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A quick ROI analysis can help you make key NT
migration decisions
Before doing the math, do the footwork: Understand the
business reasons for doing an ROI analysisthen choose a technical
path
By Shari L. Jones
Your company, like many others, is considering
migrating to Windows NT 4.0. As an IT executive, your charge is to
evaluate and plan a strategy for implementing the technology in the most
efficient, timely, and cost-effective manner. But where do you begin? What
you need is a quick and efficient way of conducting a return on investment
(ROI) analysis to ensure you're making the right Windows NT migration
decisions, before thousands of dollars are spent.
Calculating the expected ROI for implementing new
technologies is one way IT executives can justify IT expenditures. However
simple it may seem, the task of calculating ROI can be time-consuming and
somewhat arduous. In this first half of a two-part look at ROI analysis,
we'll take a look at the business reasons for conducting an ROI analysis
and explain how to make the right technology decisions as you add and
deploy new systems.
On July 20, we'll put you to work. Using our
interactive ROI calculator, we'll help you estimate the ROI for a Windows
NT migration. (If you haven't already done so, you can subscribe for free
to Windows NT Advantage,and its editors will send you an e-mail
alert when the calculator is posted.)
Choosing a path In light of Microsoft's new
strategy to migrate its customer base to Windows NT 4.0 or Windows 2000,
many organizations are deciding to skip Windows 98 altogether and move
directly from Windows 3.1, Windows 95, or Windows NT 3.5 platforms. So, if
your company is considering migrating to Windows NT 4.0 or Windows 2000,
an ROI analysis is recommended to ensure you make the most cost-effective
business decision.
Support for older Windows operating systems, such as
Windows 3.1, is virtually coming to an end. Microsoft aims to switch all
future client development to Windows NT, making Windows 98 the last of the
DOS/Windows hybrids, according to a white paper published by Giga
Information Group entitled, "Client NT: Strategies for Successful
Migration to Windows NT Workstation." As a result, you must migrate to a
newer Windows operating system if you want long-term support and if you
want to keep pace withor surpassyour competition. After all, your
competition may already have made the migration from Windows 3.1,
providing employees with a more efficient and user-friendly interface and
preparing for Microsoft's new client strategy.
| Back to basics: What is ROI? |
An ROI analysis is a measure of the return on an IT
investment. The return can be either extra revenue generated,
cost savings, or both combined, as contribution to profit.
According to the research group International Data Corp.,
investments that affect the total cost of ownership (TCO)
include purchases of hardware and software, maintenance
charges, software license and support charges, support
staffing, application development, and asset
lifecycles.
ROI can be expressed mathematically as the
ratio:
ROI = Return / Investment
ROI equaling 1.0 means that the amount of
money saved or earned equals the cost of the original
investment. ROI greater than 1.0 indicates that the investment
is worthwhile, since you're saving your organization more
money by proceeding with the investment than you're spending
on the investment. ROI less than 1.0 generally indicates that
the cost savingsor extra revenue obtainedfrom the investment
are less than the original investment. In other words, you may
end up saving $1 million, but at a cost of more than $1
million. This doesn't necessarily mean you shouldn't go ahead
with the investment, as it may deliver other nonquantifiable
benefits and advantages.
The ROI can be expressed as a
percentage by multiplying by 100 the figure you get when
dividing return by investment. For example, if your ROI was
1.5, multiply that by 100, equaling 150 percent. That means
your organization realized a 50 percent return for its IT
investment.
Since ROI calculations are usually
performed before making a large investment decision, the
return is usually an estimate of future returns. The
investment also is an estimate that may appear more concrete
or definite at first. However, as you have probably
experienced, the final cost of any hardware or software
purchase often is differentsometimes less, but often
morethan the original estimate.
It is important to
realize that the accuracy of the final ROI figure is only as
accurate as the estimates you use for the return and
investment parts of the equation.
