Enterprise operations management Handbook steve blanding

Enterprise Operations Management
HANDBOOK
2ND EDITION


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Enterprise Operations
Management HANDBOOK
2ND EDITION

Steven F.Blanding
EDITOR

Boca Raton London New York Washington, D.C.


Library of Congress Cataloging-in-Publication Data Enterprise Operations Management
Handbook/edited by Steven F. Blanding.—2nd ed. p. cm. Includes index. ISBN 0-8493-9824-X
(alk. paper) 1. Information Technology—Management. 2. Client/server computer—Management
3. Business enterprises—Computer networks— Management. 4. Electronic data processing
departments—Management. I. Blanding, Steven F. HD30.2.H364 1999 658′.05–dc21 99–39628
CIP
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Contributors
ANN S.ANGEL, President, Technologies Training of the Triad, Inc., Winston-Salem and
Greensboro, NC
JOE AUER, Founder and President, International Computer Negotiations, Inc., Winter
Park, FL

C.WARREN AXELROD, Senior Vice President, Corporate Information Systems,
Carroll McEntee & McGinley, Inc., New York, NY
LAYNE C.BRADLEY, Vice President, Technology Management Group, Computer
Sciences Corporation, Fort Worth, TX
CHARLES V.BREAKFIELD, Senior Engineer, Symposium Professional Services,
Nortel, Dallas, TX
JOE R.BRIONES, Manager of Computer Services, Computer Sciences Corporation, Ft.
Worth, TX
THOMAS A.BROWDY, Director, Center for the Application of Information
Technology, Washington University, St. Louis, MO
ROXANNE BURKEY, Senior Consultant Designer, Symposium Professional Services,
Nortel, Dallas, TX
VISHAL DESAI, President, Savli Group, Silver Spring, MD
EDWARD S.DEVLIN, Independent Consultant, Westchester, PA
S.ANN EARON, Director, Telemanagement Resources International, Inc., Skillman, NJ
COLE H.EMERSON, President, Cole Emerson & Associates, Fair Oaks, CA
JOHN FISKE, Independent Writer, Prides Crossing, PA
MICHAEL L.GIBSON, Professor of Management, Auburn University, Auburn, AL
CARL STEPHEN GUYNES, Professor, College of Business Administration, University
of North Texas, Denton, TX
RON HALE, Senior Manager, Deloitte & Touche LLP, Chicago, IL
IAN S.HAYES, Principal, Clarity Consulting, Salem, MA
ROBERT L.HECKMAN, Assistant Professor, School of Information Studies, Syracuse
University, Syracuse, NY
GILBERT HELD, Director, 4-Degree Consulting, Macon, GA
LUKE HOHMANN, Vice President of Engineering, SmartPatents, Inc., Mountain View,
CA
KEITH A.JONES, Certified Quality Analyst and Senior Data Services Consultant, Dun
& Bradstreet, Palm Harbor, FL
LEON A.KAPPELMAN, Department of Business Computer Information Systems,

University of North Texas, Denton, TX
RANDY KECK, Technology Manager, Operations Control Systems, Palo Alto, CA
CAROL L.LARSON, Freelance Desktop Publisher, Beaverton, OR
JAMES A.LARSON, Senior Software Engineer, Intel Architecture Lab, Hillsboro, OR


ANDRES LLANA, JR., Telecommunications Consultant, Vermont Studies Group, Inc.,
King of Prussia, PA
MARTIN F.MEDEIROS II, Manager, Technology Procurement, United States Fidelity
and Guarantee Co., Baltimore, MD
STEWART S.MILLER, President and Owner, Executive Information Services,
Carlsbad, CA
NANCY BLUMENSTALK MINGUS, President, Mingus Associates, Inc., Williamsville,
NY
NATHAN J.MULLER, Independent Consultant, Huntsville, AL
WILLIAM HUGH MURRAY, Executive Consultant, Information Systems Security,
Deloitte & Touche, New Canaan, CT
JEFF MURRELL, Manager, Enterprise Computing Operations, Information Systems and
Services Division, Texas Instruments, Inc., Plano, TX
KATE NASSER, President, CAS, Inc., Somerville, NJ
PAUL NISENBAUM, Software Engineer, Candle Corp., Santa Monica, CA
RAJ RAJAGOPAL, Principal Scientist, MITRE Corp., McLean, VA
CHRIS ROOKE, Director of Product Marketing, Tandem Computers, Inc., Cupertino,
CA
SALVATORE SALAMONE, News Editor, Byte Magazine, New York, NY
TARI SCHREIDER, Director of Research, Contingency Planning Research, Inc., White
Plains, NY
GREG SCILEPPI, Executive Director, RHI Consulting, Menlo Park, CA
DUANE E.SHARP, President, SharpTech Associates, Mississauga, Ontario, Canada
ROBERT E.UMBAUGH, Principal, Carlisle Consulting, Carlisle, PA

