Investment Board Battle : Leveraging System Availability
Working in Telco industry for several years has given me various perspective towards the overall ICT systems. By this writing I would like to extract some information taken from those years of experience.
The Story Begin
Telco business is providing services to their subscriber. Their revenue comes from subscriber transactions, including voice call, sms, data access, content purchase, and package purchase. Unlike Enterprise Company users which eventually access and utilize system, Telco Subscriber continuously utilize Telco infrastructure anytime and anywhere — concurrently. Can you imagine how’s the infrastructure in IT & CT that has been established to be able to handle such massive transactions?
Most of the time, our Technical Department people has been working very hard to bring such amount of capacity and capability into the system to handle those massive transactions. Their effort are enormous, both in technical aspect and non technical aspect. Based on my observation, i saw most of people in Technical Department has maginificent Technical skills, no doubt about it. So, I would try to portray from the other side — non technical. In order to bring the system into such capacity and capability, IT Senior Managers should have been (and still) expending cost in : purchasing infrastructures such as server, storage, network, and internet connection; application, be it in house or outsource; software licenses which follow the application and hardware. Speaking about numbers, this may take to huge amount of money, not just hundred million but up to tenth billion of IDR.
Every company has set up certain procedure to govern the budget approval until expense (execution). One sample of the procedure is establishing a forum called Investment Board — where all department should write proposal requesting for budget to be spend, present it and convince the board to approve it. Here comes the problem. Despite of their awesome technical skills, some IT Senior Manager only put number of money requested and some more technical detail such as number of server, storage, and software to be purchased — that’s it. In this circumstances, they forget the basic principle of communication — to make other people understand their message.
Common Solution : Basic Communication
One of the oldest principle of communication is to speak using the same language. In the above case, as the requestor side, IT Senior Manager should understand the thinking of Top Level Management, and speaking on the language they’re understand of. Profit, Revenue and Cost are top three item on the list of top level management. And most of the time, the underline question will be “What and how much is the return (or benefit) should I give you this amount of money ?”. Do you get it? Yes, rule of thumb will be these three : Increase Profit by Increase Revenue and Decrease Cost
System Availability — Why ?
OK, I would repeat in case that you missed it. Telco run their business by providing service to their subscribers; while subscriber can access it anytime and anywhere. So, when system become inavailable, Telco company cannot serve their subscriber to do transactions right? The terms will be “Potential Revenue Loss”. That’s the reason I am using System Availability as Use Case on the current writing.
System Availability — How Does The Math on Finance ?
Some people might think it is difficult to financially calculate system availability. Nah, it’s actually not that difficult. The basic equation is combination of financial information and technical operation data if there’s any. Finance Team usually has already information about average revenue per transaction while Technical Operation team has the data about current system availability (e.g : 99.9%) and average tps across the day.
- Revenue Loss per second. By simple math, revenue loss per second would be calculated by the factor pf average revenue per transaction and average tps across the day. For instance, average transaction is IDR (Indonesian Rupiah) 5,000 while average tps is 100. So, revenue loss per second will be IDR 500K.
- Revenue Loss per month Another simple math, revenue loss per month would be multiply revenue loss per second with duration of outage. For instance, Revenue Loss per second is IDR 500K, while system availability score is 99.9%. First calculation will be to find the duration. By 99.9% system availability means there’s outage of 0.1% equivalent to 2,592 second. Second calculation will be System Outage rate multiply with the above duration. With the above data, potential revenue will be around IDR 129.6 Mio
- Budget To Be Requested If you’re aiming to increase System Availability by 0.05% thus it can reach 99.95% availability then the max potential revenue covered will be IDR 64.8 Mio in a month or equivalent to around IDR 700 Mio annually.
Sounds Good, does the above guarantee IT Senior Manager to win the battle in Investment Board? No, Don’t be too rush, mate. You need to polish it more. The above writing has provide you one out of dozen sample to make a more understandable proposal to Top Level Management. Wait, why are you using IDR as a sample? I am Indonesian, and today when I do this writing is really our most celebrated special day as a nation — Independence Day of Indonesia.
Have more questions? Connect me on twitter @arydewo