How to Calculate ROI for Network Management & Monitoring

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IT staffs are being asked to do more with less, as well as show a tangible ROI for investments made on IT, by rightsizing their NMS solution. Let us help you with this easy to follow ROI model.

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How to Calculate ROI for Network Management & Monitoring

  1. 1. Calculating ROI for Network Management and Monitoring © 2013, SolarWinds Worldwide, LLC. All rights reserved. 1
  2. 2. Agenda • Benefits of an NMS • ROI – Why is it important? • How to Calculate ROI? • Understand your NMS Costs! • How to Calculate Cost Savings? • ROI for SolarWinds NPM • EMA® Case Studies on Rightsizing NMS © 2013, SolarWinds Worldwide, LLC. All rights reserved. 2 Improve ROI with SolarWinds NPM
  3. 3. NMS Benefits Network management and monitoring benefits are typically realized across a number of areas that can be segmented into the following: • • • • • Salary/Staff Time Savings Reduced Network Downtime Reduction in Support Calls Decreased Time-To-Resolution Managing Service Level Agreements © 2013, SolarWinds Worldwide, LLC. All rights reserved. 3
  4. 4. Network Management ROI – Why is it important? In IT infrastructure, the “network,” and its various components, has become a competitive differentiator for businesses of all sizes. IT staffs are being asked to do more with less, as well as show a tangible ROI for investments made on IT, by rightsizing their NMS solution. Why it’s important to calculate ROI Companies implementing network management and monitoring software are experiencing strong ROI, improved data analysis and reporting, and reduced network downtime. © 2013, SolarWinds Worldwide, LLC. All rights reserved. 4
  5. 5. Calculating ROI » But in reality, you will use the more comprehensive Net Present Value (NPV)[1] and Internal Rate of Return (IRR )[2] measurements to compare the investment in your NMS against alternative investments that your business can make. [1] & [2] Click here for detailed information on NPV and IRR © 2013, SolarWinds Worldwide, LLC. All rights reserved. 5
  6. 6. Understanding Your NMS Costs Before rightsizing your Network Performance Solution, understand your costs! What costs do I incur? The cost of network monitoring and management is comprised of a number of different elements that combine to provide a total cost of ownership (TCO). • License Cost • Product Maintenance, Support, and Upgrades • Dedicated Hardware or Software • Installation/Implementation/Consulting • Training • Solution Management © 2013, SolarWinds Worldwide, LLC. All rights reserved. 6
  7. 7. Calculating Your Cost Savings Calculating your cost savings or benefits can typically be categorized as follows: 1. Cost Savings in Employee Productivity 2. Cost Savings in Lost Revenue 3. Cost Savings in IT Productivity © 2013, SolarWinds Worldwide, LLC. All rights reserved. 7
  8. 8. Calculating your Cost Savings (cont…) » [1] [2] [3] [1], [2] & [3] Click here for detailed calculations about cost savings © 2013, SolarWinds Worldwide, LLC. All rights reserved. 8
  9. 9. Your questions answered! FAQs for finding the right network performance monitoring solution • How do I achieve balanced objectives of feature/function capabilities matched with cost effectiveness? • How do I find a solution that keeps pace with changes in the managed environment and the organizations they serve? • Should I select an enterprise class network or systems monitoring platform solution with all the bells and whistles? Or will this choice be overly complex for my needs? © 2013, SolarWinds Worldwide, LLC. All rights reserved. 9
  10. 10. SolarWinds Network Performance Monitor (NPM) Ensures Improved ROI © 2013, SolarWinds Worldwide, LLC. All rights reserved. 10
  11. 11. What is SolarWinds NPM? SolarWinds Network Performance Monitor (NPM) is an easy-touse network monitoring software that offers: Unified Fault, Availability and Performance Monitoring • • • NPM can quickly detect, diagnose, and resolve network performance problems and outages. NPM tracks response time, availability and uptime of routers, switches and other SNMP enabled devices. Shows performance statistics and includes out-of-the-box dashboards, alerts, and reports. © 2013, SolarWinds Worldwide, LLC. All rights reserved. 11