MICHAEL E.WHITMAN, Assistant Professor, Department of Computer Science and
Information Systems, Kennesaw State University, Kennesaw, GA
STEVEN M.WILLIFORD, President, Franklin Services Group, Inc., Columbus, OH
JOHN WINDSOR, Interim Chairman, IS Department, University of North Texas,
Denton, TX
LEO A.WROBEL, JR., President and Chief Executive Officer, Premiere Network
Services, Inc., DeSoto, TX


Contents
INTRODUCTION
SECTION I IT MANAGEMENT
1 Strategic Planning: Business and Technology Issues
Layne C.Bradley
2 The Corporate Information and Communications Hierarchy: Technological
Management in Modern Enterprises
Thomas A.Browdy
3 Developing People Skills: A New I/T Priority
Greg Scileppi
4 Professional Consulting: The Analysis Methodology
Charles V.Breakfield and Roxanne E.Burkey
5 Pricing Methods Across Linked Networks
Keith A.Jones
6 Enterprise Modeling for Strategic Support
Michael E.Whitman and Michael L.Gibson
SECTION II DATA CENTER MANAGEMENT
7 Reverting to Centralized Data Center Management
C.Warren Axelrod
8 Acquiring and Using a UPS System
Gilbert Held

9 Providing Quality Information Services to the Customer
Joe R.Briones
10 Evaluating a Job Scheduler in the Open Systems Arena
Randy Keck
11 Help Desk Technology
Nathan J.Muller
12 Call Center Computer Telephony Integration: A Case Study
Charles V.Breakfield and Roxanne E.Burkey

1
5
7
16
32
39
51
59
73
75
84
91
101
111
118


SECTION III APPLICATION INFRASTRUCTURE AND OPERATIONS
13 Maintaining Data in Mainframe and Network Environments
Roxanne E.Burkey
14 Managing Data Storage and Distribution

Roxanne E.Burkey
15 The Data Center Manager’s Guide to Networked Imaging Systems
Nathan J.Muller
16 Collaborative Applications
S.Ann Earon
17 Supporting Legacy Systems
Nancy Blumenstalk Mingus
18 Client/Server Architecture and Implementation
Nathan J.Muller
SECTION IV ENTERPRISE NETWORK MANAGEMENT
19 TCP/IP Network Management: A Case Study
Vishal Desai
20 Trends in Data Communications Services
Nathan J.Muller
21 The Emerging Advantage of xDSL Technology
Andres Llana, Jr.
22 LAN Printing Techniques
Gilbert Held
23 Preparing for Cable Modems
Gilbert Held
24 LAN-WAN Interconnection Requirements and Implementation
Considerations
Duane E.Sharp
25 Enterprise Deployment: Building an IP PBX Telephony Network
John Fiske
SECTION V DESKTOP COMPUTING
26 A Quick Overview of LINUX
Raj Rajagopal
27 Evaluating the Performance of NT-Based Systems
Gilbert Held

28 Configuring TCP/IP on a Windows NT Workstation
Gilbert Held

127
129
136
143
158
163
168
184
186
195
205
215
223
230
242
248
250
258
266


29 More Productive User Interfaces
Paul Nisenbaum and Robert E.Umbaugh
30 Creating GUIs Users Can Use: Usability Analysis
Luke Hohmann
31 Building GUIs Users Can Use: Usability Development
Luke Hohmann

