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Sample ROI comparision using Strategic IT - Network Hubs

The table below represents an example of a few small-scale decisions made over a few years involving just one IT area (networks) and one component(hubs).

Although many important issues are ignored in the example (such as timing of costs), it illustrates how having an IT strategy can result in lower long-term costs, greater capability, faster time to benefit, and less risk.

Time Event Tactical Solution Strategic Solution
Organizations's IT Strategy None Migrate to emerging 100BaseT (fast ethernet) within three years.
1998 Office with 10 people is networked with 10BaseT ethernet 16-port, 10BaseT hub @ $500 16-port, 10/100BaseT hub @ $700
1999 1 server added with 100BaseT interface 2 port, 10/100 base T hub @ $200 no purchase required
2000 5 users added with 10BaseT or 100baseT capability no purchase required (10BaseT) no purchase required (100BaseT)
2001 1 more server & 5 more users; all users converted to fast ethernet (100BaseT) 24 port, 100BaseT hub @ $300 (10BaseT equipment removed) 16-port, 100BaseT hub @ $200 (augmenting original hub)
Final Requirements (same for both)    20 Users; 2 Servers; 100BaseT 20 Users; 2 Servers; 100BaseT
Total Costs    $1000 $900
Total Benefit    24-ports @ 100 baseT 32-ports @ 100 baseT
Time    Most users stuck on 10BaseT for 4 years Most users on 100BaseT, and sooner
Total Risk    Single Point of Failure and only 2 spare ports. No 10BaseT capability installed. significant redundancy and 10 spare ports, 5 of which can support 10BaseT.

This simple example, involved only $1,000 over several years; but in it, Strategic IT saved 10% total costs and resulted in a much better position and return for the organization.

Extend the Strategic Savings - If you invest 5% of your IT budget in Strategic IT, you could save 10% of long-term costs of ownership. In the long run, you could save 10% of the IT budget, for a 100% return on dollars spent on developing sound IT strategies.

In addition to long term costs savings, Strategic IT creates opportunities for:

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