Making the ITAM Business Case
Calculating the costs of adopting IT Asset Management
In order to obtain the most complete and accurate understanding of the potential return on investment for ITAM, project leaders must fully consider all the costs involved in the ITAM initiative from start to finish. They must account for:
- Application tool. The money spent on the application itself, whether in the form of subscription or software license fees. If applicable, costs for all needed hardware and any additional software required (e.g., operating system) must also be considered.
- Integration and deployment. The expenses involved in installing, setting up, and rolling out the solution, including end-user training.
- Ongoing administration. The cost of maintaining the solution and its supporting components, including monitoring, troubleshooting, and upgrades.
Presenting the Data
With all the numbers and calculations outlined above, the benefits and ROI of ITAM may be difficult for busy executives to interpret. Therefore, it is critical to present these findings in the most clear and concise manner. Charts and spreadsheets work best, because information can be categorized and detailed logically, while formulas allow for simple number manipulation.
The Business Case
The sample chart below displays all costs and savings highlighted in this paper. The previously mentioned industry standard numbers have used in these formulas.
Investment |
Formula |
Annual Costs |
$20 (Annual fee per PC) X 500 PCs |
$10,000 |
|
|
Total Investment |
$10,000 |
|
|
|
Return |
Formula |
Annual Savings |
Total Cost of Ownership |
|
|
Reduced Help Desk Support |
500 PCs X 4 (Support tickets per PC each year) X $40 (Cost per ticket) X 20% (Reduction in average call length) |
$16,000 |
Greater IT Audit Efficiency |
500 PCs X 0.25 (Hours it takes to audit each PC) X $33 (Hourly pay rate for IT staff) X 2 (# of annual audits) |
$8,250 |
IT Governance |
|
|
Improved Employee Productivity |
500 employees X 10% (Employees that encounter productivity loss) X 156 (# of hours per year spent using unauthorized software) X $18 (Average hourly pay rate) |
$140,400 |
Compliance |
|
|
Potential Fines |
15% (Probability of audit) X 500 PCs X 5% (PCs with at least 1 unlicensed app) X $30,000 (Fine per unlicensed app) |
$112,500 |
|
Total Annual Savings |
$277,150 |
|
|
|
Total Annual ROI |
Savings ($277,150) / Costs ($10,000) |
2771% |
Conclusion
IT Asset Management solutions can offer ROI that is significant and measurable. By outlining the potential savings that these powerful applications can provide in a clear and concise manner, project leaders can present a persuasive and compelling business case and obtain the high-level sponsorship needed to ensure the success of their ITAM initiative.
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