Helping Buyers Justify ROI

Concord tool calculates payback for eHealth line

Chief Financial Officers are scrutinizing IT purchases with a fine-toothed comb these days, looking for a real return on investment before they sign off on new software purchases.

With that in mind, Concord Communications Inc. has created a tool designed to show prospective customers how they can justify the purchase of the companys performance and fault management software.

Concord last week took the wraps off its eROI calculator software, which is designed to help new prospects determine and document for upper management the payback they can expect by implementing Concords eHealth series of performance reporting and management software.

The calculation engine in eROI incorporates standards for the cost of server downtime and for how IT people spend their time—whether its chasing down faults in the network; planning for capacity; or managing the performance of networks, servers and applications.

The software asks questions upfront, such as, "Where do you want to save money? Is it on the network, system or application side?" Users indicate how big their infrastructure is, including the LAN, WAN, number of systems and size of their IT work force; then the eROI calculator makes sure these measures are accurate for that company.

After finding out how much IT workers are paid, eROI figures out where eHealth can be deployed so that those workers can use their time most cost-effectively, said officials at Concord, of Marlboro, Mass.

Concord took care to balance eROIs capabilities so that it would be easy to use but comprehensive enough to reflect the IT environment that the eHealth series of performance reporting tools will manage, said Mike Marks, director of product marketing at Concord.

The tool was the decisive factor in one Concord customers business case, which had to go to the board of directors for approval, according to Phil Moran, vice president of network architecture and planning at a West Coast financial institution. Moran put the accuracy of eROI in the "95th percentile."

"This will drive Concords tools into a lot more places," he said. "Im not familiar with any others. I wish other companies would come forward quickly with tools like this."

Others are, in fact, preparing similar ROI calculation tools, and at least one managed service provider, Silverback Technologies Inc., offers an ROI calculation for prospective clients, according to John McConnell, an analyst at McConnell & Associates, in Boulder, Colo.

"Over time, as more vendors get these models and calculations to their customers, there will be more impact on the front-end sales. But now a lot of people will use these tools to justify decisions theyve already made," McConnell said.