SECTION VI EQUIPMENT ASSET MANAGEMENT
32 Reducing the Cost of PC Connectivity
Salvatore Salamone
33 Evaluating Equipment: A Methodology for Success
Gilbert Held
34 Understanding the Desktop Management Interface
Gilbert Held
35 Managing the IT Procurement Process
Robert L.Heckman
36 An IT Asset Management Toolkit
Martin F.Medeiros II
37 How to Do Better Deals in Leasing
Joe Auer
SECTION VII CUSTOMER SUPPORT OPERATIONS
38 Managing the User Interface
Ann S.Angel
39 Managing End-User Development
John Windsor, Leon A.Kappelman, and Carl Stephen Guynes
40 Helping Users Help Themselves
James A.Larson and Carol L.Larson
41 The Consultative Approach to Client Support
Kate Nasser
42 End-User Computing Control Guidelines
Ron Hale
43 Reviewing End-User Applications
Steven M.Williford
SECTION VIII QUALITY CONTROL AND COMPUTER SECURITY
44 The Basics of Computer System and Data Network Security
C.Warren Axelrod

276
286
300
308
311
320
328
334
353
360
365
367
375
382
389
399
410
428
431


45 Achieving Quality in Data Center Operations
Jeff Murrell
46 Evaluating Platform Reliability and Measuring Its Dollar Value
Chris Rooke
47 Understanding the Virus Threat
Gilbert Held
48 E-mail Security and Privacy
Stewart S.Miller
49 Internet Security and Firewall Policies

William Hugh Murray
50 Improving Quality With Software Metrics
Ian S.Hayes
SECTION IX CONTINGENCY PLANNING
51 Introduction to Data Center Recovery Planning
Edward S.Devlin, Cole H.Emerson, and Leo A.Wrobel, Jr.
52 Developing a Data Center Recovery Plan: Part I
Edward S.Devlin, Cole H.Emerson, and Leo A.Wrobel, Jr.
53 Developing a Data Center Recovery Plan: Part II
Edward S.Devlin, Cole H.Emerson, and Leo A.Wrobel, Jr.
54 Integrating LANs Into the Disaster Recovery Plan
Gilbert Held
55 The Legal Issues of Disaster Recovery Planning
Tari Schreider
56 Using Televaulting and Hot and Cold Sites for Disaster Recovery
Gilbert Held
57 Data Processing and Communications Security During Recovery and Repair
C.Warren Axelrod

443
452
461
471
478
495
518
521
531
546
558

565
571
576

ABOUT THE EDITOR

585

INDEX

587


Introduction
IN TODAY’S CORPORATE ENVIRONMENT, enterprise technology operations extend
well beyond the traditional boundaries of the data center to touch virtually every aspect of
the organization’s business. Nearly every business need is supported in some way by
information technology. As IT operations professionals, you must be in a position to
deploy and support the best IT solutions across a broad range of technologies to
effectively contribute to your company’s competitive advantage.
To respond to your ever-expanding and growing needs as IT operations professionals,
this year’s edition of the Enterprise Operations Management Handbook has been
expanded to include four new sections:
• Applications Infrastructure and Operations.
• Desktop Computing.
• Equipment Asset Management.
• Customer Support Operations.
In these new sections, you will be introduced to the latest technology developments that
are shaping the industry. Also, this year’s edition of the handbook contains completely
new material—no chapters from last year’s edition have been repeated. This will provide

you with a totally fresh perspective of each area of the handbook.
The Applications Infrastructure and Operations section is designed to help IT
managers deal with these challenges by providing methodologies and solutions for
integrating new applications into existing, complex, multiple-platform computing
processing environments. The explosion of new client/server application technology has
forced the IT operations manager to be more closely involved with the integration of
these systems. The IT manager must be capable of analyzing and evaluating the impact of
new applications on existing enterprise operations. Because more than 70 percent of all
major application systems are still running as legacy systems on mainframe platforms, IT
managers are presented with critical challenges in how to integrate both internally
developed and purchased client/server applications with these systems.
Another new topic is Desktop Computing. IT operations managers must understand
the users’ desktop configurations in order to effectively provide enterprise-wide
computing services to all PCs connected to central computers through local area and wide
area networks. In addition, IT managers are typically responsible for centrally managing
user desktop software configurations through network management tools. In this section,
you will be introduced to a wide range of desktop computing technology solutions that
will help manage this important investment.
Also added to this year’s handbook is a section on Equipment Asset Management.
IT operations managers are responsible for the acquisition and maintenance of the assets
under their control. These assets include both IT hardware and software, ranging from
PCs and printers to mainframes and large enterprise-wide purchased applications. To
remain competitive, organizations must acquire and use information technology resources


