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10 hidden costs of network management in 2020

Keeping control of network management total cost of ownership (TCO) can be difficult at the best of times, but the knock-on effects of the pandemic have made it even tougher.

Organisations in all corners of the globe have had to very quickly redefine how they operate. Business models and workforces are changing, as are the office locations, premises and workspaces that support them. More people are working from home, more flexible working patterns are emerging, and different lines of business are dramatically scaling up (or down) in rapid timeframes

All of these factors have a profound impact on an organisation’s corporate network, in terms of how it’s used and the investments needed to ensure it can enable the enterprise to adapt. Many corporate networks are under increasing pressure because they are being used in ways they were never designed for.

To adapt to the workplaces of the future and embrace the potential of digital transformation, businesses have to evolve and so are looking at how their networks can be re-engineered. However, in the current uncertain climate, it’s critical that they do so without letting their network management costs spiral out of control. As the following ten areas demonstrate, that can happen far more easily than you might think:

10 most common hidden costs of network management:

  1. Internal resources: day-to-day network maintenance tasks can quickly add up to drain time and money from IT departments. Tasks such as managing moves, adds and changes (MACs), software patching, or responding to security issues - are all important jobs, but they all take time to be done properly. Many organisations don’t track the time it takes for this level of maintenance, so the true cost of labour is not accurately measured. 

  2. Missed opportunities: many projects and initiatives focused on digital transformation overrun or are put on hold because IT teams don’t have the capacity to see them through. Companies facing these issues will lose ground to those who can successfully innovate and adapt.

  3. Inefficient network purchasing decisions: siloed network decisions can lead to new network assets and management software being procured without any consideration of how it can be integrated or how it may affect the overall network estate. Another area of wastage is due to over-speccing. This occurs when the highest-performing solution an IT team can get their hands on is purchased, only to find that it’s too excessive for what their business actually needs.

  4. Lack of network expertise: without specialist knowledge in place, organisations can easily make poor decisions around their network and fail to consider overall TCO. Choices can be made without careful consideration, which can lead to further costs elsewhere, such as additional kit, tooling and IT training.

  5. Network downtime and loss of productivity: every hour of downtime, whether caused by security breaches or technical failures, has knock-on financial impacts business-wide, such as a slowdown in productivity. Yet these indirect costs are often overlooked because they are difficult to predict or quantify.

  6. Commercial and service inflexibility: the uncertainty and volatility of the current business environment means all companies need flexibility in their networks, so that extra costs caused by unused office buildings, for example, can be avoided.

  7. Capital expenditure and depreciation: upfront capital expenditure on network assets; over-speccing that leads to unnecessary kit purchasing; licence expiration and depreciation to zero for end-of-life parts - all add to TCO, especially if not managed and overseen properly.

  8. Network auditing: irregular auditing causes additional costs as the process effectively has to be started from scratch each time, and if audits are conducted by inexperienced personnel, costs can rack up if mistakes are made.

  9. Managing multiple vendors: valuable IT staff time is taken up by dealing with multiple vendors, each of which will have their own SLAs, demarcation lines and service credit systems - this is on top of the effort needed to conduct regular service reviews, negotiate terms, as well as exit contracts or renew vendor services.

  10. Rising complexity and heightened security: with so much recent upheaval, network vulnerabilities have increased due to the need for more relaxed security protocols to enable businesses to adapt. Indeed, it’s a tricky balance to remain compliant, while faced with the need to keep the business operational and the workforce productive. This can lead to rising complexity and an overall network security provision that is increasingly costly to manage.




In summary

The question of whether IT should be completely ‘owned’ is more pertinent than ever, as a result of the pandemic. The increased adoption of cloud and the ‘as-a-service’ utility model, as well as the aversion to capital-intensive projects and the high TCO of network management - have all influenced this changing mindset. 

If organisations can simply buy or rent their end-to-end network from a specialist provider without fearing a loss of control, then why choose the more painful path of building it from the ground up? With the former, the cost of ownership can be significantly reduced, while the performance, reliability and security of the network can at the same time be greatly enhanced. 

At a time where the corporate network will inevitably have to change, it’s vital that any future investment decisions are informed by an accurate understanding of current TCO. Calculating this correctly before deciding on the best way to evolve the network, will have a huge influence on your direction of travel.

If you are unsure of the real costs of owning and managing your corporate network, take a closer look at our guide, Network management: The true cost of ownership’. At a time when you may be facing key decisions about the future of your corporate network, it can help you more accurately assess the true, total cost of your current network management approach.  

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