Businesses push to control ongoing costs of technology
Atlanta Business Chronicle - by Jennifer Paire Contributing Writer
Simply owning and operating computer systems is enough to make most business accountants tear their hair out.
But moving them? As Wolf Camera Inc. has planned and executed the move of its corporate headquarters and distribution facility to north Atlanta, the company looked for cost-effective ways to relocate and upgrade its computer network.
Such costs are known as the total cost of ownership (TCO), and are increasingly important to businesses embracing technology in order for them to become more competitive.
They are a litany of expenses associated with using and managing computer networks; including everything from initial purchase to tech support, network management, software upgrades, the addition of new systems, and, most important, keeping the systems running.
Consider these figures: The Meta Group Inc. of Stamford, Conn., a market research firm focused on the information technology industry, performed a study in 1996 that showed for every dollar spent on information technology, 30 cents is a nonvalue producing expense. Year 2000 projects are expected to push this total to 55 cents in 1998.
"I think more people are trying to get it under control," said Phill Schiller, district client services manager for Inacom Corp., a technology management services company. Schiller manages systems engineering, project deployment and business development for clients in Atlanta and Birmingham.
"The biggest thing with networks is once you have it everybody takes advantage of it," Schiller said. "It all starts out very innocent and minimally, but it grows as people see the advantage of it."
In Wolf's case, the company has moved to its larger facility to keep pace with growing inventory and shipping demands. Naturally, the company needs a computer network that responds to this growth.
In the past, Wolf used 286 PCs in its distribution operations, but has chosen to use network computers (NCs) from IBM in its new facility to supply access to a merchandise management program.
For consumers, NCs represent a way to have Internet access without buying a full-blown PC. NCs have been heralded as a cost-effective tool for business because much of the software they need may be downloaded and updated on the network.
Pleased with IBM Network Station's introduction and performance in the distribution center, the company is finding uses for it throughout the network.
"We decided from a cost and configuration standpoint it was the only or the best way to supply information to the distribution center," said Stan Simpson, systems administrator for Wolf, whose networks also support 150 desktop PCs.
"From a cost standpoint, a network computer doesn't cost much less than a Pentium PC, but you get a built-in network interface card, and there is no hard disk or fan to go bad. So the total cost of ownership is important as a one-piece unit," Simpson said.
Proactive management can save
While companies like Wolf may be introducing NCs, the PCs in offices throughout Atlanta still represent an important investment.
A recent Meta Group study found that proactively managing existing PC networks can lead to a 12 percent savings per desktop. This may be achieved by strictly managing access to client software and by using procedures such as automated inventory, software distribution and remote control diagnostic tools.
From his own experience, Schiller pointed to several effective management methods:
• The use of the Internet in business has prompted the creation of new computer programs that track Internet traffic on the local network, and bill company departments for it.
• Restricting certain kinds of traffic on the network can guarantee that bandwidth is available at crucial times.
• Special programming that used to be reserved for information technology professionals now can be done by department managers, thanks to new software programs. This frees tech professionals to focus on bigger network issues.
Schiller said he hasn't been involved in a project that required the use of network computers."People are sticking their toe in the water," he said. "Aren't we taking a step back with that? Everyone just suffered the agony of getting away from [mainframes and terminals]. I don't see it picking up very rapidly in the marketplace."
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