Business Case for Root-Cause Analysis and Service Assurance Software' is available from IDC 5 Speen St Framingham MA 01701 USA. www.idc.com

Figure 1

Average Annual Savings from Deploying Spectrum


User productivity            ($412,225) from reduced
                                        downtime, plus
                              $241,389  from fewer admin
                                        delays
Reduction in lost revenue    ($877,222)
Management productivity    ($3,827,270)
Management efficiency      ($1,333,270)

Source: IDC 2001

Note: Table made from pie chart

RELATED ARTICLE: Internet not working, say bankers

Research into thc service habits of 27 Financial Services Organisations by ICM Research, , showed that only 33% responded to an email request for information. Of these, only one offered a direct response to the question, rather than generic replies, and less than half were received within 24 hours of initial contact.

This is in contrast to the telephone, which prompted a 75% connection rate within five rings. Only 19% of agents were unable to answer a query on the first call. Results suggest, however, that these organisations are missing out on sales opportunities - only 41 % asked for the caller's name, let alone any contact details.

"The idea of a multi-channel customer service environment is just a marketing illusion for most banks," said Onyx Software. "We're told by advertisements that service is paramount and the customer is king, but we still have to rely on the old fashioned approach of picking up the phone to get anywhere. It's no good for the customer, who gets frustrated, and costly for the bank, because it can't get the economies of scale and low churn rates associated with the Internet."

www.onyx.com