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Analyzing Company Business Strategies

Analyze factors that influence company strategies.

The purpose of any network infrastructure is to help the business perform its day-to-day activities and meet its objectives with the greatest efficiency. The day-to-day activities that must be performed will vary depending on the company's business strategies. Consequently, the role of the network and the demands placed on the network infrastructure will vary as well.

When creating a network infrastructure design, it is important that you have an understanding of the company's business strategies and the factors that influence those strategies. Microsoft lists the following factors in its objectives for this exam:

  • Identify company priorities

  • Identify the projected growth and growth strategy

  • Identify relevant laws and regulations

  • Identify the company's tolerance for risk

  • Identify the total cost of operations

Each of these factors will be discussed in the following sections.

Identifying Company Priorities

Designing a network infrastructure that delivers everything imaginable all the time is an impossible task. In any design project, compromises must be made. How will you determine what compromises to make in your design? You must determine which network resources align with the company's business priorities.

Meet with senior management to determine the company's priorities. Document all the business's goals, and assign a priority number to each one. You might find that several goals share the same priority. This is acceptable at this point in the design process. You need not assign a unique priority number to each of the business goals on your list. You merely need to gain some understanding of the relative priority of each goal in terms of each of the other goals.

Once you have assigned a priority level to each of the business goals, you will be able to determine if any conflicts might arise when you're trying to deliver computing services for each of the company's goals. When these conflicts occur, refer to the priority level of each of the items that are in conflict. Goals with higher priority levels get built into the design first. Goals with lower priority values are included in the design only if they can be delivered after goals at the higher priority levels have been satisfied. Always remember that the reason for an effective IT infrastructure is to help the company achieve its goals in the marketplace.

Identifying the Projected Growth and Growth Strategy

One of the most important things to do once you have identified the business requirements and priorities is to understand not only the company's projected growth, but also the company's strategy for achieving those projections. For example, let's say your company's present revenue is one million dollars a year, and you have 100 employees. The company's target for the next year is to achieve a 40 percent growth in revenue and a 20 percent growth in headcount. It is easy to do the math and figure out that you are going to have twenty additional people on the network, and so you need to include that much additional capacity in your one-year network plan. That was easy, wasn't it? Well, hang on just a minute. What the company president neglected to mention was the 40 percent growth in revenue is going to be primarily achieved through an active e-commerce site, which he expects you to maintain internally. Suddenly you need a redundant Web server design and a highly redundant, high capacity Internet connection. And firewalls, security audits, and a host of other things you never thought of.

Then there is the other side of the equation. What if the company president tells you to plan for 300 percent growth in employees and a Web site that is going to receive a million hits a day? You go and spend $500,000 building an infrastructure to support the president's vision. In three years, you have added 20 percent to your headcount, and then they decided that the e-commerce thing wasn't for them. When someone comes looking to see why you spent that money, you are going to need more justification than "Well, you told me we were going to need it." Although we certainly can't cover the detailed analysis of a business's growth in this training guide, we can discuss some of the things you will need to take into account as you start planning for company growth and its impact on the network infrastructure design.

The first thing you need to keep in mind when dealing with growth projections is the fact that it is just that—a projection. You can think of it as a "best guess" (for want of a better term). You need to ensure that your design includes enough flexibility to encompass bad projections. You may need to spend money to meet the reality, but you need to be sure that you are not locking yourself into an architecture that isn't flexible. For example, let's say you have a small office with a single file and print server. When you bought the server, there were 20 users, and you filled all three drive bays with 2GB drives and were ready to go. Then they hired 20 more people, and you were out of drive space. If you had planned appropriately, you might have selected larger drives, or you might have selected a server model that had more than three drive bays so that you could add capacity if needed. While this is a simple example, it gives you an idea of what to look for.

When you start looking at trying to project a company's growth, you need to realize that you will need input from the same business managers that identified the priorities in the last section. It is rare that a network planner or architect will be able to project the company's growth from the facts generally available to them. Make sure you involve the right people so that your projections, or your interpretations of existing projections, are as accurate as possible.

