Hosted by Windows TCO Best Practices for

Hosted by Windows TCO – Best Practices for Managing Costs and Maximizing ROI Thomas Pisello CEO and co-founder Alinean™ - The IT Value Experts™ Author of “ROI for IT Solution Providers” (IEP – 2002)

Hosted by Why Is TCO Important? IT investment proposals increasingly require financial analysis and justification. CIO’s and senior IT managers are increasingly facing pressure to cost justify IT investments on a financial basis. - Gartner Group

IT Spending Peaks Hosted by IT spending rose from 18. 2% of all US business capital investments to a peak of 46. 7% Est. 20 % decline in US IT Spending from 2000 to 2003 Flat Spending Predicted 2002 to 2003, Up-tick in late 2003/early 2004 Source: Bureau of Economic Analysis, Table 5. 5. Real Private Fixed Investment by Type, [Billions of chained (1996) dollars], December 21, 2001,

IT Spending / Revenue Hosted by Alinean Value. IT™ Peer Comparison Software – Database of over 20, 000 US and international companies Best /Worst Ranking based on Information Productivity® = EVA/SG&A (Strassmann, Inc. )

Hosted by Peer. Map™ - IT Performance vs. Spending Frugal Leaders Investing Leaders Frugal Followers Investing Followers

Characteristics of Value Leaders Hosted by l Market Position • 65% of companies success related to market position Empirimetric) (PIMS Program – l Frugal • • • Strong project selection committees with fiscal discipline Modest new project budgets Self service to reduce administrative overhead Standardization and consolidation Agility: Able to scale spending to performance/market conditions quickly l Higher Project Success Rates • • Smaller projects with more milestones Strategic alignment, planning and benchmark measurement ROI, TCO and Value management discipline Strong business unit collaboration l Focus on Core Competencies • • Strategic outsourcing Higher training and career development spending Lower staff turn-over, satisfied employees Culture and mission Alinean, LLC

CIO Top Priorities – Spending Accountability Hosted by l Prove and improve the value of IT § Over 80% of companies now require ROI and TCO analysis to be performed on most IT investments § 65% of companies indicated that they do not have the knowledge or tools needed to do ROI and TCO calculations § 75% have no formal processes or budgets in place for measuring the ROI and TCO of IT projects § 68% do not measure ROI and TCO on IT projects 6 months after the work is completed. l Do more with less § IT Spending will remain flat in 2003 budgets, but spending backlog is building l Communicate more effectively to stakeholders § 44% say either the CEO or CFO is heavily involved in the decision making process § Business units are gaining control over the majority of IT decisions Sources: IDC, E&Y, Computer. World

Hosted by The TCO of Windows: Managing Costs and Maximizing ROI Technology investments now hinge less on features and functions and more on finance. - CFO Magazine Businesses are done with mere technology. From now on, the role of the CIO is to make money. - Paul Strassmann, Computer. World Columnist

Hosted by TCO – Capturing All Lifecycle Costs Plan Retire Change and Evolve Acquire Deploy Manage and Maintain 3 to 5 year lifecycle

TCO and ROI – Project Timeline Hosted by Revenue After Revenue & Profit Revenue Before Total Expenses And TCO Today IT Budget & Business Operating Expenses Project Costs Total Tangible Benefits As Is Total Expenses and TCO After Project To Be

Windows 2000 TCO Hosted by TCO = $6, 845 annual per PC Alinean 2003 – Windows 2000 environment with low best practices

Windows 2000 TCO by Category Hosted by $2, 738 $3, 902 Alinean 2003 – Windows 2000 environment with low best practices

TCO Drivers Hosted by Up to a 26% Savings with Best Practices Management Practices Capability and Maturity $500 to $1, 500 per PC to implement Est. savings of $1, 845 per PC/year Complexity and Use Service Levels, Availability and Performance Alinean 2003

Best Practices Hosted by Implementing a cohesive set of best practices can lead to cost reductions of more than 26% in PC TCO However, need to factor in cost of achieving best practices …. . ROI Alinean 2003

Windows Client TCO by Platform Hosted by $8, 000 6, 000 Downtime End-User Ops. 4, 000 Admin. 2, 000 IT Ops HW/SW Unmanaged Desktop Typical Managed Desktop Win 2000 NTW 4 Win 98 Win 95 0 Highly Managed Desktop Copyright © 2001

Mobile Computer TCO by Platform Hosted by $14, 000 12, 000 Downtime 10, 000 End. User Ops 8, 000 6, 000 Admin. 4, 000 Ops 2, 000 HW/SW 0 Win 95 Win 98 NTW 4 Day Extender Win 2000 Win 95 Win 98 NTW 4 Road Warrior Win 2000 Copyright © 2001

