Guide » Step 3: Analyse your Model » Be Happy with the Baseline

Be Happy with the Baseline

Once you've entered information about your ICT spend (capital and operating costs) you should sanity check that against your actual budgets.  The easiest way to check this is with the Cashflow Model ool.  You can also check the various costs you've applied using the Cost Profile tool. 

Here's some common errors we see in modeling and how to avoid them.

Be Sure about the Scope

You need to draw a line around what you'll model.  For instance you might decide not to include executive or managemetn salaries.  You might also not include facilities charges since the business doesn't charge them to each department.  Its useful to think about the costs that are "operational" meaning those that have a direct influence on the cost of delivery of service.  The purpose of cloudstep after all is to understand the costs of migration and change in the ICT environment.  Costs that are relevant to service delivery that may be reflected on the other side are important.

Make sure you don't double count

A Cost can be applied to many different elements (Applications, Implementations and Infrastructure).  But it might be applied wrongly more than once.  For instance if you have a licensing cost for SQL Server and you apply it to the physical SQL Servers and to the Virtual SQL Servers then you may end up paying too much for SQL licensing and throw your numbers out.  SQL licensing is a good example here since it is an expensive resource and is usually applied to hardware allowing virtual machines based on that physical hardware to be created without a need for licensing.

Useful Tools: Cost Breakdown, Cost Profile

Make Sure Costs don't end too late or too early

cloudstep is modelled based on the hierarchical relationship between elements and how long those elements are present in the model.  An element that lasts for 5 years in the model with an operational cost of $2000/m will cost $120,000.  Lets say this element represents a managed services cost.  Once you've moved all the infrastructure to the cloud, does this still need to be there?  You could apply a Tombstone to this element six months after the last migration saving two years of cost ($48,000).

Useful Tools: Cashflow Model, Cost Profile 

Its a big model made up of little bits

When you look at the model it seems daunting.  Even when you're getting started with a simple model it seems to gain dozens or hundreds of lines of costs in the Cashflow Model and even more when download that as Excel.  The best thing to do is look at it bit by bit.  Take some time to explore around the model, looking at VMs, Apps, Costs and other infrastructure.  Get a feel for the model as a whole in order to understand it piece by piece.

Useful Tools: Cashfow Model, Explorers

Small changes can have big impacts

Its also important to understand that a small change can have a big impact on the overall model.  If you add a 2x FTE cost to a Production ESX Environment element for instance, you'll be adding maybe $25k of cost per month.  this will add up over the five year model to blow numbers out of the water.  Look for the big ticket items in the Cashflow Model.

Useful Tools: Comparisson Tool, Cashflow Model, Cost Profile