Managing Your Cash Flow

Published

Are you crippling your IT network?

8 Mins

Most non-technical managers and finance directors could be forgiven for paying little attention to their hidden, unseen network infrastructure; particularly as it appears to be working.

Knowing how it all works is strictly on a need-to-know basis and most FDs believe they don’t need to! This is a totally defensible position, but only as long as heads are not buried in the sand.

There was a time when it was only some sectors, for example financial services, that needed, or could justify, investment in high performance cabling for their business-critical high value client-focused transactional network. This is no longer the case as many businesses of all sizes are reaping the benefits of the IT revolution.

The right network infrastructure must be able to deal with the needs of today’s business, tomorrow’s unknown requirements, peaks and troughs of a modern economy and demographics. Not too mention the ever present statutory and commercial needs for security, prevention of data leakage and data management. All these aspects of the cabling that you don’t see will determine if your new VoIP system works or, even worse, is responsible for crippling your network totally.  Counting beansMany FDs will have been faced with the daunting challenge of receiving a highly technical proposal from the IT manager and feeling entirely incapable of making an informed decision. This is in contrast to being faced with a clear cost-based, revenue-creating proposal from a business manager for an easy-to-understand application (like a faster router, bigger server or IP based video conferencing). If the latest capital expenditure brings down the network, it might not just be the IT manager who is looking down the barrel of the CEO’s gun. Most IT equipment is expensed over just a few years but the well-designed network should deliver for at least ten. To compound this imbalance in approach, a typical organisation will spend a substantially higher proportion of its IT budget on equipment and a disproportionately small amount on cabling. Failure to deal with this submersed part of the iceberg could prove catastrophic. It is a bit like being persuaded by your local tyre and exhaust supplier to fit the highest performance tyres to a clapped out Mondeo; the car will fail before the tyres. Received wisdomSome commentators speak of the network cabling as the foundation. But the network cabling needs to be considered carefully at every point of change as one simple change in use (for example adding IP telephony) could change the shape of network traffic and utilisation, damage business by causing the new deployment to fail, and be completely rejected by users. Investment driven network cablingIn 2006, IDC reported that $1.16trn had been invested globally in IT, which was estimated to be less than four per cent of revenue. Of this investment sum, only 0.4 per cent was spent on network cabling.  Further analysis by Information Week suggests that of total IT expenditure, 17 percent is spent on hardware and of this, less than 3 percent on cabling. But most organisations expect to receive ten or more years of reliable service. It appears questionable practice to spend the least on the infrastructure foundation that you expect to last the longest of all IT elements. What is required is a change in mindset at all levels. Like the FD, the IT and business managers are all stakeholders, each with a specific interest and area of responsibility. The consideration of investment return, technical merits and business needs alone will not cut the mustard and these critical elements must be complemented by a known expert and involve the FD. Hidden assetsIn the past, a lot of IT was seen as a fad and not business enabling. A modern IP network is a new business asset and should be treated as such. There is much to be said for making the cabling last as long as possible and the numbers support this. It is estimated that installing a cabling system that will last for 15 years could save around 30 per cent in terms of the total cost of ownership. But beware: this is not the same as buying a system today and just sweating it as an asset. It is essential to have a detailed understanding of your needs when specifying the correct solution. It must be able to grow and flex with the needs of the business and the market. The cost of getting it wrongCutting corners on cabling could paralyse your network and, in turn, your business. A common example concerns the purchase of the patch cords normally used to connect equipment on a desk to a network outlet. There are big savings to be made but because problems all too often manifest as serial, intermittent failures, the resulting and expensive downtime can be very hard to track, understand and resolve.  Making the right commitmentNetwork cabling will only last a long time if approach in an informed, multi-disciplinary way that has both the needs of the business and the future possibilities firmly in mind. This scalability should not translate into spending now for the future, though. While your business may not need the higher network speeds offered by 10Gb/s today, buying a system that can comfortably run at 1Gb/s, but can be updated to 10Gb/s when needed, would be a sound choice.

The cabling should also support up to three generations of active network architecture during its lifetime. Bandwidth will increase substantially over time so it needs to be something you can introduce as needed.  If your business is one that is in any way reliant on information and communications technology, and as a holder of the financial purse strings, it is your responsibility to make sure that the underlying fabric of your network infrastructure is fit for purpose today and well into the future. *Steven Foster is the managing director of Siemon EMEA

Share this story

Young entrepreneur starts 3rd business
Finding staff for a growing business
Send this to a friend