Once you have identified the correct resources, it is time to dive into the projections and then the planning. To establish accurate growth projections, you will want to look at recent trends and future planned business events as they apply to the company's growth and ask a number of questions. Here are some things you will want to determine:

  • What growth rate has the company projected for the next year? The next three years? The next five years? The first thing you should try to discover is where the senior management of the company thinks the growth will be. Be sure to really delve into the projections. Just knowing the company is going to grow 30 percent isn't going to help your planning much if the growth is projected for a new office in Kuala Lumpur. Try to make sure that you have enough information to apply the projections to your computing architecture.

  • How much has the company grown in the past quarter? You should be looking for information not only on revenue, but also on employees, services, locations, customers, and anything else that may be important. If they added an additional 10,000 square feet to the manufacturing plant, that is important information for you if that space requires network infrastructure. Will it be growing again in the next quarter?

  • How much has it grown in the past year? You want to get the same information as above, but by going out to a year, you should be able to detect any trends in the company's growth patterns.

  • Has the company been meeting its growth projections? If you work for a company that is able to predict its growth accurately (as rare as that generally is) it is important to know. If the company had been "dead on" with projection for the last 37 quarters, you can be pretty confident in your projections. If they continually miss the goal, you know to take the projections with a little common sense and plan appropriately.

  • How does the company plan to achieve this growth? This is especially key to your planning. If the company plans to meet its goals by acquisitions, you can expect to be spending a lot of time working on integrating disparate network and systems architectures. You need to be able to ensure that your infrastructure is flexible enough to handle acquisitions. You should also make sure that a member of the IT Department is included in any acquisition or divestiture plans—to ensure you can meet the requirements. There is nothing worse than coming into the office and discovering that you have until Friday to add 1000 users to your Exchange servers because you bought a company last Friday, and the CEO wants all the employees on the same mail system ASAP.

  • One thing that is frequently overlooked is the question, "Where will the growth be?" If you are an international company or are planning on becoming an international company, you have an entirely new set of issues to deal with, including language, available infrastructure in the country (or countries) where the growth will take place, and finding employees.

Company growth affects the demands placed on a network infrastructure in many ways. For example, the addition of new employees to the company means an increase in the number of workstations on the network and an increase in the demand for information to be carried by the network. An increase in network requests translates directly into an increased need for bandwidth. If the company expands into new markets, this might mean the addition of remote sites and campuses, placing new demands on and requiring the expansion of the Wide Area Network. If the company plans to grow by expanding its customer base through online sales, new technologies will have to be added to the network infrastructure and integrated with the existing technologies.

A company's growth plans might include extending operations into new locations. This might mean that the company will extend its geographic scope to the point that it might need to employ a different business model. For example, a U.S. company might expand its operations by building new locations overseas. This would move the company from a National to an International business model.

Following is a list of a couple of things that you should make sure you take into account as you plan for company growth:

  • Make sure your network infrastructure is upgradeable. In a WAN environment, that means making sure you can add additional T1 lines or increase the bandwidth of existing connections as needed. This includes servers, routers, hubs, and any other computing resources in your environment. Using "maxed" equipment is seldom a good idea (unless there is a large amount of excess capacity).

  • Make sure that management understands that you need this information for two reasons: to plan the initial design and for ongoing capacity planning. If the projections change and you are not told, you could find yourself in a tight spot when the new plans come to fruition.

  • Make sure someone from IT is involved in any acquisitions or divestitures. It is all too frequent for senior management to acquire a company only to find out that the systems or networks are not compatible. Planning for acquisitions and divestitures is one of the most challenging facets of growth projections and capacity planning.

Keep in mind these are general guidelines that will need to be applied to your environment as necessary. But by using the methods as a guideline, you should be able to make some excellent projections of company growth and ensure that your network design can handle the load.

Identifying the Relevant Laws and Regulations

Sometimes the operation of a particular business is governed by only a few relevant laws or regulations. Other businesses, however, must adhere to a very complex and strict set of laws and regulations. Financial organizations are an example of such a business. As a business's territory expands, it finds itself governed not only by the laws and regulations local to its company headquarters, but also by laws and regulations that are local to each of its remote offices. International organizations are another good example of businesses that need to adhere to complex and strict laws and regulations.

You might not be able to (or need to) become intimately familiar with all the laws and regulations that are applicable to any given business. This is the job of an attorney, or sometimes a team of attorneys. However, you should work closely with the company's legal department to become aware of any laws and regulations that are pertinent to the network infrastructure design.

