Microsoft Core Infrastructure Optimization ROI - Sample Analysis
Analysis and Customized Assessment Results
Prepared By:Richard McKinney
Government Technology AdvisorMicrosoft / US State and Local Government
(615) 830-1222
Third party model, methodology and data provided by:
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
The Value of Infrastructure Optimization for Valued Customer CompanyIn an effort to determine directional opportunities for improving Valued Customer Company’s infrastructure optimization, a customized assessment was performed. In this assessment, opportunities for improvements were analyzed and the value and return on investment of recommended improvements quantified.
The assessment was completed on August 20, 2007. The assessment was performed using actual metrics collected from Valued Customer Company, using a third party independent business value assessment tool developed by Alinean (http://www.alinean.com), and including independent research metrics and analysis by IDC, Gartner Consulting Research (GCR) and Wipro.
This analysis provides the basis for a comprehensive infrastructure optimization improvement plan. Although results are not guaranteed from this study, the results do quantify the opportunities for improvement, present a roadmap of recommended improvements, and estimate the costs, value and return on investment from implementing infrastructure optimization best practices.
Infrastructure Optimization Results Summary for Valued Customer CompanyImplementing the proposed infrastructure optimization practices and proposed Microsoft infrastructure yields significant business value for Valued Customer Company and the 5,000 total computer users, 3,500 total PCs, 0total thin clients, 1,500 mobile messaging devices, and 271 servers that the IT organization supports and are under consideration for optimization.
Overall, the proposed infrastructure optimization project is expected to take Valued Customer Company from:
its current Basic level
to Rationalized.
The proposed improvements, from the current (as is) IO level, to the proposed (to be), is projected to yield the following results:
Reduces net total costs per user per year from $2,436.58 to $2,229.28
Improves overall IT productivity through task automation and proactive avoidance, reducing labor related efforts on Client and Server IT Operations and Administration from:
o 418.70 full time equivalents (FTEs) in-house resources to 284.94 FTEs under the optimization plan, a reallocation opportunity of 133.76 FTEs (Year 1)
o 0.00 FTE out-sourced / contract resources to 0.00 FTEs under the optimization plan, a reallocation opportunity of 0.00 FTEs (Year 1)
o Reduce the need for managed services from $0 to $0 per year (Year 1)
Reduces service desk calls from 6,092.3 total calls per month to 2,540.5 total calls per month
Helps avoid net total capital expenditures for servers, client computers and software of $752,351 over the next 5 years.
Helps avoid net total support and maintenance contract and other non-labor operating expenditures of $2,412,251 over the next 5 years.
Has the potential to reduces indirect costs such as end user operations and downtime per user from $218.88 to $83.10 per year, a savings of $135.78 per year per user
Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Yields a total of $7,758,851 in direct benefits, and $5,124,578 in indirect benefits over the next 3 years (risk adjusted results)
The project will requires a $1,806,130 initial investment and $2,904,736 cumulative investment over 3 years.
Comparing costs and benefits, the project is expected to deliver:
Risk Adjusted ROI of 280%
Net Present Value (NPV) savings of $7,850,242
Payback period of 11.0 month(s)
Note: Risk adjustments help to create more realistic results, accounting for initial project deployment schedules, direct / indirect benefit realization, and adoption / deployment schedules. This project has been risk-adjusted for an overall deployment schedule of 3 months, realized benefits to include 100.0% of direct benefits and 100.0%of indirect benefits and a deployment schedule (adoption curve) of 100.0%,100.0%, and 100.0% over each successive year of the analysis..
IDC Infrastructure Optimization ResearchAlthough the average IT budget has increased 5-6% over the past year, too much of the current spending remains allocated to keeping the lights on, 61% per year, providing only 14% of annual spending for innovative new applications and functions the business needs for a competitive edge. The highest performing organizations realize that the ability to reallocate precious IT spending from keeping the lights on to innovation can help drive superior competitive. With 56% of infrastructure total cost of ownership devoted to labor or equivalents, the obvious focus should be on improving IT productivity in order to free resources for innovation.
Looking for the most effective way to improve IT productivity while driving higher service levels, agility and innovation, IDC in 2006 and 2007 conducted studies of almost 1,000 worldwide IT organizations examining best practice levels and costs / business value. The research focused on three metrics of the IT infrastructure:
o IT labor costso Service levelso Business agility
Based on the study group’s capability and maturity best practices, IDC segmented the organizations into the following groups:
Basic – IT organizations are the least efficient performers and have high costs and average service levels and agility. These organizations typically use few best practices and as a result have higher management costs and lower service levels. These organizations have the lowest percentage of spending on innovation, because more of the budget needs to be allocated to day to day operations.
