Justify CMDB ROI with these strategies

IT pros can easily list off CMDB benefits. But when it comes to convincing the business to pay for a CMDB implementation, you'll need to discuss ROI.

Editor's note: This story, originally published Dec. 12, 2007, was updated for clarity on May 12, 2017.

Change is a constant in data centers -- and a constant problem, at that. Change one thing on a server here and something may break on a server there, often in surprising ways.

Configuration management databases (CMDBs) promise to make critical configuration dependencies more obvious, lay the foundation for orderly change and eliminate unpleasant surprises caused by changes to the IT estate.

But data center managers face a tough prospect when making the business case for a CMDB implementation: The true value of CMDBs and other initiatives designed to improve IT service management -- such as the IT Infrastructure Library (ITIL) -- strain traditional return on investment (ROI) calculations. In the effort to gain approval for a CMDB implementation, IT managers have three basic strategic approach options.

  • Short-term CMDB ROI: Fix immediate problems, such as having too many servers, to yield cost savings.
  • Midterm CMDB ROI. Improve overall service delivery via configuration control.
  • Long-term CMDB ROI. Ensure IT alignment with business goals via optimal management. This approach necessitates a CMDB or similar tooling to be combined with associated processes.

CMDB ROI challenges emanate from the very nature of a CMDB itself. In essence, a CMDB is just a repository of data about stuff -- in ITIL parlance, configuration items (CIs) -- on the network and in the environment. As a storehouse of information, a CMDB will pay off only when the information within one is both accurate and actionable. Consequently, without associated tools, such as discovery, inventory and application dependency mapping technologies that enable data center teams to monitor the environments in real time or close to it, the value of a CMDB is limited.

"There's a whole ecosystem of technologies that organizations need to leverage other than just configuration tools," said Dennis Drogseth, a vice president and senior analyst at Enterprise Management Associates (EMA), an analyst and consulting firm.

In many cases, an organization will already have several of these tools, such as asset management software or inventory and discovery systems. A CMDB links islands of data together and provides organizations with a universal view of a data center environment.

However, there is a potential pitfall to CMDB implementations: Organizations struggle to articulate the ROI on the time, money and effort needed to run the project and maintain accurate CMDB data.

One of the big benefits of [CMDBs] is return on avoided outages, but that's tough to calculate.
Jay Longformer manager of IT service management, Forsythe Technology

To make CMDB ROI apparent, IT teams must develop process standards for change management. Combined with the discipline of change management, a CMDB supports improvements in IT service delivery, which can generate cost savings.

All told, a large enterprise may have to spend several million dollars and up to three years to get a CMDB fully functional, according to EMA.

"Determining an ROI around CMDBs and ITIL is hard because we're talking about productivity gains," said Jay Long, former manager of IT service management at Forsythe Technology Inc., an IT consulting company based in Chicago. "One of the big benefits of [CMDBs] is return on avoided outages, but that's tough to calculate because there's no empirical evidence available." 

CMDB ROI: Where you can save 

IT managers who have deployed CMDBs cite several additional areas of savings, from the ability to reduce or eliminate servers and other hardware to better license and maintenance contract management, as well as labor savings and tighter outsourcing agreement oversight.

Server reduction. By storing centralized information about CIs -- from servers to license information to network devices -- a CMDB can provide insight into the entire IT environment. That insight can inform decisions that lead to more efficient operations. Perhaps only 75% of servers are used at high capacity, for example.

By having a centralized CMDB that points to utilization rates for all servers, an organization can institute a universal way of tracking and documenting assets. In that case, a company can either consolidate servers using virtualization or ditch underutilized machines, both of which save money.

"Companies can see the ROI from virtualization because servers are pulled off of the data center floor," said Mike Tainter, senior principal advisor at Forsythe Technology. 

Licensing and maintenance savings. Software licenses and maintenance contracts are also issues that organizations can streamline based on information collected in a CMDB. Companies that track their licenses and know where they are installed may discover that they own twice as many licenses than are being used, and can nix the unnecessary software.

"Many organizations buy maintenance contracts in a piecemeal fashion, so they expire at different times," Tainter said. "If you can negotiate coterminous contracts, you can get volume discounts."

Outsourcing savings. For Simon Gilhooly, former global head of technical systems at Linklaters, a London-based, multinational law firm, CMDB ROI has come in the form of reduced maintenance costs.

"We use our inventory information to manage our hardware maintenance outsourcing deals," Gilhooly said. "For servers that we are no longer using, we terminate the maintenance deals so we are not wasting money on them."

At Linklaters, a CMDB from BMC Software Inc. was complemented with application dependency mapping software from Tideway Systems, which enabled the firm to determine relationships among applications and CIs dispersed among four data centers worldwide. According to Gilhooly, the company's key reason for implementing a CMDB and the associated infrastructure tools initially revolved around preserving Linklaters' investment in a disaster recovery (DR) plan.