Upper management
generally likes to see an ROI estimate. In order to win
approval for any proposed project, however, you also should
look at other benefits the project delivers to your
organization. For example, an early migration to Windows NT
4.0 is likely to make the transition to Windows 2000 easier
and less costly. | |
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If you've made the decision to migrate to a newer
Windows OS from Windows 3.1, Windows 95, Windows 98, or Windows NT 3.5,
you're faced with yet another decision. You must decide if it's best
to
- Migrate to Windows NT 4.0 now, then to Windows 2000
when it becomes available
- Wait for Windows 2000 Professional
- Migrate to Windows 98 now and implement Windows 2000
Professional later, taking into account the uncertainty of how long
Windows 98 will remain a part of Microsoft's long-term development
strategy
Microsoft promotes migration to Windows NT 4.0, which
should provide an easier upgrade to Windows 2000. Some industry analysts
support that theory; however, they also point out that Windows NT 4.0
doesn't provide the configuration utilities for an easy migration from
Windows 3.1, Windows 95, Windows 98, or Windows NT 3.5. IT experts hope
Windows 2000 will have some utilities to support migration from Windows
3.1, Windows 95, Windows 98, Windows NT 3.5, and Windows NT 4.0, though
migration from Windows NT 4.0 will be the most complete.
Windows NT Workstation 4.0 delivers the highest ROI
compared to any other version of the Windows operating system, according
to several independently conducted studies cited in a white paper by
Microsoft entitled, "Microsoft Windows NT Workstation: A Business Case for
Windows NT Workstation 4.0 Today." The magnitude of the return depends
greatly on the job type and the level of PC usage. After compiling the
potential net benefits, even occupations with low PC usage can realize net
gains (through reduced total cost of ownership, or TCO) of $3,400 per user
per year, Microsoft studies indicate. For high PC usage occupations, net
gains can rise dramatically, by approximately $5,300 per user per
year.
The most cost-effective way to deploy almost any new
operating system today is to order new machines with the operating systems
preinstalled. The increasing popularity of cloning tools to copy an entire
PC configuration aids in rapid deployment for similar existing machines
capable of running Windows NT Workstation 4.0.
Whether you decide to move to Windows NT Workstation
4.0 now or to wait for Windows 2000 Professional, a quick ROI analysis is
recommended, along with other "best estimate" measures. Early Windows 2000
adopters face the biggest challenges, but with proper planning, they will
have more time to overcome them.
Choosing the Windows NT 4.0 path now Microsoft
intends to switch future client development from Windows 3.1, Windows 95,
and Windows 98 to Windows NT and Windows 2000, according to the Giga
Information Group white paper. This means that IT organizations must begin
planning their migration strategies if they want to stay in sync with
Microsoft's plans. By moving to an NT 4.0-based environment today,
organizations can shorten the ramp-up time for Windows 2000 when it
arrives on the market.
Deciding when to make the move from Microsoft Windows
3.1, Windows 95, Windows 98, or Windows NT Workstation 3.5 requires risk
management. There are several questions you should ask yourself, including
the following:
- Does the new Windows client technology support my
organization's legacy applications?
- What is the makeup of the installed base?
- Will my organization need to purchase new hardware?
- Does my support team have the required skills to
provide a smooth migration?
| Early Windows 2000 adopters face
the biggest challenges, but with proper planning, they will have
more time to overcome them. |
Hands-on experience is key to successful deployment of
Windows NT Workstation 4.0. Time spent early on in the migration or
integration working out, detecting, and correcting problem areas
translates into a smoother rollout with reduced risk to your organization.
For example, network administrators must have a clear understanding of the
differences in error recovery after a system crash between Windows 3.1 and
Windows NT 4.0. When reconfiguring a Windows NT system, administrators
cannot simply access a DOS prompt to reboot like they could with Windows
3.1. In this example, Windows 3.1's use of ini files allows administrators
to edit the system file, but Windows NT's registry, the equivalent to
Windows 3.1's ini file, cannot be edited. Differences like this could slow
down the migration process if administrators are unfamiliar with them.
Taking the time to learn the new system up front decreases the potential
for costly delays, which are often the cause of failure during major
platform shifts.
Whether or not your organization effectively addresses
these issues will determine the level of risk involved. A careful planning
phase is mandatory. You should not rush your organization into
implementing Windows NT Workstation 4.0, but you should evaluate carefully
your existing environment and then determine how Windows NT Workstation
4.0 can meet your technical and business goals.