Standardized – IT organizations have somewhat better IT costs with similar service levels and agility when compared with Basic organizations. These firms leverage some of the easier-to-implement best practices. These companies have average levels of innovation investments.
Rationalized – IT organizations have very low IT labor costs and show modest improvements in service levels and agility compared with the two lower groups. These organizations use many IT best practices and automate and standardize the IT infrastructure wherever possible. This leads to more funds being available for innovation investments.
Dynamic – IT organizations shift the focus from cost reductions to enabling business with optimal service levels and agility. Dynamic organizations may even choose to accept best practices that increase costs to optimize service levels and agility. Few Dynamic organizations
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
exist today, largely because many of the prerequisite technologies are not available from a single vendor and must be assembled from an array of technologies from multiple vendors. No organizations that qualified as Dynamic were interviewed for this research.
These four groups are collectively defined within a framework known as the Infrastructure Optimization Model (IOM). Microsoft was the lead developer of the IOM, an operational benchmark for gauging the maturity of a company’s IT infrastructure. IDC’s research proved that understanding and migrating through levels of this optimization model yielded significant cost savings, service level and agility improvements, and a healthy ROI for the average organization.
PC Infrastructure Optimization
Focusing on PC infrastructure improvements, IDC researched potential improvements, and developed a set of highest / best impact practices which help progress levels, and deliver the highest ROI.
IDC Researched IOM Results for PC Optimization (estimated value per user per year) Desktop Directory
ServicesManagemen
t
Centrally Managed PC Settings & Configurations $190
Comprehensive PC Security $130
Standard Desktop Strategy $110
PCs Managed by GPO $120
Comprehensive Directory Solution $120
Reduction of 3rd Party Application Directories $90
Automated User Provisioning $50
Standard System Management Tool Vendor $110
Use of Packaging Tools with Automated Software Distribution $120
Centrally Managed PC Applications $70
Key findings of this PC Optimization study by IOM level are as follows:
IT labor (annual labor costs per PC)o Basic: $1,320o Standardized: $580o Rationalized: $230
Service levels (Number of service desk calls per PC per year):o Basic: 8.4o Standardized: 8.5o Rationalized: 7.7
Business agility (time to deploy a new business applications, evaluation, procurement, and deployment):
o Basic: 5.4 weekso Standardized: 5.2 weekso Rationalized: 4.3 weeks
Implementing these types of infrastructure optimization practices, as well as others can dramatically reduce keeping the lights on investments. From the IDC research, advancing from Basic to Rationalized can result in an 82% labor reallocation benefit – the ability to invest from
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
$800 to $1,100 per user per year in incremental innovation while maintaining the same level of IT spending as today, increasing service levels and improving business agility.
Server Infrastructure Optimization
Focusing on Server infrastructure improvements and best practices, IDC researched potential improvements, and developed a set of highest / best impact practices which help progress levels, and deliver the highest ROI.
