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The Cost of Disruption in Network Projects

Beware of hidden costs and the penalty costs of when projects have to be prematurely rebuilt because you did not think long term

From an upcoming white paper on network infrastructure projects:

Many organizations that are looking at implementing a new network infrastructure for cloud computing; a new building being built; or any other network capability, better look closer at their network designs.

Why? All the cabling needed to build the network should fit the lifespan of the building, not the lifespan of the technology that is hanging off of it. A lot of network architects, network designers and "certified" network engineers seem to be forgetting this fundamental design concept.

They also seem to be forgetting the total costs involved in building a network, maintaining it, modifying it, and upgrading it.

Look at the Total Cost, Not Just the Upfront Costs
Over two decades ago, I discussed the True Total Cost of Networks in several articles as well as a couple of presentations at national conferences.

The formula was TTC = UC + (OC + OIC) + HC

where UC = Upfront Costs

OC = Ongoing Costs (external)

OIC = Ongoing Internal Costs

HC = Hidden Costs

Unless you factor all of these variables together, it does not add up to the True Total Cost (TTC).

Many people must have missed the articles and presentations because few actually look at network projects using the True Total Cost approach.

By implementing their network and then having to go back and re-cable it later because it became prematurely obsolete, they have proven that there is another hidden cost involved in their shortsighted approach when cabling new buildings: The Cost of Disruption.

The Cost of Disruption
There are many who will initially argue this "expanded" cost structure of TTC and say that the customer won't pay for it. To that, I say, "You need to sell the customer on why it is important to take all these costs into consideration and install the network that is going to last longer."

The design costs too much? You don't want to initially pull fiber along with the copper cable and pay for all the labor once, instead of twice? Why not? There is a legitimate cost savings there (just the labor cost alone is significant).

Not good enough? Calculate the "cost of disruption" then. How much does it cost three to five years from now when the new building is all built out and occupied, and now you have to upgrade the wiring throughout the building because you do not have the capacity anymore for all the applications needed to be serviced?

Move out the desks, break open the walls, pull cable from point A to point B, repeat 500 or 1000 times, disrupt whoever is working there and tell them it will only be a few weeks before everything will be upgraded.

Calculate all the demolition and re-building. Calculate the additional drywall needed, the re-painting of the walls and other finish issues. Calculate that lost productivity throughout the workspace.

What if it is a law firm or a medical office? How many hours are lost? It's not just the cost of materials and labor for the job; it's also the cost of disrupting all those people who are supposed to be working in the workspace.

Are you really saving money upfront by not pulling through that extra cable at the time of the initial cabling installation? I know you aren't.

Add to the Cost of Disruption the extra penalty of "Extra Cost to Upgrade" because of the added labor cost. That could be enough for some accounting person to say no to the upgrade because it costs too much. The end result: a prematurely obsolete installation that has far less capacity than what it should have, making the building or venue less viable.

Look beyond the initial project stages. Look at what the longevity of the cabling infrastructure should be. Spending a little more money upfront can guarantee a longer life for the network infrastructure that you want to use. Don't forget the Cost of Disruption when you calculate the cost of the job.

•   •   •

Copyright 2013 - James Carlini

More Stories By James Carlini

James Carlini, MBA, a certified Infrastructure Consultant, keynote speaker and former award-winning Adjunct Professor at Northwestern University, has advised on mission-critical networks. Clients include the Chicago Mercantile Exchange, GLOBEX, and City of Chicago’s 911 Center. An expert witness in civil and federal courts on network infrastructure, he has worked with AT&T, Sprint and others.

Follow daily Carlini-isms at www.twitter.com/JAMESCARLINI

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