Adopt now There are distinct advantages to
adopting Windows NT 4.0 now, rather than waiting for Windows 2000. Your
organization will be able to identify problems and devise workarounds
during the early phases, while the platform is still an optional
component. Your organization's IT and help-desk personnel will need time
to familiarize themselves with Windows NT Workstation 4.0. By moving to
Windows NT 4.0 early, your organization gives its IT staff the time it
needs to learn the new system.
| Whether you decide to move to
Windows NT Workstation 4.0 now or to wait for Windows 2000
Professional, a quick ROI analysis is recommended, along with other
'best estimate' measures. |
One of the biggest challenges to widespread adoption of
Windows NT Workstation 4.0 is the lack of a migration utility for Windows
95 users. Users who want to migrate to Windows NT Workstation must perform
a new installation of NT, according to the Giga Information Group white
paper. They then must reinstall all of their application programs, which
proves to be a time-consuming task and a risk that some IT organizations
aren't willing to take. Windows NT 4.0 does include a migration utility
for Windows 3.1 users.
Based on the study by Giga Information Group, more than
60 percent of the Windows installed base is still running some derivative
of Windows 3.1. IT organizations running Windows 3.1 should have a
smoother road to NT 4.0. Organizations running Windows 95 or Windows 98
will need to either re-create the system from scratch under Windows NT 4.0
or wait for Windows Professional 2000, which is expected to include a
Windows 95/98 migration utility.
It may be easier to bypass Windows 95 or Windows 98
entirely and go directly to Windows NT Workstation 4.0, according to the
Giga Information Group white paper. Moving to Windows 95 or Windows 98 in
the interim may only complicate the eventual migration process. But if a
mixed Windows environment is necessary, management should see little
impact. There are many similarities between Windows 95, Windows 98, and
Windows NT Workstation, including the applications, the user interface,
the programming model, and management tools.
A mixed 32-bit Windows environment may be inevitable
during the transition to Windows NT Workstation 4.0. Many users in your
organization require the increased manageability, reliability, and
security of Windows NT Workstation 4.0. If, however, your organization
standardizes with Windows NT Workstation 4.0 now, it will be best suited
to take advantage of Windows 2000 Professional when it hits the
market.
Change is rarely easy. If you move too quickly when
migrating to new technology, the challenges you face may put you on the
bleeding edge of technology. If you move too slowly, your competitors may
implement the latest technology and leave you behind. Information gathered
in an ROI assessment is the key to successfully moving your technical
environment to Windows NT.
The Windows 2000 path What if the ROI
assessment, along with other key return/investment indicators, proves that
the migration to Windows NT Workstation 4.0 will be too costly? An
alternative is to wait for Windows 2000 Professional.
Waiting for Windows 2000 Professional will allow
organizations to leverage the newer version's migration facilities. You
should, however, consider that it may increase risk due to a compressed
rollout schedule.
Distinct advantages to this approach include a
simplified upgrade path for Windows 95 and Windows 98 users and a
standardized desktop OS that is easy to use, meets business end users'
needs, and provides tools to make the desktop even easier to manage.
Microsoft says many of its customers have reported that they plan to
standardize on Windows NT Workstation 4.0/Windows 2000 Professional to
achieve standardization and lower TCO.
| Change is rarely easy. If you move
too quickly when migrating to new technology, the challenges you
face may put you on the bleeding edge of technology.
|
One of Windows NT 4.0's major shortcomings is its
inability to directly upgrade a Windows 95 or Windows 98 system, because
Windows NT 4.0 doesn't understand the Windows 95/98 registry. There also
is no facility for copying application settings or user preferences from
the old to the new system. The only real option is to re-create the system
from scratch under Windows NT 4.0. Windows 2000 will include a Windows
95/98-to-Windows 2000 migration utility, which will allow administrators
to upgrade legacy systems directly. For this reason, organizations that
need to upgrade many Windows 9x systems may want to seriously consider
waiting for Windows 2000.
Windows 2000 Professional also will include support for
plug-and-play, which eliminates many of Windows NT 4.0's legacy hardware
incompatibilities. However, this support requires the widespread
acceptance of the Win32 Driver Model. Developers appear to be adopting
this new standard rapidly and are hesitant to rewrite their Windows 95
device drivers, which is good news in support of Windows 2000
Professional's plug-and-play feature.
About the author: Shari Jones is a consultant for a
large international consulting company. She is a technical writer and
freelance journalist covering all areas of the high-tech industry
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