Total Cost of Ownership of BPPM - Part 1: Introduction

The total cost of ownership of BPPM includes the cost of hardware, software license, implementation, day-to-day operations and maintenance.  The total cost of ownership must be kept in mind starting in the planning phase and through the entire implementation phase as well as the operations phase.  But most importantly, how BPPM is implemented makes a huge difference not just on your implementation cost but also your operations cost year after year.

Implementing BPPM is like building a house. Not only you care how fast the house can be built, you also care if the house has enough features and options to fit your needs.  And more importantly you care how much it will cost you for maintenance, repair, and utilities year after year.

Several years ago when I bought my first newly-built house, I knew very little about total cost of ownership.  Because the house was poorly insulated during the construction, I have been getting costly air conditioning bill every summer.  Had I known what I know now, I would have been more selective when I picked up a builder.

Similarly, if you are responsible for your enterprise system monitoring, you may want constantly ask these questions during implementation: How many people do I need for operations? How much can be automated and how much must be manual work?  What customization do I need?  Can this customization be easily extended in the future?  Are different components in the implementation consistent enough so the knowledge can be transferred easily?  Can most of the operation procedures be created and understood before implementation is complete?

If you hire consultants for BPPM implementation, you need to work closely with the consultants to make sure the total cost of ownership is part of the objectives of the implementation.  Don't assume that a consultant will automatically keep the total cost of ownership in mind since it may require more work during implementation. The difference between a good consultant and a mediocre consultant is not just how fast the implementation can be done, but how the implementation meets your needs and most importantly how much it can save you in operations.

What should be a good size for your operations team?  As an example, one of my clients with 7 monitoring solutions (BMC and other vendors) needs only a 3-person team for the last 5 years to keep mission-critical multi-hospital operations running without experiencing any down time.  And no one needs to work overtime.  I have seen many similar-sized IT operations need 6-10 people in the team just to keep up with operations support.  If you can cut down just one operations staff in the team with a right implementation, that is a minimum $100K saving year after year.

In the next few posts, we will go through some best practices on how to reduce the total cost of ownership.