Enterprise operations management: handbook

2

effectively With the introduction of new decision-support and systems development

tools, including prototyping methods, and end users’ growing computer literacy and
independence, serious attention must be given to not only receiving financial return on
investment, but also to acquiring quality products from multiple vendors who are reliable.
The responsibility for providing customer support for the use of technology deployed
by the organization’s IT department has grown dramatically over the last ten years.
Within most organizations, this responsibility is typically placed directly on the shoulders
of IT operations management. Customer Support Operations, another new section,
addresses the issues IT managers face in providing end users this valuable service. To
meet this challenge, IT departments are establishing customer-support help desks;
providing liaisons into the organization’s user departments; assisting end users with their
development of client/server applications; providing consultation through user-feedback
sessions; and delegating access and control of systems directly to end-user groups. The IT
operations manager must understand the best practices in providing these highly visible
and critical services.
This year’s edition of the Enterprise Operations Management Handbook also
reinforces the themes introduced in last year’s edition. These themes center around the
continuing shift of IT services deeper into the day-to-day operations of the enterprise.
Your ability to manage these IT services has, in turn, become more critical to business
success as technology becomes more embedded in the services provided to clients and
customers. As a result, enterprise IT operations managers must broaden their skills to
meet this challenge. This includes not only managing the traditional IT infrastructure, but
also enabling end users to more effectively use technology to deliver business products
and services.
As your job continues to change in support of the delivery of critical business services,
your skills as IT operations professionals must also change. Traditional mainframe and
mid-range systems coexist today with LANs (local area networks) and WANs (wide area
networks) that connect users’ PCs to each other and to these larger systems. Applications
systems operate on all these IT platforms and within a complex interconnected
environment, all of which you must manage and support. In addition, the Internet has
introduced new opportunities to increase business growth through direct communication

connectivity solutions with vendors, suppliers, and customers. IT must develop and
support the infrastructure for these complex business connectivity solutions by
connecting internal LANs and WANs to the Internet and, in some instances, directly to
internal networks of business partners and customers.
In this edition of the handbook, we provide a broader range of technology-operations
knowledge to help meet the information needs of today’s IT professional. The
information is presented with a practical orientation so that it can be readily applied to
your environment. Areas of coverage include:
• IT Management.
• Data Center Management.
• Application Infrastructure and Operations.
• Enterprise Network Management.
• Desktop Computing.
• Equipment Asset Management.
• Customer Support Operations.


Introduction

3

• Quality Control & Computer Security
• Contingency Planning.
Within the sections that existed in last year’s edition, more emphasis has been added to
network communications, end-user support operations, computer security, and
contingency planning. These areas require increasing attention from IT operations
personnel. The material focuses not only on the technology, but also on methodologies
for decision making. Knowing how to apply the knowledge in this handbook is critical to
your success as an IT operations management professional.
ADDRESSING ENTERPRISE BUSINESS SUPPORT

In the area of network communications, the handbook includes the topics which reflect
the explosion of new technologies now emerging in the marketplace. Networking has
always been a vital part of the overall IT operations solution; these emerging
technologies provide new opportunities for competitive advantage, delivering high-speed,
reliable service in support of network-based applications.
The help desk industry is one of the fastest growing areas in the IT operations area
today. End users are requiring growing levels of support as they become more
empowered to deliver technology-based services to customers and to meet the demands
of business partners and vendors. The help desk is an extremely important IT investment
and must constantly adapt to be responsive to ongoing technology changes, including
changes in how technology is used by end users. This handbook addresses these issues
and provides the IT operations manager with solutions to effectively manage this area.
As technology is pushed deeper into mainstream business operations, computer
security, quality assurance, and contingency planning become increasingly important.
Loss or failure of technology service operations can have a disastrous impact on business
operations. This edition of the handbook, once again, provides important guidance on
how the IT operations manager should protect this critical investment. IT management
should work closely with senior management to properly address these areas within the
appropriate business context.
THE FUTURE OF ENTERPRISE COMPUTING
As business organizations continue to increase their investment in technology to deliver
business products and services more cost-effectively, proper management of the
technology infrastructure becomes more critical to the success of the organization. Even
as traditional IT operations become more and more automated, new opportunities for IT
investment and increasing changes in the IT industry require organizations to react more
quickly to remain competitive. Business will always be dependent on technology and, as
a result, on someone to effectively manage IT operations. As we move into the next
century, this handbook will continue to be a valuable source of information to IT
operations management, providing important answers to increasingly complex IT issues.