IDC Researched IOM Results for Server Optimization (estimated value per user per year)
Est. Value per User per Year
Improved Server Management Standards Need from IDC
Improved Ability to Add Server Capacity
Improved Server Troubleshooting/Failure ResolutionImproved New Server Software/Versions ManagementImproved Server User Administration (adds, changes, removals)
Improved Server Maintenance
Improved Server Operating System Maintenance
Improved Server Application/Service Maintenance
Improved Server Storage and File Management
Improved Server Backup and System Recovery
Improved Server Daily Monitoring
Improved Server Threat / Situation Assessment
Key findings of this Server Optimization study by IOM level are as follows:
IT labor (annual labor costs per PC)o Basic: $1,320o Standardized: $580o Rationalized: $230
Service levels (Number of service desk calls per PC per year):o Basic: 8.4o Standardized: 8.5o Rationalized: 7.7
Business agility (time to deploy a new business applications, evaluation, procurement, and deployment):
o Basic: 5.4 weekso Standardized: 5.2 weekso Rationalized: 4.3 weeks
IDC Research Overview
Additional information on these studies and research can be obtained from the following white papers:
IDC Core Infrastructure Optimization White Papers
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tom, 01/03/-1,
Need the values from final report … not correct / just placeholders
Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
The relationship between IT labor costs and best practices for managing the Windows desktop
The relationship between IT labor costs and best practices for identity and access management with Active Directory
Windows Server Best Practices
The relationship between IT labor costs and best practices for Systems Management Server
Messaging and Collaboration Best Practices
Developing an IO Strategy
Analysis of the business value of Windows Vista
Microsoft White Papers
Infrastructure Optimization: Driving Down the Costs of the Business Desktop
Microsoft Desktop Optimization Pack for Software Assurance - Wipro Product Strategy and Architecture Practice’s Analysis of Features, Cost Benefits, and Effects on IT Best Practices that Improve IT Infrastructure Optimization
Valued Customer Company’s ProfileValued Customer Company was analyzed and the following company profile information was documented with the team:
Industry: Regional / State / Local Government
Location: United States
Group Analyzed: Test Analysis for S&LG
Number of users supported: 5,000 users
Users were distributed as follows:
Employee Type Distribution
Higher performance workers 5.0% or 250 workers
Knowledge workers 47.0% or 2,350 workers
Structured task workers 33.0% or 1,650 workers
Data entry workers 15.0% or 750 workers
Road warriors 10.0% or 500 workers
The organization consists of the following site profile:
3 headquarters / campus / main sites and 30 satellite / branch offices
1 different countries / regions
10 unique business units
55.0% local IT support (versus remote with travel to provide local)
Total number of PCs was found to be: 5,000 including 3,500 desktops and 1,500 laptops. The current PC profile was found to be as follows:
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Operating System Distribution
Microsoft Windows Vista / Vista
Enterprise
0.0% or 0 PCs
Microsoft Windows XP SP2 0.0% or 0 PCs
Microsoft Windows XP 100.0% or 5,000 PCs
Microsoft Windows 2000 Pro 0.0% or 0 PCs
Microsoft NT4 Workstation and Windows 95/98
0.0% or 0 PCs
Non-Microsoft Client Computers 0.0% or 0 PCs
Total number of thin clients was found to be: 0
Total number of Microsoft Windows Mobile messaging devices was found to be 1,500 and other mobile messaging devices were: 0
The total number of servers was indicated to be 271, with the following workload profile:
143 File / Print Servers
50 Directory / Networking Servers
33 Security Servers
28 Messaging and Collaboration Servers
17 Other Servers
The current servers were determined to have the following operating system profile:
0 Windows NT Servers
0 Windows 2000 Servers
271 Windows Server 2003 servers
0 Linux Servers
0 UNIX Servers
0 Other OS Servers
The total storage was determined to be 5,189.7 GB in total, with total per server of:
1,430.0 GB for File / Print Servers
500.0 GB for Directory / Networking Servers
330.0 GB for Security Servers
2,441.4 GB for Messaging and Collaboration Servers
488.3 GB for Other Servers
The organization was determined to spend $90,000 WAN networking fees between main sites and branch offices, and $500,000 annually on dedicated security hardware (not included in security servers above) for VPN, firewalls for offices
Valued Customer Company’s Unique Opportunities for Improvement
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
The analysis measured the current practice optimization, total cost of ownership, service levels and business agility for the Test Analysis for S&LG group. The results indicated that the organization:
Is currently at a Basic infrastructure optimization level, on measured progressive levels of maturity, cost reductions and service from Basic, through Standardized and Rationalized, onto Dynamic.
Currently spends $2,217.70 in total direct costs per user per year consisting of:
o $4,045,500 in IT operations and administration labor or equivalents per user per year ($4,045,500 total), including:
$338.67 per user ($1,693,350 total) for client computer operations and administration (including PC engineering, PC image management, PC security management and PC security risk mitigation)
$189.25 per user ($946,250 total) for server operations and administration, server image management, server security patch management and server security risk mitigation
$238.09 per user ($1,190,450 total) for service desk
$43.09 per user ($215,450 total) for tools and directory management
o Commits 45.48 total for in-house FTEs and 0.00 outsourced / contract total FTEs to core infrastructure management, including 34.70 for client computer operations and administration and 10.78 for server operations and administration
o Receives an average of 6,092.3 service desk calls per month to the service desk per user including 536.1 escalated level 2 calls per month, and 493.5 escalated level 3/ dispatched calls per month
o $606.00 in IT capital per user per year including costs for PC hardware and software, thin client hardware and software, mobile messaging device hardware and software, server hardware and software, storage hardware and software, and dedicated security hardware costs
o $404.76 in additional operating expenditures (non-labor) per year including support and maintenance contracts, facilities and overhead costs, WAN bandwidth expenditures
Currently has $1,094,400 in total indirect (soft) costs ($218.88 per user) including costs for end user operations, service desk user impacts and availability.
