Better Decision Making by Understanding IT Spend - Danny Bramman - Head of Corporate Services - ULCC

1. Better Decision Making by Understanding
IT Spend

2. ULCC Costing Information – The Why
• Established 1968 as a ‘Super Computer’
Centre for HE one of three in the UK
• Continually re-invented ourselves over the
next 40 years
• In 2005 we had 2 large contracts and had
started looking after UoL IT needs
• And then………………

3. ULCC why we started to dig 2
• 40% of our revenue was insourced back to
JANET
• So were some of our costs (TUPE)
• Lack of useful data
• No up to date financial information
• No basis to make effective decisions
• At the time UoL had an old finance system

4. The Challenges
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No useful financial information
No understanding of ‘Cost’ and ‘Price’
No timecard information
Costs allocated to whatever department
could afford it
• Functional Silos – poor communication
• We needed good information

5. How
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‘Sell’ the need for change
Collect data
Model activities with technical staff
Model the costs of each activity
Test the models
Continuously improve the models
Use DCF techniques for investment
appraisal

6. Key elements of the cost models
• Staff Costs
• Equipment costs
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• Space Costs
• Data Centre Costs
• Power Costs
• Overheads
• The cost of money
• VAT impact

7. The Finance Link
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Comprehensive coding system
Appropriate granularity
Careful coding of items (PO, Invoices)
Not too much off-system work
Monthly Accounts
Regular review with finance

8. Staff Costs – how and what do you recover
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Salary, Employers N I & Pension Costs
Training
Overheads (at ULCC c£150 per day)
Days available for recovery
Don’t forget
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9. Labour Costs
Staff Costs (average for implementation/support
staff)
48,688
244
Departmental Overheads
10,123
51
Equipment Costs
2,372
12
Space Costs
2,222
12
Central Overheads
18,309
92
Total
81,714
411

10. Data Centre Costing
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Space Costs
Power Costs (know your PUE)
Standby generator?
Equipment Costs
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11. Cost of a rack in the DC
Annual Cost of 6 amp 42U rack
Space Costs
1,573 based on 3.4 m2 per rack
Power inc Cooling
1,951 based on 6 amps @ PUE of 1.9
Rack Depreciation
158 7 year life
Power Management Depreciation
130 5 year life
Power Management Maintenance
98 annual mtce costs
Standby Generator Costs
372 Incl deprec mtce & running costs
Data Centre Management staff
244 allocated per rack
Data Centre Management overheads
167 allocated per rack
Total Cost/Price
4,693 to recover each year

12. Service Costing things to remember
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SAN capitalisation over life time of
product (be careful when adding
further components)
Hardware & software maintenance
Additional kite (SAN switches)
Calculations based on usable storage
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Electricity (SAN and ancillary DC kit)
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Average utilisation of storage
(include wasted storage)
Data Centre Floor space to house
equipment (UPS, Generator, Pumps,
Chillers, BMS etc)
Cost of money
Testing /Auditing (e.g. Data Centre
black building test and time spent
with auditors)
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Data Centre Management
Your man time to support the kit
Overheads (typically our overheads
are £150 per person per day)
Supplier installation and move costs
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Supplier price increases
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Contingency (New/High Risk)

13. Starting on your journey
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Everyone is a customer
Sell the process internally
Time recording is essential
Know your data centre costs & performance
Appropriate granularity
Work with finance
Continuous improvement of models
Don’t be afraid to fail (at first)