AdvantageBMB, our proprietary systems methodology
When used during a new systems project, AdvantageBMB ensures the delivery of maximum business value. In addition, AdvantageBMB minimizes both the soft development costs and the hard cost of ownership of systems assets. Finally, it enables users to gain control over the entire development process.
Introduction
AdvantageBMB brings structure, discipline, consistency, and more effective management to the system development process. It is a practical refinement of the methods and practices that we have used to deliver business solutions for over one hundred clients during the past fifteen years. Currently, AdvantageBMB is used to manage thousands of desktop and mobile PC's networks, to develop mission-critical applications for clients in industries such as manufacturing, financial services, pharmaceuticals, distribution, and retail.
AdvantageBMB is a proven set of standards, services, and custom software tools that yield cost-effective and flexible solutions directly linked to a client's business strategy. AdvantageBMB allows business users and BMB Associates staff--both those at the client-site and technical and functional specialists brought in to help---to work as an integrated team.
Throughout the development process, business users review progress and set priorities among concurrent projects. Business users are involved during the entire process and take ownership of new systems after exhaustive user testing and training.
Objectives and Methodology
The objectives of AdvantageBMB include:
- Re-casts the information technology (IT) function as a business service
Instead of a series of haphazard exercises in technical problem solving.
- Focuses on the delivery of business benefits.
- Delivers a consistent level of service within predictable timeframes.
- Promotes anticipation of business needs rather than reaction of technical problems.
- Builds internal consensus. Business users own system solutions and set priorities for new projects on a weekly basis.
- Uses the most appropriate technology to deliver maximum business value.
- Contributes to lower-than-industry-average turnover of our staff. They are trained in our methodology and have worked within it as part of a team at other client sites. Technical and functional specialists can come on site and immediately contribute as a part of the on-site team.
- Builds and implements systems based on a standard open systems architecture which delivers solutions that are cost-effective and flexible enough to meet changing business needs.
Business Benefits
AdvantageBMB focuses on delivering business benefits. Specifically, AdvantageBMB
- Reduces the lifecycle development costs of application software.
- Reduces the total cost of ownership (TCO) of computer systems.
- Formalizes communication with users which builds internal consensus and encourages users to buy into and own the systems that are developed.
- Reduces corporate risk from business disruption because all procedures are documented and practiced.
- Unburdens business executives from managing the information technology function and lets them focus on their business.
Reduces development and support costs
Typically, a firm with 100 employees (30-75 computer users) has from two to four internal IT staff. These people support current users as well as undertake new system development projects. BMB Associates, by using AdvantageBMB, would run the IT function with one person on site. Here is a cost comparison.
Annual Cost Comparison
Cost
Component
Internal
Team
BMB
Team
Salary/Cost
Benefits
Total
Total
Salaries/Benefits
IT Manager
$80,000
$16,000
$96,000
$140,400
Support #1
$54,000
$10,800
$64,800
N/A
Total People Costs
$134,000
$26,800
$160,800
$140,400
Other
Costs
Outside consultants
$50,000
N/A
Recruiting
$15,000
N/A
Education & Training
$10,000
N/A
Total
Other Costs
$75,000
Total
Costs
$209,000
$26,800
$235,800
$140,000
Net
Savings
$95,400
Improved
Productivity
$0
$0
$200,000
TOTAL
SAVINGS
$295,400
Assumptions:
- Benefits: Client’s employees receive benefits equal to 20% of their salary.
- Recruiting: Client will need to recruit/replace one IT employee annually at a cost of 25% of base salary (hiring fees, advertising, training, etc.)
- Productivity: Each Client employee generates $100,000 of annual revenue. Each of Client’s 100 employees generate 2% more revenue from increased IT productivity. Typical industry productivity improvement is 2% to 10%. Increased productivity results from the quicker implementation of new, more effective systems, reduced downtime, and better management of hardware investments.
Reduces Total Cost of Ownership
Beginning in the mid 1990s, The Gartner Group began to prompted the concept of Total Cost of Ownership (TCO) for computer systems. In addition to the purchase price, TCO includes additional direct and indirect costs required for purchasing, installing, operating, maintaining, and servicing computer systems. In 1998, Gartner’s research showed that the cost per PC over its life ranges from $3,000 to $25,000, depending on the company’s computing environment. The average TCO for desktop PCs was about $10,000; 80 percent of that amount was for support. The TCO for mobile notebook PCs was about 20 percent higher.
While the purchase price of PCs continue to decline, overall support costs, and thus TCO, are rising. AdvantageBMB reduces TCO by reducing support costs. Support costs are reduced by:
- Standardizing desktop hardware and software to the extent that the business allows;
- Installing desktop software through electronic software distribution, ensuring consistent software installation and eliminating the need to physically install software on each computer;
- Using automated technical support tools to reduce support personnel staff.
A word of caution: TCO is only one-half of the question. It does not address business benefits delivered. Therefore, reducing TCO while not delivering intended business benefits will reduce, not increases, the return on investment (RIO) in computer systems.
Reduced TCO: An example
A typical IT department requires one desktop support person for every 35-50 users. Using AdvantageBMB, BMB Associates requires one support person for every 75-100 users. Assuming that support represents 80 percent of the TCO, BMB Associates can reduce a typical TCO by 30-40 percent.
Or, looking at it another way, one BMB Associates desktop support person can replace two existing internal staff—two can replace three to four internal staff.
Increases user’s control
Most larger firms have outsourced all or part of their information technology (IT) function. Some smaller firms hesitate to outsource because they believe that they would lose control. AdvantageBMB actually increases user control over IT.
Control Issue
Internal Hire
Outsourcing Firm
Relationship
Personality-driven
Can negotiate, fully specify, and contract for up
front. Relationship is more objective and easier to manage
Motivation
Career, technology, grow organization
Firm only wants to satisfy client and be profitable
Technology
Only wants to work with leading edge technologies
Uses whatever technology provides the greatest business
value
Personal effort and productivity
Varies by individual. Hard to predict during
interviews
Firm's staff have financial incentives to work more hours
and meet commitments
Organization
Status derived from increasing size of department
Gets paid a fixed
price; motivated to be efficient
Recruiting
In this tight job
market, costs can be 15%-33% of salary and required every time someone
leaves
Firm responsible
for recruiting
Retention
In this tight job
market, may have to pay a market premium to retain. Great disruption
when someone quits
Firm committed to a
long-term agreement at a fixed price. Firm is financially motivated
to renew agreement
Breadth of skills
and knowledge
Can't find one
individual with technology, applications, and network skills. No
back-up of individuals. Forced to contract for additional third
party services.
Access to large
pool of skilled people. Firm has experience with many similar
clients.
Methodology and
management
None
Firm has standard
methodologies to deliver business value. Firm involves executives
with 25-30 years of management experience.
BMB
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