Enterprise operations management: handbook

4

Steve Blanding
Houston, TX
April, 1999


Section I
IT Management
IT MANAGEMENT MUST CONTINUALLY CONFRONT a wide range of important
technology issues. You are required to possess multiple skills to meet these diverse and
pervasive challenges. This section of the handbook provides insight on how management
issues are addressed and solved within the IT profession. To effectively manage the IT
environment, management must be constantly focused on strategic planning, while
maintaining communications skills, analytic skills, and budget control.
Chapter 1, “Strategic Planning: Business and Technology Issues,” describes the
business and technology issues that must be considered when preparing a strategic
business plan. The plan must be developed in accordance with organizational goals and
ever-changing technology needs. IT management must continually focus on seeking ways
to more tightly integrate technology with the organization’s overall business plan. This
chapter relates the barriers and shortcomings most organizations face today in achieving
the benefits of effective strategic planning.
Another challenge facing IT management today is the effectiveness in negotiation with
senior business management for appropriate levels of IT support and services. Chapter 2,
“The Corporate Information and Communications Hierarchy: Technological
Management in Modern Enterprises,” presents various case studies of how the
technology infrastructure can most effectively be positioned within the organization as a

result of a threeway negotiation between the CIO, middle management, and senior
management. The author demonstrates in this chapter how this three-party struggle
contributes to the overall effectiveness of the enterprise.
Staffing an IT organization with highly technical individuals has been the traditional
requirement in mainframe application legacy environments. Today, however, IT
managers must hire individuals with a blend of technical and interpersonal skills. IT
personnel are increasingly having to interact with users on more levels than before, due to
the dramatic shift toward client/server application environments. Chapter 3, “Developing
People Skills: A New IT Priority,” addresses the important issue of interpersonal skill
development within the IT organization.
In some instances, you may need to hire professional consultants to provide the
organization with an expert perspective for a particular field of technology. Chapter 4,
“Professional Consulting: The Analysis Methodology,” provides a road map to
determining the appropriate expectation level when using professional consultants. This
chapter describes the difficulty in relying on the expertise of someone who is not on the
payroll, and is of unknown loyalty to the organization. The author describes the process
IT management should pursue to establish a realistic expectation level regarding the


Enterprise operations management : handbook

6

performance and deliverables of consultants. Using a case-study approach to illustrate
this point, a description of the steps necessary to determine the type of thoroughness and
in-depth analysis required when using professional consultants is drawn out.
IT management is also responsible for maintaining an efficient, cost-effective
technology environment. Demonstrating this in a complex network environment is a
challenging task. Chapter 5, “Pricing Methods Across Linked Networks,” shows you how
to implement a strategy to recover costs across linked networks and how to communicate

to senior management that the data center is more than a service bureau—it can be a
profit center, as well.


Chapter 1
Strategic Planning: Business and Technology
Issues
Layne C.Bradley
IN A RECENT SURVEY CONDUCTED BY A CHANGE MANAGEMENT
CONSULTING ORGANIZATION, 1500 chief executive officers indicated their second
most-pressing problem was the integration of technology into their companies. (Their
number-one problem was government regulation.)
The pace of technology development today is far ahead of most organizations’ ability
to implement it effectively. There are several reasons for this situation:
• Most organizations today are not structured to realize the true benefits of technology
and still cling to rigid management hierarchies that make implementing
organizationwide technologies very difficult. There is often too much focus on
departmental issues and goals rather than organizationwide goals.
• Even with the rapid growth of computer technology in the past few years, many
workers today are still intimidated by it. Whereas they may understand how to do a
few basic tasks at the computer—which they are often forced to learn to keep their
jobs—they have no real understanding of the technology, how it benefits them and the
organization, and how to use it to become even more productive.
• Lack of focus, understanding, and senior management support of longterm technology
projects often hampers the effective implementation of new technology. The cost, both
in time and money, often deters senior management from making the kinds of
investment commitments that are required. Also, many senior managers consider
computer technology to be a tool only for the organization’s workers rather than for
themselves in running the company. Consequently, they often delegate
0-8493-9824-X/00/$0.00+$.50

