Mart Doyle
MIS 2501 Sec 002
1/21/2015
Did you know that our organization has been losing on average $25,000,000 a year!
These huge losses can be traced directly back to our out of date and inefficient data center. As
of now we operate on a Tier 1 data center. Last year alone the firm experienced 10 outages in
our ERP system. This is equal to 1,734 minutes, or 29 hours, of downtime due to these data
center failures. At the cost of $14,800 per minute, along with the concurrent costs of missed
business opportunities, the organization incurs massive losses. Well the good thing is there is a
solution that could turn our current liability into a future asset. That is a full upgrade of our data
center from Tier 1 to a new Tier 3 system. This upgrade would decrease the amount of
downtime per year in turn saving the company money.
The current Tier 1 data center we operate is plagued with outages and downtime due to
the lack of redundancies present in the system. One example of this is the presence of only one
incoming power source connected to the current Tier 1 system. This lack of electrical back up
could lead to outages due to failures in the electric company along with any wide range power
outages in the local grid. Our new Tier 3 data center will have multiple incoming power lines all
sourced from separate companies. This leads to a more reliable power source. Also our new
data center will be equipped with backup generators that can keep the data Center operational
for up to 72 hours after the loss of power. Also this new center will be equipped with a
redundant cooling system that will allow for routine maintenance to be done without having to
shut down the operation of the data center. All of these redundancies add up to a more reliable
data center that will have 99.98% availability. This higher availability will allow our businesses
ERP systems to run more efficiently with less possibility of an outage. The total outage time
with this new technology will decrease from 1,734 minutes to a minuscule 105 minutes. The
organization is also growing, and the new Tier 3 database will be better suited to aid in the
smooth growth of the company. Less outage time means that there is more time for the
organization to make profits.
The initial investment needed to complete this project is $35,000,000. The construction
will take a year before it is up and running. When we look at this investment over a 3 year
window we find that in year 2 alone the company will save $24,114,528, base on estimates, due
to the drop in data center downtime. Again in year 3 a savings of $24,114,528 can be expected.
After running a 3 year short term cost benefit analysis, which can be found on the next page,
we concluded that the company would see a positive return on investment of
$13,229,056.These savings are significant and my teams believes it warrants the initial
investment from the organization.