Certain areas might have regulations governing the type of wire you can use for your network and the way wiring must be installed. Certain areas have regulations regarding the frequencies and locations of any wireless communication devices you might be planning to use. In addition to the physical components of the network, you might also face regulations regarding the software you choose. For example, if you purchase high-encryption software in the United States, you most likely will not be able to export that software to international locations outside the U.S. High-encryption software is considered a form of munition by the Unites States government. Another example might be a drug company that is dealing with regulated chemical compounds. The FDA needs to know who has access to those formulas. This means that the network designer needs to ensure that the implemented infrastructure supports limiting access to certain users and auditing the nature of the access to certain resources. These features will need to be built into the network infrastructure design to ensure that the company is compliant with FDA regulations.

Partnering with the company's legal team can help make you aware of any legal issues that might apply to your project. This will allow you to take advantage of their expertise in dealing with these issues.

Identifying the Company's Tolerance for Risk

Anytime you design something as mission-critical as a network infrastructure, you must be acutely aware of the risks that are involved in implementing your design. Windows 2000 has been designed to be implemented incrementally, reducing the overall risk associated with the deployment of a Windows 2000 network infrastructure, but there are still risks involved. Knowing up front the company's position and tolerance for risk can help you avoid serious problems as the design and implementation processes unfold. A good plan for managing the risks involved, created at the design phase, can help avoid rejection of the project when it comes time to start the implementation phase.

The first step in creating a risk management plan is to conduct a risk assessment. The risk assessment will identify the risk factors that might affect the project and allow you to develop contingency plans to deal with those factors if they arise, or to prevent them from arising in the first place. The goal of an effective risk management plan is to eliminate risk factors if possible and to minimize the consequences of risk factors that cannot be eliminated.

You should consider creating a risk assessment matrix that includes the following information:

  • The risk factor.

  • The probability that the risk factor will actually occur.

  • The impact on the project that the risk factor carries.

  • Which department or group is responsible for this risk area?

  • What strategy can be employed to mitigate this risk factor?

Risk management should become part of your design and should be kept up to date as your design evolves. Risk management will need to be carried out effectively by the implementation team(s) when your design is finally complete and accepted by company management.

When attempting to identify risk factors to consider in your network infrastructure design, keep in mind that soliciting input from company employees might be difficult. Most companies lack an environment that encourages employees to identify risks. Often an employee who points out risk factors is thought of as a naysayer or is not considered a team player. Other companies actually reward employees who identify risk factors and develop solutions to the problems presented by these factors. In most cases, however, this situation does not exist. Try to overcome the difficulties that identifying risk factors will present. Encourage the company's employees to share their thoughts regarding risk factors for your project, and assist in developing solutions to those problems. Your design will benefit tremendously from this input.

Identifying the Total Cost of Ownership

It is not always obvious how much a network infrastructure really costs. Beyond the purchase price of each component, many other costs are incurred over the life cycle of a network infrastructure. The aggregation of all these costs is referred to as the Total Cost of Ownership (TCO).

Consider the cost associated with putting one computer workstation on the network. Initially, there is the purchase price of the computer, the monitor, and the network cable to connect it to the LAN. There is also the cost of the electricity that powers the computer. There is also the cost of the operating system and licensing all the applications software that is installed on the computer. Of course, this leads to the labor cost that must be paid to the person who installs the operating system and applications software. Once the computer is ready for use, costs are incurred simply by using the computer.

The user might want to access resources on the Internet; this leads to the cost of an Internet connection. If the user wants to print any documents from this computer, another list of costs is incurred: purchase of a printer, printer cables, paper, and toner, and the electricity to operate the printer. There are many other costs to include, ranging from the environmental design, desk, chair, and lighting to the total training of the user population.

What if the user has a problem with the software or hardware? There are support costs for troubleshooting problems and repairing the system. At this point, you can begin to understand how a single network device can lead to a long list of costs and that the sum of these costs can be very large. Now, consider the scope of your network infrastructure design project. How many users will you need to support? 500? 1,000? 10,000? As the scope of your project expands, so do the associated costs. You can see that the Total Cost of Ownership for a large network infrastructure can be astronomical.

A major goal for a network infrastructure design project is to help reduce the Total Cost of Ownership for the company in the area of Information Technology.

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