Measuring the benefit of investment in ACI infrastructure

ICT leadership teams are becoming more sophisticated in how they build costs, benefits and risk factors into models to estimate Return on Investment (ROI) from technology infrastructure investment decisions.

Take for example the ROI for the transition from traditional, hard-wired network configurations to more virtual environments. Hard-wired networks have the disadvantage that virtual overlays on top of physical layers make it complex and problematic to add devices, services and policies. A move to datacenter automation these days often involves deploying Cisco Application-Centric Infrastructure (ACI), to streamline data center operations: anything from inserting a new switch into the network to rolling out policies. ACI helps ICT departments in a variety of ways, some of which are apparent and others not so widely understood.

Some obvious benefits of ACI and moving from Level 2 to IP networking are relatively tangible: cost savings from automating network reconfiguration and load balancing, reduced system outages and performance improvement from a robust Application Programming Interface (API) that doesn’t break when software is upgraded. An example of an important though less measurable ACI benefit is visibility from centralized real-time monitoring across physical and virtual networks.

Hard cost savings using ACI are likely to include a sharp reduction in person-weeks required to test and accomplish data center migrations, less time to deploy new applications because hardware can be added very quickly and network configuration changes made almost instantaneously. Also, hardware costs are lower because ACI uses much less cabling and fewer switches than traditional hard-wiring.

While hard benefits are the most common way to justify technology investments like moving to ACI, ICT leaders are developing new ways to measure the strategic value of technology investment to senior management and other key business stakeholders. These include methods to verify realization of benefits after the project has been completed.

For example, embedded ACI collaboration that at some point in the future enhances employee productivity has a present value that can be estimated. The value of faster network updates to support business agility can also be estimated—and appropriately discounted because experience shows that productivity gains don’t always result in actual increased output.

In fact, the new wave of modeling ROI is using triangular distribution techniques to generate a range of three possible values for the risk factor that should be applied to each cost and benefit in the ROI calculation.

These new approaches to measuring the benefit of a major upgrade such as to Cisco ACI architecture are becoming ever more important—because spending on even high-value technology must be justified to the CFOs who are accountable to boards and investors for preserving company capital.