"One of the biggest challenges for disaster recovery is making sure that the plan keeps up with changes to the infrastructure," Gilhooly said. "The CMDB can help by highlighting change requests that have a potential impact on the DR plan."

Ready to start a CMDB implementation?

To source a CMDB tool for enterprise IT use, don't start by comparing tools. Instead, do your research into what a CMDB platform accomplishes, what it can do for your kind of organization, how to buy CMDB software and how to select the right one. Then, with that knowledge, you'll be ready to compare the top tools on the market. 

As for downtime-related savings, Gilhooly doesn't have precise figures, but believes, nonetheless, that the CMDB more than pays off.

"Downtime cost is quite variable for us because lawyers can often work around small outages," Gilhooly said.

However, based on some initial calculations, Gilhooly estimated that a complete outage affecting a single data center would cost Linklaters about $715,000 per hour, while downtime for a single lawyer would cost about $408 per hour.

"Once the DR plan is broken, the cost of repair would be quite high, so it's best not to get into that position," he added.

Labor savings. Matt Giblin, former manager of the enterprise systems management team at Mercy Health Services, a 650-physician hospital system in Baltimore, implemented a CMDB from Altiris, which is now part of Symantec.

"The only focus was converting our help desk from a homegrown system to Remedy," Giblin said. Remedy is help desk software from BMC Software. "We wanted a centralized CMDB so that the help desk could tie into it."

Initially, Mercy Health used the CMDB to inventory the workstation environment. When the hospital undertook a data center redesign, moving to an HP BladeSystem server architecture, Giblin opted to expand the CMDB to include server information.

Mercy Health's CMDB server information encompasses patch management, inventory, provisioning, software delivery and contract management.

"In terms of server management, our costs are primarily in resource time and manpower," Giblin said.

The CMDB includes information on the hospital's 100 physical servers, such as names of host bus adapters.

"We don't have to go out and physically touch the machines anymore," he added. "This takes our server management up a notch."

And Mercy Health hasn't stopped with servers. The hospital uses its CMDB to track clinical assets, including equipment such as respirators and IV pumps.

"These things are non-discoverable on the network, so we import the information into the CMDB from a third-party database," Giblin said.

To facilitate the discovery process, Mercy Health is considering radio frequency identification chips or bar codes on the equipment. Needless to say, this is not how Altiris intended its CMDB to work, but it's a way for Mercy Health to derive more return on its investment.

The major CMDB payoff 

CMDB tool vendors, such as BMC, CA Technologies, Hewlett Packard Enterprise, IBM and Managed Objects, are often quick to note the operational savings that result from a CMDB, but the biggest benefits are much harder to quantify.

"The real value of CMDBs comes from service excellence and fostering a service-oriented culture," Long said. "Service resolution time, business alignment, customer satisfaction -- that's what we're talking about at the end of the day."

But the biggest CMDB ROI comes when organizations use it to gain visibility into configuration information to make better decisions about change management processes.

From a purely operational perspective, Ronni Colville, a managing vice president in Gartner's IT operations management group, said that a view of CIs can result in improved risk assessment and root-cause analysis. In turn, those capabilities can result in more reliable change management processes and, ultimately, lead IT teams to manage business services.

One of the best ways to frame the ROI argument (at least in terms near and dear to a financial analyst) is to look at repair times, according to Drogseth.

"The dominant metric for financial types is reducing the mean time to repair," Colville said.

EMA's Drogseth described one company that quantified a CMDB in terms of downtime.

"The company figured that it cost $1 million per minute of downtime," he said. They reduced downtime by 70% by getting a cohesive view of the environment and reconciling existing infrastructure.

According to Drogseth, a 70% reduction in mean time to repair or in downtime overall is not an extravagant goal for most organizations looking to improve IT's operational performance, but getting to that point may require significant time and effort.

"It may require months or more than a year of process and organizational planning, as well as technology adoption," he said. "Don't forget the core problem here is really the siloed nature of how IT professionals have typically used tools ... This is first and foremost a political problem."

That said, however, Drogseth maintained that CMDBs enable most organizations to achieve significant benefits.

"Getting a cohesive, non-redundant and integrated set of trusted sources to support service performance in a disciplined CMDB system can and should produce dramatic value over time," he said.

Still, most organizations don't have the luxury of investing in a CMDB and implementing it purely on the faith that the tool will lead to service management nirvana -- and thereby deliver a solid ROI. IT managers should look carefully at the immediate, midterm and long-term benefits it can deliver and determine if there's enough there to build a case for a CMDB project.

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