IT Optimization Current Practices RankCurrent (As Is) vs. Industry Average vs. Industry Leader
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
The organization’s current practices, average industry performers and best in class performer rankings for comparison (Source: Valued Customer Company and IDC)
Valued Customer Company’s Recommended Improvement PlanExamining the current practices, the analysis indicated that the organization could improve to a Rationalized level by implementing the following recommended practices:
Recommended PC IOM Practice Selected?
Optimized PC Infrastructure
Centrally Managed PC Settings and Configurations
No or limited administrative rights assigned to end users Yes
Group Polices are used to prevent users from changing system
settings that jeopardize PC reliability and security Yes
Group Policies are used to ensure that users only install IT
sanctioned software Yes
Push/pull automated software distribution and / or virtualized
dynamic application delivery (streaming) Yes
Standard Desktop Strategy
Enforcing PC procurement policies for standardized hardware,
software and system configurations Yes
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Recommended PC IOM Practice Selected?Standardization upon the latest Windows operating system within
18 months of release (Vista / Vista Enterprise) Yes
Use of a minimal number of corporate images Yes
Comprehensive PC Security
Notebooks and desktops are equipped with antivirus utilities Yes
Notebooks and desktops are equipped with anti-spyware/malware
utilities Yes
Notebooks are protected by centrally managed PC firewalls Yes
Network Access Control (NAC) is used for PCs entering the network No
Automated patch distribution system is in place for all notebooks
and desktops Yes
Data Protection & Recovery
Backup/restore solution on all desktops, with an SLA No
Optimized Identity and Access Management with Active
Directory
PCs Managed by Group Policy Objects
Users are prevented from editing the registry Yes
Approved applications are published in the directory Yes
Operating system settings are configured by Group Policy Objects
(GPOs) Yes
Start menu is configured and icons were limited / optimized Yes
Start-up and log-in scripts are pushed to PCs Yes
Internet settings are configured by GPOs Yes
Security settings were configured by GPOs Yes
Application settings were configured by GPOs Yes
Comprehensive Directory Solution
Standardizing on a single directory for authentication Yes
Simplified sign-on by synchronizing directories with meta directory
service No
Automated password reset Yes
Reduction of Third-Party Application Directories
Reducing the number of third party application directories Yes
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Recommended PC IOM Practice Selected?
Automated User Provisioning
Automate user provisioning to automate creation, deletions or
changes to user access rights No
Improved System Management
Use of packaging tools with automated software distribution Yes
Standardizing on a single systems management infrastructure Yes
Centrally managed PC applications Yes
Total
Recommended Server IOM Practice Selected?
Server Management Optimization
Improved Server Management Standards
Server clustering Yes
Load balancing within service/cluster Yes
Standardized Process for Server Adds, Moves and changes Yes
Virtualization Utilized Yes
Workload Management Utilized No
Standardized hardware Yes
ISO 27001 Certified No
Improved Ability to Add Server Capacity
Server Imaging or Cloning Yes
Standardized Images Yes
Automated deployment process Yes
Ability to deploy w/o downtime Yes
Automated integration with Systems Management Yes
Improved Server Troubleshooting/Failure Resolution
Automated trouble handling Yes
Integrated with main trouble handling infrastructure Yes
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Recommended Server IOM Practice Selected?
