6 Ways to Calculate Returns from your Network Monitoring Investment

The problem 

Most organizations are afraid of downtime, and for good reason. Public incidents like Telstra's five outages in six months keep the fear of downtime alive in our hearts and minds. When we constantly see headlines shaming high-profile companies for their technology failures, justifying the cost of network monitoring solutions might seem easy. Anything that keeps operations up and running seems valuable—right?

The problem is that some organizations don't crumble under a few minutes or hours of downtime. Outages are expected, even tolerated. It may take IT some time, but they get fixed eventually. So what additional value can network monitoring software provide to make it worth the investment? If IT budgets are limited and teams are already overwhelmed with projects, decision-makers may not see the value in spending money on another tool they'll have to manage.

Overcoming objections and proving ROI 

The way you calculate ROI for your organization will depend on the role your network plays in day-to-day operations. If you're a tech-driven school district, students, teachers, and administrators may rely heavily on network uptime for the success of their classroom initiatives. Online retailers will depend on the availability of their network for revenue generation. Financial institutions will tie uptime to their ability to get trades done or provide customers with online banking services.

If uptime isn't crucial to your day-to-day operations, reducing the costs of network maintenance and support over time may be more important to your organization's bottom line. Or perhaps reducing frequent outages to increase end-user productivity is important to you. 

Calculating ROI from a potential network monitoring investment starts with understanding what problems it will solve. Those benefits might come as pleasant surprises—like a network manager finding he's reduced the time required to resolve network problems (as he expected), but also realizing he's avoided having to hiring new staff, plus increasing network uptime. 

Network monitoring returns usually come from a combination of areas. Running a network requires trained technicians who need to maintain and upgrade equipment, configure new users, answer support calls, and plan network expansions and changes. Technology that helps maintain or even reduce headcount offers quick, definitive returns. And in many cases, network monitoring solutions free network professionals to work on more strategic projects that drive top line growth.

Let's look at six possible areas in which network monitoring can deliver ROI: 

1. Salary/staff time savings 
2. Minimizing or avoiding outages
3. Reducing support calls
4. Reducing time to fix
5. Guaranteeing and Managing SLAs
6. Reducing downtime

Salary savings are fairly easy to notice and calculate. For example, if monitoring technology allows night shift staff to be reduced (or even lets you run “lights out”), the savings would simply be the freed-up salaries or minimized overtime costs. If the technology allowed a staff resource to spend time on an e-commerce project that realized $100,000 in its first month of operations, that amount should be factored into the return on investment.

Network monitoring solutions alert IT to potential problems before they escalate to something worse. Network utilization rates, error percentages, transmit/receive statistics (e.g. packets per second or bytes per second), round trip times, or percentage availability that vary from documented trends can all signal upcoming trouble.

Creating alerts based on performance thresholds keeps you aware of any red flags. That way, you're able to take corrective action before the network slows or servers go down. Proactive monitoring helps stem the tide of support calls and eliminate the need for network-wide apologies. 

Best of all, keeping the network up and running helps you avoid outages, allowing the whole organization to be more productive.

Related Content: Where Do I Start? Detecting IT Issues with Network Monitoring 

Communicating with end users in order to keep them online and productive is a critical network management role. Network technicians staff hotlines, email inquiry, or problem report systems. Obviously, when end users call in problems, the entire network team becomes focused on problem fixes. In the worst cases, staff has to be added.

In the best cases, a network monitoring solution alerts you to potential problems, like excessive bandwidth consumption, high error percentages, and other metrics that vary from typical trends. Fixing abnormal conditions before end users are impacted eliminates those calls you'd otherwise receive. 

Support call volume is typically carefully tracked, and costs can be derived by applying per-hour staff salaries to the time it typically takes to close a call. For instance, if a network monitoring solution reduces calls per week to an average of 20 from an average of 50, and it takes, on average, 30 minutes to resolve or close a call, then time savings would be 15 hours. If an average, fully loaded hourly salary rate for network support staff is $30, then the per week savings would be $450, or $22,500 per year.

Once network technicians are notified of a network problem, it can be difficult to locate its source. Are performance issues caused by high bandwidth utilization, or is something going on at the ISPs end? The Chicago office can’t connect. Is the problem on their email server or is a router off-line?

Looking for problem sources can take time, especially if databases that detail network equipment are out-of-date or incomplete. And when a highly distributed network is spread over long distances, fixes can be delayed due to traffic jams or long commutes to the site.

The time it takes to find and fix problems, along with the fuel it takes to drive from place to place, add real, easy-to-quantify costs. Network monitoring applications that provide live diagnostic data and geographic maps that locate devices save hours, if not days, and drastically reduce travel budgets.

Whether operating as an internal unit or providing services to external clients, network operations teams are usually held to service level agreements (SLAs) set at 99.99% uptime. Meet the SLA, and end users or clients are happy. Fail to meet the SLA, and people start asking hard questions. 

