Design constraint: Cost
Today I introduce the new blog series “Pillars of the Earth,” or pillars of good network design. Although these pillars are all interrelated, I grouped them in a way that I think allows me to cover them most logically. In this first post of the series, I’ll cover cost.
I’d be naïve if I said that cost is an afterthought of network design. Often times it’s the #1 consideration, if not the only consideration, on projects. But let’s break it down a little.
Return on Investment (ROI)
Companies would only fund projects which are strategic, will incur a return on the investment made in an adequate time, or preferably both. ROI can come as a new revenue source, as cost-saving opportunities, or as increased efficiencies or revenue to an existing product or service. Budgets span to dilute the project investment over the product lifecycle. Understand that money now is better than money later. In other words ROI that takes longer to materialize is not as attractive as a shorter-term ROI, given the potential option to fund other projects which could bring in bigger returns, or bring in returns sooner.
Capital Expenditure (CapEx)
CapEx refers to the upfront costs such as purchasing equipment, inventory, acquiring intellectual property or real estate. A well-thought design provides longer deployment lifespan, investment protection, network consolidation and virtualization, producing non-measurable benefits such as business agility and business transformation and innovation, thus reducing risk and lowering costs in the long run.
Operational Expenditure (OpEx) and Simplicity
OpEx refers to operational expenses such as support, maintenance, labor, bandwidth and utilities. Creating an intricate design may show off your technical knowledge but it can also cause unnecessary complexity making it harder to build, maintain, operate and manage the network. A well- designed network reduces OpEx through improved network uptime (which in turn can avoid or reduce penalties related to outages), higher user productivity, ease of operations, and energy savings. Consider creating the simplest solution that meets the business requirements (KISS * rule), and include staff experience in the equation in order to reduce OpEx.
Total Cost of Ownership (TCO) over time
TCO is a better metric than pure CapEx to evaluate network cost, as it considers CapEx plus OpEx. Make your network designs cost-effective in the long run and do more with less by optimizing both CapEx and OpEx.
Cost and the Triple Constraint
On your design, consider the triple constraint of Cost, Scope and Time: you can never simultaneously have all three!
If your customer wants:
• A large set of functions/features quickly, it won’t be cheap.
• A large set of functions/features cheaply, it won’t be fast.
• Fast and cheap, it won’t fulfill all/many functions/features.
Cost (CapEx) definitely matters, but it’s only one component. When you’re creating a network design solution, have a conversation with your customer and consider ROI and TCO instead of just a dollar figure.
* KISS = Keep it Simple…
Are you ready to have this conversation with your customers? Is there a topic you want to hear about on my upcoming blogs? Add it to the comments below!
Elaine Lopes is the CCDE and CCAr Certifications Program Manager and Team Lead for the CCIE program team, and she’s passionate about how lives can change for the better through education and certification.
Here are a few additional ways for us to engage and keep the conversation going:
- Cisco Learning Network CCDE Study Group
- Connect on Twitter too
- CCDE study materials for the Written and Practical exams
- Related Unleashing CCDE blogs: CCDE: The Pillars of the Earth Part 2, CCDE: The Pillars of the Earth - Part 3, CCDE: The Pillars of the Earth - Part 4, CCDE: Book of Questions, CCDE: Design Use Cases - Part 1, CCDE: Come Together, Customer Engagement in Network Design with Emanuel Lipschütz