Ability to decommission w/o downtime Yes
Integrated with Vendor QA infrastructure Yes
Improved New Server Software/Versions Management
Software Imaging or Cloning Yes
Standardized Images Yes
Automated deployment process Yes
Automated integration with Systems Management Yes
Improved Server User Administration (adds, changes,
removals)Automated Provisioning Yes
Automated De-commissioning Yes
Integration with central ID / Metadata Yes
Single Sign-On Yes
Improved Server Maintenance
Integration with predictive maintenance database Yes
Remote Diagnostics capability Yes
Improved Server Operating System Maintenance
Automated Patch testing Yes
Automated Patch deployment/rollback Yes
Remote Diagnostics capability Yes
Remote 'healing' capability No
Improved Server Application/Service Maintenance
Automated Patch testing Yes
Automated Patch deployment/rollback Yes
Ability to deploy w/o downtime Yes
Remote Diagnostics capability Yes
Remote 'healing' capability No
Integrated with trouble handling infrastructure Yes
Improved Server Storage and File Management
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Integration with Intrusion Detection System (IDS) Yes
Standardized Security Process Yes
Automated System Isolation Yes
Out of band management Yes
Automated System Re-configuration No
Valued Customer Company’s Benefits from the Proposed PlanThese practices are expected to generate the following IT labor productivity improvements:
Annual Labor Costs per User Current (As Is) Optimized (To Be) Annual Benefits per User
PC Engineering $334.90 $188.11 $146.79
PC Image Management $1.37 $0.06 $1.31
PC Security Patch Management $0.36 $0.07 $0.29
PC Security Risk Mitigation $2.04 $0.16 $1.88
Server Operations and
Administration
$179.97 $109.68 $70.29
Server Image Management $0.89 $0.40 $0.49
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Annual Labor Costs per User Current (As Is) Optimized (To Be) Annual Benefits per User
Server Security Patch
Management
$2.04 $0.71 $1.33
Server Security Risk Mitigation $6.35 $6.35 $1.94
Service Desk $238.09 $72.29 $165.80
Tools and Directory
Management
$43.09 $20.49 $22.60
Total Annual Labor Costs per
User
$809.10 $393.91 $415.19
Total Annual Labor Costs $4,045,500 $1,969,550 $2,075,950
With the proposed solutions, the current IT spending on some hardware, software, support and maintenance contracts may be avoided by consolidating hardware, improving utilization, optimizing licensing, or replacing current utilities and management software with the proposed practices / technology.
Annual Costs per User Current (As Is) Optimized (To Be) Annual Benefits per User
PC Purchases $389.88 $464.28 ($74.40)
Thin Client Purchases $0.00 $0.00 $0.00
Mobile Messaging Devices $37.50 $37.50 $0.00
Client Software $0.00 $52.98 ($52.98)
Client Hardware Support
and Maintenance Contracts
$15.00 $15.00 $0.00
Client Software Support and
Maintenance Contracts
$75.00 $75.00 $0.00
PC Power $143.08 $96.58 $46.50
Server Hardware Purchases $78.62 $54.41 $24.21
Server Software Purchases $0.00 $123.28 ($123.28)
Server Hardware Support
and Maintenance Contracts
$58.97 $40.81 $18.16
Server Software Support
and Maintenance Contracts
$69.52 $49.22 $20.30
Server Facilities and
Overhead
$25.19 $17.88 $7.31
WAN Network Bandwidth $18.00 $18.00 $0.00
Dedicated Security
Hardware
$100.00 $97.00 $3.00
Total per User per Year $1,010.76 $1,141.94 ($131.18)
Total per Year $5,053,800 $5,709,700 ($655,900)
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Additional indirect and business benefits from the proposed infrastructure optimization include:
Additional Indirect and Business Benefits
Annual Indirect and Business Benefits per User
Reduced end user operations
costs
$114.13
Reduced service desk problem
resolution downtime$64.96
Reduced PC unplanned
downtime
$17.41
Reduced PC planned downtime $2.25
Reduced server unplanned
downtime
$37.14
Reduced server planned
downtime
$0.37
Reduced security breach user
impacts
$9.66
Reduced PC data loss / recovery
costs
$3.99
Improving search effectiveness $29.02
Improving search efficiency $74.15
Improving business agility - new applications development and deployment
$0.00
Improving business agility – reorganizations, mergers and acquisitions
$0.00
Total Indirect and Business Benefits $353.08
Implementation Plan and Investment
To achieve these direct labor savings, as well as additional indirect savings and business benefits would require implementing a set of recommended incremental Microsoft infrastructure to support and enable these best practices including:
Proposed Technology Needed to Implement Selected Best Practice Improvements
Selected?
Windows Vista / Vista Enterprise upgrade Yes
Additional features of Windows Vista Enterprise No
Windows Server 2003 R2 upgrade No
Active Directory configured and deployed (upgrade or new implementation) Yes
The development and deployment of Group Policy Objects (GPO) Yes
The use of Microsoft Systems Management Server (SMS) 2003 (upgrade or new
implementation)Yes
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Proposed Technology Needed to Implement Selected Best Practice Improvements
Selected?