© 2000 by CRC Press LLC

the implementation of new technology to the information systems group without
enough of their own personal involvement.
• Finally, the lack of skilled systems professionals to plan, implement, and maintain
technology is becoming a significant problem. As the demand for new technology
grows, the demand for systems professionals is beginning to outstrip the supply. As
we enter the twenty-first century, however, it is becoming increasingly clear that
business and technology are beginning to merge into a single discipline. Rather than
merely being a part of the business, technology may very well become the business.
Given the increasing global nature of business, the use of technology may become the
only way a company can compete and survive.


Enterprise operations management : handbook

8

All of these issues have a direct impact on the data center manager. The data center still
serves as the focal point of merging technologies. Knowing how to manage these
technologies from a business perspective may become the single determining factor
governing the data center manager’s career success.
FACTORS EFFECTING CHANGE
Historically, the data center’s daily operations have been fast-moving, labor-intensive,
and highly focused. In the early days of business data processing, the data center
produced reports for the organization’s functional department in a batch environment.
The introduction of online systems has made life in the data center more demanding.
Data centers must now make several hours of online processing available to users and
still produce the required batch reports.
The data center environment has changed even more dramatically with the

introduction of local area networks (LANs), telecommunications, relational databases,
and microcomputers. The third-party software industry has helped improve the situation
by providing systems that automate a great deal of the manual work. Production control
and scheduling; tape and disk management; operator responses; network management;
and restartrerun operations are routinely automated. The logical and technical extension
of this approach is the concept of lights-out or unattended operations—that is, a data
center that functions with few, if any personnel, much like the automated automobile
factory.
The data center, however, is becoming much more than the central point where daily
production systems processing is conducted. Rather, it is rapidly becoming the hub of
technology for the organization it serves. The data center manager must become a
business person whose skills involve managing technology for business effectiveness
rather than merely a technical manager.
BUSINESS ISSUES
Industry journals, newspapers, and magazines frequently report on the business of data
processing. These articles address not only the financial aspects of data centers (e.g., cost
centers versus profit centers and return on investment), but also career issues, such as
how data center managers can become chief information officers (CIOs) and how CIOs
can eventually become chief executive officers (CEOs).
Discussions about the business of data processing have gone on for many years, yet
the issue is more relevant today than ever before. Because of the introduction of new
technology, new management techniques, global competition, and increasing cost
pressures, senior management must look closely at MIS’s role in the organization as it
seeks ways to tightly integrate these operations into the business.
Clearly, data center managers face the challenge of managing the data center as a
business, not merely as a cost center. In fact, many organizations are actually turning
their MIS capabilities and resources into separate businesses by offering services to
outside customers. Even organizations that continue to provide services only for internal

Strategic planning: business and technology issues

9

users are seeking ways to turn MIS into a profit center. Efforts to make the MIS
department more like a functional line of business have a clear and definite strategic
impact on the data center itself. If data center managers are to run the data center as a
business and more effectively integrate it into the organization, they must keep abreast of
several important business issues.
The Organization’s Goals
One of the most important, if not critical, changes data center managers must make is in
how they are seen in the organization. They simply cannot continue to operate, or be
perceived as, a purely technical manager. Senior management usually does not have the
time or the inclination to become highly knowledgeable of technology. Therefore, data
center managers must invest the effort to become knowledgeable business people who
can effectively communicate with senior management on their terms. Only in this way
can data center managers come to be perceived as an integral part of the organization’s
business management and, therefore, able to participate directly in setting the
organization’s goals. Then, they can set the data center’s goals in harmony with the
organization.
Becoming a skilled business person may be a challenging task for the data center
manager. It is no longer optional, however. In addition to learning the organization’s
specific business, it may be necessary to obtain a great deal of basic business training
through seminars, workshops, or enrollment in college courses—perhaps even obtaining
a degree in business. The task must be accomplished by whatever means necessary if the
data center manager is to become an effective part of the organization’s management
team.
Businesses become successful because they set and reach goals. Goals provide
direction, help identify obstacles and opportunities, and allow for the efficient allocation
of available resources. The data center must follow this same goal-setting process for its

