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SmartAdvice: Measuring Business Value Of IT Investments

It's hard to quantify the return on IT investments, but it's in IT's best interests to help in the documentation effort, The Advisory Council says. Also, control VPN access from home computers to improve security, and look at what you want from your system before deciding whether to delay server upgrades.
Question C: Our servers are more than five years old. Management wants to defer investment in new servers as long as possible. How long can we delay server upgrades before it will hurt our business?

Our advice: You aren't alone. Many companies in recent years have been saving money by extending the time between hardware upgrades for both servers and desktop systems. As the cost of servers continues to plummet (a decent rack-mounted server can be had for under $5,000), and computing power continues to rise, the question of when to upgrade becomes trickier. The answer, as always, depends on your industry, hardware, and specific application software requirements.

You Can Delay Upgrades If
You can hold off another year or so if:

  • Your applications are still reasonably responsive, supported, and users aren't complaining;

  • You have no need to upgrade your operating system. Hardware that easily supported Windows NT will bog down with Windows Server 2003;

  • The hardware was originally configured with lots of memory and disk space. Over-configured hardware can easily translate into an extra year of service, more than making up for the higher original investment;

  • The hardware is relatively standard. Since five-year-old peripherals are nearing end of life, you will more than likely need to replace them soon; and

  • You have no compelling reason to add new hardware--try finding a Windows NT driver for that new USB printer!

You Should Replace If
Reasons to replace your servers include:

  • A mission-critical application requires an upgrade. Your hardware may not be able to handle the resource demands of the new software, or the software may require an operating system version that your old hardware simply won't support. New Microsoft Windows versions are notorious for their ever-growing need for disk, memory and CPU speed;

  • If you have time to get a cup of coffee while waiting for an application, then it's time to upgrade. The cost of the hardware will be quickly repaid by increased staff productivity;

  • Your hardware becomes completely unsupportable. While IDE disks are still readily available, many hardware vendors no longer carry other critical replacement parts. You might be forced to upgrade unexpectedly, and urgently, if a video card or CPU goes.

In conclusion, determine your requirements for up-time and tolerance for risk. If you configured your server environment appropriately five years ago, and you have no pressing need to upgrade your operating system or applications, then you can probably use your systems for another year or two. If your mission-critical application requires a major upgrade, then plan on buying a replacement system soon.

-- Beth Cohen

Ian Hayes, TAC Thought Leader, has extensive experience in improving the business returns generated by IT investments. He is the author of three IT books and hundreds of articles and is a popular speaker at conferences. He helps companies focus on value-creating projects and services by better-targeting IT investments, improving the effectiveness of IT execution, optimizing the sourcing of IT activities, and establishing measurement programs that tie IT performance to business value delivered.

Peter Schay, TAC executive VP and chief operating officer, has 30 years of experience as a senior IT executive in both IT vendor and research industries. He was most recently VP and chief technology officer of SiteShell Corp. Previously at Gartner, he was group VP of global research infrastructure and support, and launched coverage of client/server computing in the early 1990s.

Beth Cohen, TAC Thought Leader, has more than 20 years of experience building strong IT delivery organizations from both user and vendor perspectives. Having worked as a technologist for BBN, the company that literally invented the Internet, she not only knows where technology is today but where it's heading in the future.