Erich Stauffer

Tag: roi

  • 5 Ways to Compute Cloud Computing ROI

    The future of IT is in cloud computing, but how do you explain that to the “C” level executives? This model uses two specific business metrics and 5 ways that you can explain the ROI of cloud computing to your boss or to the board:

    • IT capacity – storage (GB or TB), CPU cycles (GHz or THz), network bandwidth (Mbs or Gbs), and/or memory capacity (RAM) a measure of performance.

    • IT utilization – uptime availability (% available per year) and volume of usage (# of requests) as indicators of activity and usability.

    Effective cost/performance ratios and levels of usage activity do not necessarily imply proportional business benefits. They are just indicators of business activity that are not in themselves more valuable than lower operating costs. What is needed instead is a set of business metrics that build on the cloud computing model.

    The following are business metrics that can help translate the indicators from the capacity-utilization curve to direct and indirect benefits to business and examples of how a CAPEX is different than an OPEX in cloud computing:

    1. The speed and rate of change – Cost reduction and cost of adoption/de-adoption is faster in the cloud. Cloud computing creates additional cost transformation benefits by reducing delays in decision costs by adopting pre-built services and a faster rate of transition to new capabilities. This is a common goal for business improvement programs that are lacking resources and skills and that are time sensitive.

    2. Total cost of ownership (TCO) optimization – In cloud computing, users-not just IT-can select, design, configure, and run infrastructure and applications that are best suited for their business needs. Traditionally this has often been strictly in the realm of IT even after projects are handed off to production services, but in cloud computing environments end users are more involved.

    3. Rapid, elastic provisioning for dynamic usage – Resources can be scaled up and down to follow business activity as it expands and grows or is redirected. Provisioning time compression can go from weeks to hours. This service management affects end users and business needs as the scope of functionality and services for users evolve and seek new solutions.

    4. Increased margin and cost control – Revenue growth and cost control opportunities allow companies to pursue new customers and markets for business growth and service improvement. And because it can scale, IT avoids over-and under-provisioning of IT services to allow for smarter business services. This is enhanced capacity utilization, the ability to add and use hardware on-demand without extra hardware or labor costs.

    5. Business process improvement – Cloud computing capabilities can be leveraged through shared services. Users can have access to business capabilities allowing improvement or development of new skills and solutions through cloud sourcing and on demand solutions like Amazon Web Services, Google Apps, IBM Cloud Computing, Microsoft Azure, and HP Cloud Assure.

    These five measures define a new set of business metrics that can be used to create a matrix and dashboard of your current and future operational business and IT service needs relating to your cloud computing potential return on investment.

  • ROI on Traditional Mail Marketing Campaigns

    Peter K. Francese, President of American Demographics, is famous for his rule of thumb, “If you get more than two replies for every hundred pieces of mail you send out, you’re doing great.”  This is because in the old days, a 1% return on a direct mail marketing campaign was considered successful and eventually became the standard.  Recently, some email marketing companies have touted returns as high as 1 in 57, but once you convert that to a percentage, it is still in line with the overall average of 1-2%.  So is direct mail or email the best route for your business?

    Gary Christensen, who has been writing about making profit through the mail since 1973, recommends a “2-Step Method”.  The first step is mailing as many small ads as you can in order to draw inquiries.  These ads should contain something for the reader in exchange for contacting you.  The second step is to process the iquierers by contacting them by phone or another round of mail.  The same could also apply to email.  In this way, you are spending more money only on those who may actually be interested in what you have to offer, rather than sending out more information to more people first, which is more costly.

    However now that we have discussed both the traditional ROI and the 2-Step Method, you can see that there may be a better way to gain more customers or clients for your business.  The more targeted the ad, the less money you need to spend, and the more the return on investment.  This is how Google, Bing, Amazon, and other online advertisement companies have changed the marketing landscape in the last decade.  Instead of blasting out your message to 99% of the wrong audience, you can pay to only speak to the people already searching for your product or service.

    If you have more questions about promoting, advertising, or marketing your business, services, or products online, please contact Erich Stauffer at http://erichstauffer.com.

  • Life ROI

    How to judge the return on investments you’ve made in your life.

    Using the base point of a high school graduate or GED equivalent aged 17-18 years old, what life investments show the greatest ROI (return on investment).  Is it better to start working for another company right away to build experience and move up the corporate ladder or is it better to sit it out four years in college, then start at the bottom working for another company?  Is it better to attend a trade school or 2-year college then enter the workforce as a type of hybrid?  Is working for someone else better than starting out on your own in the beginning, middle, or late in your working life?  How does being married affect your success in life?  Does it matter if your spouse supports you or if you have an unhappy marriage?  How do children affect success?

    There are many metrics and many examples of each scenario.  It is hard to know how you want to end up when you are 17-18 years old, but if you could do it all over again – if you could share your experiences with someone just starting out – or just laid off and starting over – what advice would you give them?

    My Path

    After high school I attended college for 5 years during which time I got married and had children.  I graduated with a bachelors degree and a mountain of debt, going to school and working full time as a bank clerk during and after college.  It wasn’t until I went back to school to get Microsoft certifications that I could get beyond the clerk job.  The 6-month certification training nearly doubled my 5 year investment in college tuition and board.  I watched as peers who didn’t go to college at all were at or above my clerk level and were without the college loan debt.  The only thing that allowed me to move up was going beyond the BS degree.  Because of that experience I tend to recommend going straight into a technical training field or apprenticeship straight out of high shool whether you plan on working for someone else or yourself.  Become an expert in your field and above all, follow your passions, but listen to those around you.  If you keep hearing the same advice from different people, its probably right and should be considered.

    Success can be measured many different ways.  While children may take your time and energy, they also give you motivation and fulfil your innate desire to leave a legacy behind.  The joy and agony that comes from raising children is uncomparable to any other duty in life.  Have you ever heard that behind every good man is a great woman?  This is usually true if the man and wife are supportive and loving of each other.  A constant bickering under one roof can only restrain what could otherwise be successful endeavors.  How can we measure success?  How do you measure success?