Microsoft Desktop Optimization Pack for Software Assurance (SA) No
SoftGrid Application Virtualization
Desktop Error Monitoring (MSCDEM): Microsoft System Center Desktop Error
No
Asset Inventory Services (AIS) No
Diagnostic and Recovery Toolset (DART) No
Advanced Group Policy Management (AGPM) No
Desktop Error Monitoring (MSCDEM) No
Anti-virus software Yes
Anti-spyware / malware software Yes
Network access control software No
Microsoft Identity Integration Server or other meta directory solution for directory and
Microsoft Visual Studio 2005 and .NET Framework Yes
Wise or InstallShield Packaging Tools No
The investment to achieve these best practices and implement the requisite infrastructure is estimated to be $1,806,130 initially and $2,904,736 over the 3 year analysis period. The costs consist of $1,817,720 in capital investments, and $1,087,016 in total operating investments.
TCO Comparison for Valued Customer CompanyComparing the TCO of the current environment versus the proposed optimization plan indicates a total available savings of $3,165,614 per year (on average), and $9,496,842 cumulative over 3 year analysis period.
The TCO Comparison and Benefits calculates the total cost of ownership (TCO) for Solution A: Current (As Is) - Basic and Solution B: Optimized (To Be) - Rationalized, and calculates the benefits of migrating / comparing to Solution B: Optimized (To Be) - Rationalized. The TCO Comparison does not reflect realized benefit and schedule scalars.
The average annual TCO comparison (over a 3 year analysis period) is:
TCO Comparison Average by Year
Solution A Current (As Is) - Basic
Solution B Optimized (To Be) -
Rationalized
Difference(A - B)
Difference(A - B)%
IT Costs
PC Purchases $2,101,200 $2,225,195 ($123,995) -5.9%
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Additional OS Licensing Rights for Virtual PC with Vista Enterprise
$0 $0 $0 0.0%
Incremental Reduction in Image Management with Vista Enterprise
$0 $0 $0 0.0%
PC Power $729,803 $492,622 $237,181 32.5%
Optimized Infrastructure Investment - IT Capital Investment
$0 $184,283 ($184,283) 0.0%
Optimized PC Infrastructure Investment - IT Labor and Service
$0 $318,841 ($318,841) 0.0%
Total IT Costs $9,647,809 $7,764,785 $1,883,024 19.5%
Business Operating Costs
Optimized PC Infrastructure Investment - Business Unit Investment
$0 $43,498 ($43,498) 0.0%
End User Operations $2,110,947 $1,505,376 $605,571 28.7%
Service Desk Problem Resolution Downtime
$407,273 $62,587 $344,686 84.6%
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
PC Unplanned Downtime $153,959 $61,584 $92,375 60.0%
PC Planned Downtime $51,320 $39,345 $11,975 23.3%
Server Unplanned Downtime $443,402 $246,335 $197,067 44.4%
Server Planned Downtime $4,926 $2,955 $1,971 40.0%
Security Breach User Impact $69,522 $18,250 $51,272 73.7%
PC Data Loss / Recovery $30,942 $9,771 $21,171 68.4%
Total Business Operating Costs
$3,272,291 $1,989,701 $1,282,590 39.2%
Total $12,920,101 $9,754,487 $3,165,614 24.5%
BenefitsAn examination of the benefits from implementing the plan results in cumulative 3 year savings of $7,758,851 in direct benefits, and $5,124,578 in indirect (soft) benefits.
The top benefits include reducing costs and improving business value in each of these areas:
Benefits Summary Year 1 Year 2 Year 3 Total
Total Benefits (to Solution
B from Current (AS IS))
$3,363,093 $4,630,174 $4,890,162 $12,883,428
Top Benefits
IT Service Desk $621,769 $866,332 $918,312 $2,406,412
Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Investment DetailsThe investment is expected to be $1,806,130 in non-recurring Initial costs, and a total of $2,904,736 cumulative costs over the entire 3 year timeframe. Capital is typically expended in Initial while Year 1 covers deployment labor.