Migrating to Windows 2000 and AD l TCO Considerations: • System replacements and replacement labor • System upgrades and upgrade labor • • Software Licensing • Migration related User Downtime IT and User Training Migration Labor Migration related Help Desk Calls Hosted by l Est. at $1, 000 per desktop l PC Lifecycle • 36 month desktop • 24 month mobile l Upgrade vs. Replace • $45 per admin hour l 3 rd party tools

Hosted by Pre-Migration Planning l TCO Considerations • Asset analysis for replacement / system upgrade • • • Develop Business Case • • • Security Impact (ACL) IT Training Identify obsolete users Identify expired Computer Accounts Identify trust relationship Identify Administrator Privileged Users Detecting Naming Conflicts NT Service Account Identification l 20% of total migration costs l Administration and Support Labor l 3 rd party tools required

Migration l TCO Considerations • Windows Migration § § § § § • System Replacement and Upgrades OS and System Distribution Migrate User Accounts and Rights Migrate Computer Accounts and Rights Rename Machines Directory Updates Updating Access Permissions to File / Print Services Maintenance of Access to Exchange Preserving End User Desktop and Applications (Profile) Preserving System Registry Access SID History Cleanup User Training § § § Exchange Migration § Account creation and deletion § User properties § Distribution groups and lists § Mail forwarding / delivery restrictions § User Training Hosted by l 80% of Migration Costs l Systems and Software Costs l IT Ops and Admin Labor Costs l User Training l Downtime Impact • User Productivity Loss (salary) • Business Loss (profit)

Change Management l TCO Considerations • Software distribution § § • Remote Installation Services Windows Installer Services SMS System Restore Directory and Resource Security and Administration § Create/Delete/Add / Remove a Group or User § Permissions Management § Role Based Delegation § Changing Directory Security § Reset Passwords § Change User and Personal Information § Manage Print Queue § User Auditing and Reporting Hosted by l IT Operations and Administration Labor l Support Calls l Downtime

Change Management l TCO Considerations • File Security Administration § § § Change File Security Service Account Maintenance Visualizing Permissions Searching Replacing Permissions Security Auditing and Reporting • Group Policy Administration § Resultant set of Policies § Analysis and Documentation § Backup and Restore / Versioning • Physical MACs § Imaging § Shipping § Staging § Standardization Hosted by l IT Operations and Administration Labor l Support Calls l Downtime

Operational Management l TCO Considerations • Availability Management § Microsoft Operations Manager (proactive system monitoring and event management) § Microsoft Application Center § Advanced Enterprise Server clustering/failover § System Restore Hierarchical Storage Management (HSM) • Security Management § Encryption, PKI, Kerberos § Anti-virus (requires systems > 300 MHz for background antivirus protection) Hosted by l Respond and Resolve Labor l Support Calls l Downtime

Asset Management Hosted by l TCO Considerations • Maintaining Standards § Image management § Systems standardization § Group policy management § Systems Management Server (SMS) • Centralized Procurement § Standardization l Systems Purchasing l Software Licensing l IT Ops & Admin Labor

Hosted by Customer Services l TCO Considerations • Centralized support • Standardization • Remote diagnostics and control • Password management • Self-service • User Training l Support Calls l User Downtime Low Medium High Typical Help Desk Costs per Call $15 $18 $25 Typical Call Volume (Average number of calls per user per month) 1. 2 2. 0 2. 5

Business Value - Productivity l Mobility • Additional 6 -8 productive hours per week • At Meetings, Road, Home • Migration from desktops to mobile computers • • Wireless Higher TCO by 25 to 50% l Business Agility • New applications • New business opportunities • Important in uncertain times Hosted by

Hosted by Alternative 1: PC as a Utility Managed Services Benefits • Re-allocate IT Operations and Administration Staff • Improve Service Levels • Increase Availability • Migrate to Latest Platform and Best Practices • No large up-front investment required

Hosted by Alternative 2: Linux Lower TCO? • Lower Software Licensing Costs • Slightly Higher IT Ops & Admin Costs • Better Availability • Slightly Less Agility

Hosted by Conclusions l Potential 26% savings with a well managed Windows environment - $1, 845 per PC / year l Requires Active Directory and Policy Management l Migration costs average $1, 000 per PC l Implementing best practices can cost an additional $500 -$1, 500 per PC l Typical payback in 12 -18 months from deployment l Other alternatives, such as Managed Services deserve serious consideration

Thank You! Hosted by Thomas Pisello tpisello@alinean. com www. alinean. com • Additional ROI research • Free on-line peer comparison tool • Sample reports and ROI/TCO benchmarking and analysis software