own operations. The real key to managing the data center as a business, however, is
knowing the organization’s goals and understanding how the data center can help the
organization to attain them.
Unfortunately, this task is still often quite difficult because a communications gulf
exists between senior management and data center management—neither side effectively
understands the other side. Although this situation is beginning to change, it is a slow
process. Data center managers must take the lead in bridging this gap by proposing ways
for the data center to be included in the organization’s goal-setting process. If the data
center and its operations are to become a key business function of the organization as
well as assume a greater role in using technology to drive the business, this goal-setting
process must take place.
Expectations for the Data Center
Another major challenge for the data center manager is getting senior managers to define
their expectations for the data center. Most senior managers do not understand the real
role of the data center, and, therefore, their expectations for the data center are far
different than the data center manager’s. In fact, most data center managers would be


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startled by what they would hear if they were to ask their senior managers to define their
expectations for the data center. No matter how difficult this expectation-defining process
is, however, it must take place so data center managers know what is expected of them
and which direction the data center should take. Becoming perceived as a business
manager and becoming part of the organization’s management team helps this process
greatly.
Profit Center vs. Cost Center
The idea of making the data center a profit center is not new, but it is gaining much more

credibility as a real option. A cost center recognizes expenses used for conducting
operations. It usually falls into the overhead category of the corporate budget and its costs
are in some way allocated across all user departments. A profit center, however,
recognizes revenue for its services, as well as expenses, and attempts to show a profit. A
data center manager can take one of three approaches to accomplish this goal.
The first is to accept only internal revenue. The data center charges service fees to all
the organization’s internal users. These fees can be structured in a variety of ways
depending on the organization’s goals. At times, these fees may be strictly arbitrary,
though more organizations are directing their data center to charge true market rates. Data
center managers are then held responsible for managing data center operations to produce
a profit. Many times this approach results in the downsizing and streamlining of data
center operations, which allows data center managers to eliminate a great deal of the
expenses that limit their center’s profit margin.
The second approach is for data center managers to consider providing services to
users outside the organization on a contractual basis. In this case, the data center, which is
usually part of the larger MIS department, becomes a true business. This approach is
feasible if there is sufficient demand for services and the data center has the processing
resources, personnel, and management talent to implement such a business. Contracting
for business can be a risky proposition, though some organizations have created
successful information systems subsidiaries.
The third approach combines the first two approaches. The data center provides
services on a for-profit basis for both internal and outside customers.
Outsourcing
Some organizations are selecting outsourcing as an option for their MIS operations.
Under this arrangement, the organization signs a contract with a third-party vendor to
take over responsibility for running the MIS operation. Usually, only the actual computer
operations are involved, but there have been instances of organizations that have
outsourced the management of their network and even their applications development.
The organization’s employees usually become employees of the third-party vendor.
This new approach could have a major impact on data center managers. In some cases,

organizations obtain bids from outsourcing vendors and, at the same time, ask their data
center managers to write a bid for providing computer services. In other words, data
center managers must justify the cost-effectiveness of continuing the operation in-house.


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11

This situation is purely a business one—senior management is looking for the best return
on its data processing dollar, and outsourcing must be considered an option.
Outsourcing is controversial. However, a large number of organizations have pursued
it, with varying results. Nonetheless, it is a business issue that data center managers must
be aware of when preparing a strategic plan for the data center.
TECHNOLOGY ISSUES
It has been said that the only constant is change, and that observation rings true in the
MIS field. Since its beginning, MIS has been in a constant state of flux brought about by
new hardware and software developments. Identifying, planning for, acquiring, and
integrating technology is part of the data center manager’s function—and it must be
accomplished as costeffectively as possible and perhaps even on a profit basis. Although
the MIS department has never been afforded free spending, it is being scrutinized as
never before by senior management. The primary goal today, then, is to decide the best
way to use technology so it enhances the organization’s operations, improves its
competitive position, and increases its profit margins. Gaining greater economic leverage
is, after all, the reason for creating a business-oriented data center.
Deciding what technology is appropriate and how best to use it is the real challenge
for data center managers. Because very few organizations have the financial resources or
the need to incorporate all current technology, data center managers must look at what
makes sense for their organizations. Strategic planning involves recognizing current
needs as well as future requirements. Identifying the need for more central processing

