Forrester Consulting assesses the costs and benefits of IBM i
June 7, 2021
IBM i supporters often cite the platform’s low cost of ownership, integrated nature, and self-management features as key advantages over competing systems. In an attempt to put real data behind these claims, IBM commissioned Forrester Consulting, which recently presented its findings in a report titled “The Total Economic Impact of IBM i.”
To understand the unique financial characteristics of the IBM i server, Forrester Consulting, which is an offshoot of the leading technology analyst firm called Forrester Research based in Cambridge, Massachusetts, interviewed four current users of the system. He collected data on the relative costs and benefits of using IBM i compared to the IT systems that came before it in each of these companies, as well as data on the flexibility and risks inherent in these systems. . He then combined the data into a single composite view. Forrester Consulting calls this its Total Economic Impact Methodology, or TEI.
Participants in the study included a European Union-based transportation and logistics management company with 150,000 full-time equivalent (FTE) employees and annual sales of $ 24 billion; a US-based manufacturer / retailer with 5,000 FTEs and sales of $ 2 billion per year; a county government in the United States with 1,400 FTEs and $ 500 million in annual revenues; and a UK-based manufacturer with 100 FTEs and $ 20 million in annual sales.
Prior to adopting the IBM i platform, organizations struggled with their IT systems and experienced business interruptions due to unplanned downtime, Forrester Consulting wrote in its report. They had to employ additional workers to make the various siled systems communicate with each other. And their employees have spent thousands of hours managing manual tasks, such as billing, data backup, and document imaging.
Forrester Consulting collected data related to these variables from IBM i customers and then built a composite company as part of its TEI framework. This composites company is an American manufacturer that sells its products direct to consumers and also operates its own customer support and service / warranty business. It has $ 100 million in annual sales, two factories, two distribution centers, 15 retail stores (split between the US and the EU), an online storefront and 5 million customers, according to the report.
As you would expect, this composite company manages an integrated ERP system, as well as other service applications. The applications run on an imaginary eight-core Power Systems S924, which has a non-imaginary price tag of around $ 74,000, along with a license fee of $ 295,000 for the system and application software, and maintenance fees. monthly payments of $ 168. In total, the three-year costs for the imaginary company are $ 348,000, says Forrester Consulting in its report.
Now for the benefits. Due to the integrated nature of IBM i and its relative stability, some costs that businesses would incur on other platforms are lower on IBM i. According to Forrester Consulting, reducing system downtime results in savings of approximately $ 530,000, reducing technical support costs saves the composite company $ 255,000, and improving staff productivity. employees adds about $ 158,000 to the IBM i side of the virtual ledger. These figures are totals over a three-year period.
All told, when you add up the savings, the IBM Composite Store i recorded a profit of $ 943,000 versus a cost of $ 348,000 over three years, which leads to a net present value (NPV) of $ 595,000. . The return on investment (ROI), meanwhile, stands at 171%, with an eight-month payback period (see Figure 1).
“IBM i is an environment that integrates an operating system with the database, virtualization layer, application server and transactional system,” the authors of Forrester Consulting wrote in the report summary. “The reliability and security of this environment allows organizations to reduce system downtime and administrative support costs, as well as improve the productivity of front-line workers.
In addition to the quantitative analysis of the composite client using the TEI approach (which Forrester Consulting explains in detail at the end of the 18-page report), the consulting group also provided some qualitative statements from IT managers and of executives they interviewed at current IBM i stores. If you’ve been on the platform for a while, these will likely strike a chord.
“I would say the biggest advantage of IBM i is basically that it doesn’t crash,” said a senior systems specialist at the EU-based logistics company. “It’s the biggest real capacity that business colleagues on other platforms value the most. What we have seen is that these systems are very stable. For critical operations requiring very high availability, we opt for IBM i.
“If we can do it on this system, we have to do it on this system and not look to others, period,” said a vice president of operations for a retail company. “And there isn’t much. I mean we do imaging on this system. We provide printing service on this system.
“Because the database is integrated with the operating system, it allows the administrator to manage the database with reorganizations and table sizes,” said the IT engineering supervisor of the manufacturer / retailer based in Canada. United States. “The admin is really working with the developers to develop a strategy for how things are handled with data. On the other systems side, it looks like you buy licenses individually. It starts to get out of hand and hard to manage in these environments where licensing is ubiquitous and you get charged for this and that. In our company, we do not have a DBA so it is the administrator who manages the database.
This is not the first time that IBM has attempted to quantify the benefits of IBM i. Every few years IBM commissions reports like this. But this one is interesting because it is the first time that he has used Forrester Consulting and its innovative TEI framework, which provides clarity in the calculation of technological benefits, which is not always easy.
You can access the Forrester Consulting report at www.ibm.com/downloads/cas/1ZLRK39P.
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