Understanding What IT Costs

ClearPath Forward3 minutes readMay 8th, 2012

The cost of providing the IT services necessary for a business is always a prime concern for the management responsible, especially in times of economic difficulty. Determining the true cost of IT systems is therefore vital. What factors should be considered? Understanding these factors is important if an accurate determination is to be made.

The so-called client/server revolution of the late 1980s to early 1990s illustrates what can go wrong. The goal was to replace mainframes with PCs connected to central file and database servers. The cheap and apparently powerful hardware dominated thinking, leading to major cost items being ignored. For example, people costs – mostly managing and supporting the systems – accounted for as much as 70% of the total cost of ownership. Much of the management work was performed by end users – it was not obvious or anticipated in advance.

I’ve been looking at the economics of Unisys ClearPath systems based on four sets of factors:

  1. Delivering IT services: the provisioning and continued operation of systems, with the necessary operations and system support people
  2. Reliability, availability and security: how the systems meet business requirements for mission-critical usage
  3. Developing and supporting applications: the cost of implementing new application services, including the integration of other systems and databases
  4. The business value of applications, measured in lost revenue, productivity, and business opportunity if the applications were unavailable for an appreciable amount of time.

As platforms for intensive transaction and associated batch processing, especially in mission-critical environments, Unisys ClearPath systems are excellent value when all the relevant economic factors are considered. You can read the full analysis in my recently-updated White Paper, Delivering Value: The Economics of ClearPath® Systems, so I’ll just mention three highlights.

First, the pay-for-use business model, based on metering technology, significantly reduces costs while improving performance. Planned peaks and unplanned traffic surges can be accommodated without the need to buy sufficient power to cope with any peak.

Secondly, the very high reliability of the systems allows the 24×7 availability that critical systems increasingly need to meet business commitments. Systems have run for over four years without a restart.

Finally, exceptional security levels – Unisys ClearPath systems are the only ones with no data access vulnerabilities in the NIST dataset – protect critical data in a threatening world. The economic consequences of data compromise can be ruinous, so security really matters.

We’ve also been developing a Total Cost of Ownership (TCO) model for Unisys ClearPath systems, and indeed other systems. The model comes in two forms. There’s a quick analysis, based on a small amount of input data, to give a rapid high-level view, deliverable in a day or so. And there’s a much deeper analysis of all the factors affecting costs.

The model calculates the TCO and its breakdown into various components – hardware, software, people, resources consumed and so on. Using this information, we calculate the cost per business item or items produced or processed by the organisation concerned. The items obviously depend on the business – some examples are passengers booked, banks accounts managed and vehicles produced.

Benchmarking against industry IT averages can also be done – how does an organisation stack up against its peers and others using a similar kind of technology? The model has been aligned with recognised sources of industry averages, so comparisons with factors such as cost per installed MIPS and efficiency of personnel can be made. The results so far show that Unisys ClearPath systems stand up very well, outperforming industry averages. Do read the White Paper to find out more!

Tags-   ClearPath Economics ClearPath Systems Total Cost of Ownership