  12. 12. Calculating the ROI for SolarWinds NPM Take a look at a hypothetical business with the following characteristics. • • • • • • • • A network infrastructure with approximately 1000 interfaces, 300 nodes, and 130 volumes. 3 IT employees focused on network management 100% of their time with an average annual loaded cost of $120K. An average monthly downtime of 60 minutes. Approximately 440 employees with an average annual loaded cost of $100K. 10% of employees affected by system downtime at any given time with a 10% impact of the outage on those affected employees. Approximately $305M in annual revenue over 2,080 working hours with a 10% impact of network downtime on annual revenue. Estimated reduction in network downtime of 10% by deploying SolarWinds NPM 17% Weighted Average Cost of Capital, 35% effective tax rate, and a 3-year depreciation for software. Now, let’s calculate the NPV and ROI for SolarWinds NPM © 2013, SolarWinds Worldwide, LLC. All rights reserved. 12
  13. 13. Calculating the ROI for SolarWinds NPM (contd.) USD Start Up SL2000 (up to 2000 elements) + Additional Polling Engine x 0 – License and 1st Year Maintenance $14,975 Year 2 Year 3 $2,995 Annual Maintenance Year 1 $2,995 $2,995 Total Annual Cost $14,975 $2,995 $2,995 $2,995 Annual Cost Savings (Includes 3 Year depreciation@35% tax rate $0 $55,014 $55,014 $55,014 Discounted (17% WACC) Net Cost Savings {$14,975} $44,461 $38,001 $32,479 Discounted (17% WACC) Cumulative Cost Savings {$14,975} $29,486 $67,486 $99,865 ROI Measures Discounted (17% WACC) Cumulative 3 Year Net Cost Savings $99,965 Net Present Value (17% WACC) $71,064 Internal Rate of Return (Based on discounted Benefit Flow) 267.59% Payback (in Years) © 2013, SolarWinds Worldwide, LLC. All rights reserved. 13 0.29
  14. 14. Cost Benefit Analysis for SolarWinds NPM © 2013, SolarWinds Worldwide, LLC. All rights reserved. 14
  15. 15. See How SolarWinds NPM Increased the ROI for Customers © 2013, SolarWinds Worldwide, LLC. All rights reserved. 15
  16. 16. Rightsizing your Network Management Solution "Features and capabilities aside, the best way to understand both product fit and Total Cost of Ownership (TCO) advantages of replacing an existing network performance management solution with SolarWinds NPM is to learn from the experiences of those who have made the switch." - Enterprise Management Associates © 2013, SolarWinds Worldwide, LLC. All rights reserved. 16
  17. 17. SolarWinds ROI Case Studies by EMA® New Whitepaper by EMA® with 4 Case Studies on how SolarWinds NPM has been selected by organizations to rebalance capabilities, cost effectiveness, and ROI for network performance management and beyond. Cloud Service Financial Provider Institution SolarWinds NPM Healthcare International Organization Airline © 2013, SolarWinds Worldwide, LLC. All rights reserved. 17
  18. 18. What did our Customers say? “By deploying SolarWinds NPM and related products, this provider found their management tools’ TCO was greatly reduced from both a licensing and maintenance point of view.” “Substantial improvements in TCO while using SolarWinds because they have reduced training costs, extended usage to a broader audience, and have been able to achieve integration and customization, allowing the organization to eliminate the need for costly professional services.” – Cloud Service Provider – Financial Institution © 2013, SolarWinds Worldwide, LLC. All rights reserved. 18
  19. 19. What did our Customers Say? (cont…) “The licensing cost for the SolarWinds products, including annual maintenance contract, is only 10 percent of what the organization was previously spending for its management tools – all while delivering much greater functionality and visibility.” “SolarWinds has allowed us to achieve significant license and maintenance cost savings over prior products. They have customized SolarWinds products to meet specific needs, speaking to the less tangible, but no less important benefits of flexibility and extensibility.” – Healthcare Organization – International Airline © 2013, SolarWinds Worldwide, LLC. All rights reserved. 19
  20. 20. Industry Study on Network Management ROI Learn how your organization can achieve compelling TCO benefits with SolarWinds network management solutions. Download the white paper to get started! EMA White Paper Rightsizing Your Network Performance Management Solution: 4 Case Studies See how four organizations made the switch to SolarWinds and are now realizing the benefit of lower total cost of ownership. © 2013, SolarWinds Worldwide, LLC. All rights reserved. 20
  21. 21. NPM Improves Your ROI with Cost & Time Savings Instead of building a complicated spreadsheet to calculate your ROI, check out our ROI Calculator! Click HERE to Calculate the ROI for your Organization >> and see just how financially beneficial NPM can be in your environment. © 2013, SolarWinds Worldwide, LLC. All rights reserved. 21
  22. 22. NPM – Awards & Accolades Awards See What Our Happy Customers Are Saying….. © 2013, SolarWinds Worldwide, LLC. All rights reserved. 22
  23. 23. Thank You! © 2013, SolarWinds Worldwide, LLC. All rights reserved. 23

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