unit power, disk storage, and terminals is clearly part of a strategic plan, but capacity
planning alone is not enough.
For example, an organization has a centralized manufacturing facility that is served by
a centralized data center. In an effort to expand and remain competitive, the organization
is considering creating several smaller manufacturing facilities that will produce the
product locally and get it to the market faster. Adding more CPU power centrally may not
be the appropriate solution. Instead, a distributed network of smaller, fault-tolerant
systems may be needed. This is a strategic issue because it represents a major change
from the current approach and commits the organization to an entirely new long-term
direction.
This example illustrates how business and technology issues demand that the data
center manager be very knowledgeable—not only about the data center’s capabilities and
goals, but also about the direction in which the organization itself is heading, and its
management philosophies and goals. To effectively support the organization’s changed
business strategy, data center managers must know the business issues—for example,
how the change will affect the organization’s goals and the projected time frame for the
change. For the organization to be successful, from the technology point of view, data
center managers may have to plan for and implement a technology entirely new to the
organization. Failure to introduce new technology has seriously hurt or even eliminated
organizations over the years.
Strategic planning in the data center is intended to be a process whereby data center
managers can be involved as early as possible in the organization’s long-term goals and


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know how current technology relates to those goals and what new technology will be
required in the future to make it all happen. Some of the information technologies data

center managers should consider when developing a strategic plan include:
• Supercomputers, mainframes, minicomputers, microcomputers, workstations, and
portable computers.
• Optical storage.
• Fault-tolerant systems.
• LANs.
• Integrated services digital networks.
• Fiber-optics.
• T1 networks.
• Vector processes.
• Artificial intelligence and expert system.
• Databases (relational and object oriented).
• Fourth-generation languages.
• Computer-aided software engineering (CASE) development environment.
• Operating systems.
• X-terminals.
• Image processing.
• Executive information systems.
• Voice response systems.
• Videoconferencing.
• Cellular technologies.
• Wireless communications.
The data center’s strategic plan must also address organizational issues. Personal
computing, departmental computing, and distributed processing have changed the way
work is processed in the organization. Likewise, business issues are going to affect how
work is performed in the data center. Major business organizational issues about which
the data center manager must stay informed include: outsourcing; downsizing; mergers
and acquisitions; union contracts; unattended operations; telecommuting; and reporting
structures.
THE BUSINESS PLAN

In the language of business today, the strategic plan is more commonly referred to as the
business plan. Most successful organizations operate from a business plan. Depending on
the organization’s size and management philosophy, such plans can be very informal or
extremely complex and may cover as little as one year or many years. To succeed in the
long term, an organization must have a directive as to where it is going, how long it will
take to get there, and how it must allocate its resources. If data centers are to be run as
businesses, they must also have such a plan. The business plan is where the data center
manager combines the business issues and the technology issues discussed in this
chapter.


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There are as many types and formats for business plans as there are businesses. Each
organization has its own style. There are, however, some common elements that all data
center managers should include in their business plans:
• A statement of purpose.
• An executive summary.
• Goals.
• Objectives.
• Strategies.
• A cost/benefit analysis.
• A description of the hardware and software configuration.
• A description of the network configuration.
• Organizational charts and staffing plan.
• Budgets.
• Milestones and target dates.
When preparing the business plan, data center managers must remember that they are not

simply preparing a budget for the coming year. Rather, they are attempting to present the
data center as a business that can be run efficiently and cost effectively. Creating a data
center business plan is actually a straightforward process that begins by answering the
following questions:
• What are the business goals that senior management wants to achieve?
• Are there enough resources to achieve these goals?
• What is the best way to allocate available resources to achieve these goals?
• What are the steps involved?
• What is the projected time frame for the goals to be achieved?
• Who is responsible for this task?
• What are the costs involved?
• What is the projected return on investment?
RECOMMENDED COURSE OF ACTION
Planning of any kind is always difficult when dealing with unknown factors, some of
which managers control to only a small degree. Long-range or strategic planning is
extremely difficult because the longer the planning horizon, the more uncertainty exists.
Today more than ever, data center managers are required to do long-range business
planning for the data center. To do this effectively, data center managers must: