Financial Aspects of Configuration Management

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Summary:

Many people think that to large companies Configuration Management is seen solely as a technical role and as a cost burden to the company. The following article explains however some of the financial aspects of the role. These are examples that have occurred during my role as Configuration Manager in several companies. In these roles I have been much
more than just a technician.

While working for a major UK company and we were faced with having to purchase many more licenses of several products from one vendor than we had first considered.   The salesman originally gave us a quote individual product pricing.  To try and save my
company some money I took a look at how we could be a little creative to get the price down. First, I knew that most vendors offer individual products bundled in a suite providing a cost advantage, so I took a look at at the vendor’s website to see what products in our inventory could be purchased bundled. I told the salesman to modify his quote based on the suite pricing. Next, having a knowledge of how this vendor works on pricing at the end or the month and end of the year (as do most), I asked the salesman to apply end of month and end of year pricing. And finally we applied our normal company discount to
the final package giving us even further savings.  In the end the company saved between £35,000 and £40,000, and it took me an hour of work.

The information on pricing and bundling for this vendor and most others is public domain, I just had to know where look for it.

While most companies have large budgets for new software licenses and upgrades, I think it is important as a Configuration Manager to advise senior management that this kind of price break may be available since I have a closer day to day working relationship with the vendor.

I believe that knowledge about the product and the vendor is a very strong component of a Configuration Manager's makeup. Another example of this was while I was working for a major US bank in New York. At this company, we again had to make a large product purchase and the development manager wasn't sure how to justify the costs.  I was able to build a costing model using an excel spreadsheet that allowed for bundling the products where we could, and indicate where had to buy single products. I did this as I watched a football game in my hotel room. Although it took several hours to get right it
right, the reaction of the manager was perfect. He could enter different purchasing
scenario's in order to get the best result for company. He was easily able to justify the costs to his senior manager who happened to be to deputy CIO of the bank.

In another example of how product knowledge is important to the Configuration Manager ,   I took over the Configuration management department while working for a cell planning application company. This group was also responsible for the configuration of the physical development and testing environments. We had 13 servers in the development and build area alone. All the servers had different maintenance agreements associated with them and the annual bill for this was horrific. When I began an investigation
into the cost of the maintenance I found the agreements where all mixed up. There
were gold contracts on view servers and bronze contracts on vob servers. It all had to re-arranged. I also looked at the total usage of all the servers and discovered that out of the 13 servers 7 were redundant and could be removed completely from the network. The re-arrangement of the development environment to make sure we had the correct version of the operating system, the correct maintenance agreements in place and redundant servers removed saved the company £50,000.

One of the biggest challenges facing Configuration Manager s comes when senior
management asks which Configuration Management tool we should use.  Many times the one we choose has the bean counters in the company saying, "It is too expensive. We need to reduce the

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