In the same way that monitoring technology can prevent an excess of support calls, it can go a long way towards SLA guarantees. Network teams can proactively address potential disruptions by receiving early warnings on:

• Heavier-than-normal traffic conditions
• Unusually high bandwidth consumption
• Under-performing servers

Quantifying ROI based on SLA is easy when networks actually secure business. If an online store is down for an hour, the network team uses the average revenue that would have been gained during that time as a metric. In the case where network operations are generally vital to the organization and SLAs reflect true requirements, consistently met SLAs indicate that network monitoring delivers ROI.

There’s no doubt that network outages or slowdowns reduce employee productivity and commercial activity, but it can be hard to assign a dollar value to downtime. When a company knows how much a website earns per hour, it can quickly determine how much a two-hour outage would cost. But companies that don’t directly generate revenue from their network have a harder time defining the cost of downtime.

Even on productive days, employees spend time on personal email, trips to the break room, or chats with cubicle neighbors. Does network downtime lead to more snacks or chats? How does downtime factor into a measure of employee productivity? If a company that strives to earn $125,000/year/employee misses that mark, can it assume that network downtime was the only cause?

Calculating reasonable and agreed-upon returns on reduced downtime depends on understanding how much unplanned downtime was typical before monitoring technology was put in place and how productive time can be valued. Assumptions about productivity value (e.g. amounts of revenue per hour, data processed per hour, transaction rates, etc.) that are separate from per-employee behavior (e.g. snacking, chatting) can then be applied to increased network availability.

For example, if network monitoring eliminates 12 hours of unplanned, business-hour downtime per month, and five catalog order-takers process $100 in revenue per hour, ROI equals $6,000 per month.

Once you've gotten an idea of how much network monitoring technology will save you, you'll want to compare that number to the cost of investing in network monitoring software.

Software and hardware purchases are the most visible costs, but you'll also want to include other costs to the organization, such as: 

• Initial purchase of solution—the price of network monitoring licenses
• Product upgrades and support—the price of product upgrades, maintenance, and support contracts
• Required hardware or associated software—the price of hardware that will be dedicated to running the network monitoring solution
• Installation/implementation consulting—the cost for any required solution set-up and testing, such as a consulting fee, or overtime required by staff that is already fully subscribed
• Training—training costs should include travel (either by staff to a class or consultants to your facility) and any ongoing instruction that will be needed as staff is added or turned over
• Solution administration/management—salaries for staff dedicated to the solution should be fully applied to overall costs, as do the cost of new hires

The cost of network monitoring will vary depending the vendor. Robust network management systems that include network monitoring as one feature among many are typically much more expensive than standalone monitoring and alerting products. They often require both dedicated hardware and people to run, making them more expensive to maintain over time. 

Any personnel costs related to administration and management need to be considered, whether you have to dedicate a portion of a person's time to managing the solution, or hire someone new. Since most organizations justify the purchase of network monitoring technology by assuming a lower support call volume and limited support staff hiring, adding a six-figure salary to run the technology could undermine the anticipated benefits.

If your network is monitored by a consultant, costs can be fairly easy to derive from contract fees. In addition, your out-of-pocket costs may still include many of the categories listed above: license, support, and hardware pass-through costs along with staff time and administration fees.

Make sure to consider total costs over time. Calculating accumulated network monitoring costs for a year will help you factor in any maintenance fees and administration costs. Knowing how costs play out over time will help you see benefit over time and how it compares to your investment.

One of the top questions people ask related to network monitoring ROI is this: how soon will I see it? That answer will depend on a lot of factors. How fast are you able to get up and running with the software? Are you using all the features that can help you save time and money?

Depending on the software you choose, you could start seeing ROI in five months or five minutes. To ensure faster ROI, look for network monitoring, mapping, and alerting solutions with these key characteristics:

• Quick Implementation: The faster you implement technology, the faster it earns returns. Make sure that installation is easy and does not require command line coding or special hardware.
• Ease of Use: Look for technology that runs without ongoing management. Self-sufficient technology reduces, rather than adds to, headcount.
• Ease of Maintenance: Make sure that configuration options are easy to change as needed and that upgrade processes are straightforward.
• Automation Features: Look for network automation tools that can not only find network issues, but fix them automatically so nobody has to get involved with remediation. 
• Option to Trial: Free trials help you ensure a tool meets your requirements and will do exactly what you need it to. It also gets your team familiar with the tool so you're able to start realizing ROI faster. 

When IT budgets are tight, you need to make technology investments that yield positive returns on investment—as fast as possible. ROI will depend on the solution delivering benefits that exceed its costs. A solution that is easy to implement, use, and maintain will yield the fastest positive returns and continuously save more money than it costs. Find network monitoring software that keeps networks reliably up and running while trimming staffing expenses and downtime costs.

More Resources 

• Answer Your Boss's Questions: Easily communicate why network monitoring is a smart investment to your boss. Read the blog post > 
• Free 30-Day Trial: Try Intermapper and see if it's right for you. Monitor 500 devices free for 30 days. It's easy to install, reliable, and user-friendly. Get my trial > 
• Cost Calculator: Compare the cost of downtime with what you'll pay for Intermapper. Download >