Investment Summary Initial Year 1 Year 2 Year 3 Total
Total Investment $1,806,130 $1,080,224 $9,191 $9,191 $2,904,736
Active Directory Hardware and Software Upgrades or Additions (IT)
$32,196 $0 $5,795 $5,795 $43,786
Application Development and Customization Software (IT)
$0 $0 $0 $0 $0
New Mobile Messaging Devices (IT)
$0 $0 $0 $0 $0
Personal Productivity Software (IT)
$0 $0 $0 $0 $0
Server Hardware Upgrade Costs (IT)
$0 $0 $0 $0 $0
Business Application Software (IT)
$0 $0 $0 $0 $0
Group Policy Software Utilities (IT)
$0 $0 $0 $0 $0
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Security and Identity Access Management Utilities (IT)
$0 $0 $0 $0 $0
Client Access Licenses (IT) $0 $0 $0 $0 $0
Server Hardware Purchase Costs (IT)
$0 $0 $0 $0 $0
Software Assurance (IT) $0 $0 $0 $0 $0
PC New Hardware Costs (IT) $0 $0 $0 $0 $0
Windows Server 2003 Operating System Licensing Costs (IT)
$0 $0 $0 $0 $0
New Thin Clients (IT) $0 $0 $0 $0 $0
Microsoft Desktop Optimization Pack Hardware and Software (IT)
$0 $0 $0 $0 $0
Total Capital Expenditure $1,806,130 $0 $5,795 $5,795 $1,817,720
Operating Expenditure
PC Upgrade IT Labor and Services (IT)
$0 $315,305 $0 $0 $315,305
Server Training and Learning (IT)
$0 $170,152 $0 $0 $170,152
Group Policy IT Labor and Services (IT)
$0 $117,049 $0 $0 $117,049
Active Directory IT Labor and Services (IT)
$0 $112,971 $0 $0 $112,971
SMS IT Labor and Services (IT)
$0 $103,115 $0 $0 $103,115
Security and Identity Access Management Utilities IT Labor and Services (IT)
$0 $80,367 $0 $0 $80,367
User Training and Learning Costs (BU)
$0 $71,492 $0 $0 $71,492
Upgrade User Task Productivity Impact (BU)
$0 $29,822 $0 $0 $29,822
MOM IT Labor and Services (IT)
$0 $28,525 $0 $0 $28,525
Incremental Best Practice Implementation Labor Costs (IT)
$0 $16,982 $3,396 $3,396 $23,774
Incremental Service Desk Calls - User Downtime (BU)
$0 $23,764 $0 $0 $23,764
Upgrade Downtime Impact (BU)
$0 $5,416 $0 $0 $5,416
Microsoft Desktop Optimization Pack IT Labor and Services (IT)
$0 $5,264 $0 $0 $5,264
Other IT Costs (IT) $0 $0 $0 $0 $0
Application Development and Customization Labor and Services (IT)
$0 $0 $0 $0 $0
Exchange 2003 Deployment Labor and Services (IT)
$0 $0 $0 $0 $0
Server Hardware and OS Deployment Labor (IT)
$0 $0 $0 $0 $0
Other Business Unit Costs (BU)
$0 $0 $0 $0 $0
Total Operating Expenditure
$0 $1,080,224 $3,396 $3,396 $1,087,016
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Return on InvestmentThe proposed project is expected to deliver the following benefits, grouped regarding business impact as
$7,758,851 in IT cost reductions$5,124,578 in business operating efficiency improvements
The proposed project is expected to help the company meet the following goals and drive the following benefits:
Goal Cumulative Value
Reduce IT Operations and Administration Costs
$6,281,476
Improve End User Operations $1,656,419Improve User Productivity $1,497,330Improve Service Effectiveness $942,820
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Reduce Facilities and Overhead Costs $754,191Reduce IT Capital Costs $723,183Reduce Planned Downtime $577,183Reduce Unplanned Downtime $450,827
The proposed project is expected to deliver the following benefits to specified stakeholders:
Stakeholder Cumulative Value
Operations Director $4,349,247Service Desk Manager $3,349,231IT Director $2,760,997PC Manager $2,188,296Security Manager $235,658
To implement the proposed project will require a 3 year cumulative investment of $2,904,736 including:
$1,806,130 in initial expenses $1,817,720 in capital expenditures $1,087,016 in operating expenditures
Comparing the costs and benefits of the proposed project using discounted cash flow analysis and factoring in a risk-adjusted discount rate of Risk Adjusted Discount Rate: 9.5% the proposed business case predicts:
Risk Adjusted Return on Investment (RA ROI) of 280% Return on Investment (ROI) of 344% Net Present Value (NPV) savings of $7,850,242 Internal Rate of Return (IRR) of 162% Payback period of 11.0 month(s).
Note: Risk adjustments help to create more realistic results, accounting for initial project deployment schedules, direct /
indirect benefit realization, and adoption / deployment schedules. This project has been risk-adjusted for an overall
deployment schedule of 3 months, realized benefits to include 100.0% of direct benefits and 100.0%of indirect benefits
and a deployment schedule (adoption curve) of 100.0%,100.0%, and 100.0% over each successive year of the analysis..
An analysis of cumulative costs versus cumulative benefits highlights the payback period.ROI Analysis (Solution B)
Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
NPV Savings $7,850,242IRR 162%Payback period (including deployment period)
11 month(s)
Risk Adjusted Discount Rate
9.5%
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Appendix A: Valued Customer Company’s Estimated Microsoft Desktop Optimization Pack for Software Assurance (MDOP) Costs and BenefitsThe Microsoft Desktop Optimization Pack for Software Assurance (MDOP) is a dynamic desktop solution available to Software Assurance (SA) customers, which employs innovative technologies to help reduce the TCO of the Windows desktop by accelerating OS and application management, and enhancing IT responsiveness and end-user uptime.
MDOP is a product suite of technologies that includes:
SoftGrid Application Virtualization: Microsoft SoftGrid Application Virtualization dynamically delivers applications to PCs reducing application deployment and support costs.
Asset Inventory Services (AIS): Microsoft Asset Inventory Services provides intelligence about installed software on an organization’s PCs.
Diagnostic and Recovery Toolset (DART): Microsoft Diagnostic and Recovery Toolset reduces the time it takes the service desk to diagnose and repair PCs.
Advanced Group Policy Management (AGPM): Microsoft Advanced Group Policy Management simplifies the management of Group Policy Objects in an organization.
Desktop Error Monitoring (MSCDEM): Microsoft System Center Desktop Error Monitoring enables IT to proactively manage problems with applications and system components that crash or cause live PCs to hang
The table below compares the 3-year total estimated costs benefits of MDOP:
Cost Type Total 3-Year Cost per PC
Hardware
Software
IT Labor
User Labor
Total
The table below summarizes estimated costs per PC to deploy MDOP:
Cost Type SoftGrid AIS DART AGPM MSCDEM
Hardware
Software
IT Labor
User Labor
Total
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
This tool estimates 4 types of benefits that MDOP enables. The first 3 impact IT Labor. The 4th impacts user labor (an indirect/intangible benefit).
Best Practice "Sustain" Benefits: MDOP is expected to significantly reduce the costs to maintain (or enhance benefits of) 5 of the 7 IDC best practices. This is an annual/on-going benefit that applies to any of these 5 best practices that the company has already implemented or plans to implement.
Best Practice Implementation Benefits: MDOP also can help to significantly reduce the costs of implementing 5 of the 7 best practices. This is a one-time benefit for any of the 5 best practices that the company plans to implement.
Other IT Labor Benefits: MDOP also enables various other benefits that are not modeled via the IDC best practices. Example: DART's ability to reduce help desk issue resolution time.
User Labor Benefits: MDOP can significantly reduce user labor (e.g. PC issue resolution time and downtime)
These benefits (per PC) are summarized below:
Benefit Type One-Time Annual 3-Year Total
Best Practice Sustain Benefits
Best Practice Implementation
BenefitsOther IT Labor Benefits
User Labor Benefits
Total
Note: this assumes 100% benefit realization over 3 years.
The best practice-enabled benefits per PC are shown below by best practice:
Best Practice Best Practice Implementation
Benefits
Annual Best Practice Sustain
BenefitsStandard Desktop Strategy
Single Systems Management
ToolAutomated Packaged Software
Distribution
Centrally Managed PC Settings
& Configurations
Comprehensive PC Security
Total
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Infrastructure Optimization – ROI Tool Analysis and Customized Assessment Results
Appendix B: Windows Vista Enterprise Additional BenefitsIn addition to the indicated overall benefits, implementation of Windows Vista Enterprise can have additional benefits. This proposal excludes such benefits, as follows:
Additional Benefits of Vista Enterprise
Annual Benefits per user for Vista Enterprise
Additional OS Licensing Rights
for Virtual PC with Vista
Enterprise
$0.00
Incremental Reduction in Image
Management with Vista
Enterprise
$0.00
Improve UNIX Interoperability
with Vista Enterprise$0.00
Protection of Data with Vista
Enterprise$0.00
Total Additional Benefits of Vista Enterprise $0.00
