Unified Messaging at Williams College

A Cost Model AnalysisBy Mark Berman

Copyright Mark Berman, 2002. This work is the intellectual propertyof the author. Permission is granted for this material to be sharedfor non-commercial, educational purposes, provided that this copyrightstatement appears on the reproduced materials and notice is given thatthe copying is by permission of the author. To disseminate otherwiseor to republish requires written permission from the author

The Background Williams College is an elite Liberal

Arts College E-mail has been in use ubiquitously

since 1991 Voicemail was introduced in 1996 E-mail is used regularly by all

students, faculty and administrative staff

Voicemail is not as widely used

The System Avaya Communications is the vendor

for the Octel voicemail system They recommend a third-party

solution called “Message Bridge” Message Bridge will pass messages

from the Octel system to any standards compliant e-mail server

TechnoTrivia A required upgrade to the Octel

system will allow FAX reception in voicemail

The Message Bridge converts audio messages to .WAV and FAX messages to .TIFF

Any multimedia capable computer can receive, store, edit, forward, or include these messages in other documents

Added Value The ability to receive FAX will

reduce need for FAX machines on campus

Metcalfe’s Law states that the value of a network is equal to the square of the number of users

What is Modeling A model is a simulation or

representation of an object or process

Physical networks or computing equipment can be usefully modeled, check out Opnet: WWW.OPNET.COM

What is Cost Modeling? Costing is the allocation of

expenses and benefits associated with a system or project

A cost model is a system of static, variable, and probable costs and benefits presented in an understandable way

Types of Costs Past and Future Costs Sunk Costs Direct (parts/labor) and Indirect Costs Fixed and Variable Costs Long-run and Short-run Costs Unit Costs

$Walljack=$Network/#Drops

Valuing Benefits Difficult in Higher Ed Utilization Measures and Projections Cost Avoidance Cost Recovery Competitive Factors Metcalfe’s Law:

The Value of a Network = #users2

The Modeling Process A Life Cycle model was used The following steps were followed:

Define Requirements Describe the System Life-Cycle and identify activities

in each phase Develop a Cost Breakdown Structure Establish/Estimate costs for each activity Develop a cost model using Analytica Identify Benefits and Drawbacks & assign Values Evaluate the Cost Model and make a

recommendation

The Cost Breakdown Structure

M es s age BridgeL ife C yc le C os t Brea k dow n

B en efitsIn c reased N etw ork V a lu e

P er M etca lfe 's L aw

S oftw are p rice

H ard w are p rice

S ys tem D es ig n

D ata co llec tion

P u rch asean d p re -in s ta lla t ion

d es ig n

H ard w are in s ta ll

S o ftw are in s ta ll

In it ia l d a ta en try

N etw ork ad d ress in gan d se tu p

Tra in in g o fsu p p ort p erson n e l

In teg ra tionin to exis t in g d irec to ry

sys tem s

In s ta lla t ionse tu p an d con fig

H e lp D esk

D ata en try

S ys tem A d m in is tra tion

S ys tem C ap ac ityU p g rad es

N etw orkU tiliza tion

N etw orkP rob lem R eso lu tion

In c rem en ta lload on e -m a il s ys tem

O n g o in gO p era tion s

D ecom m iss ion in gan d d isp osa l

R etirem en tan d D ecom iss ion

L ife C yc leC os t

E con om ic F ac to rsB en efits /C os ts

To ta l S ys tem V a lu e

Variable Definitions Basic Purchase price (Hdwr & Sftwr) Installation & Configuration Integration with existing systems Data Entry Training and Support Systems Administration Network and E-mail system impact Maintenance & Support Retirement and Decommissioning

The Model

Results 

Statistic Result

Min $150,200

Median $159,500

Mean $159,500

Max $168,300

Std. Dev. 3659 

Analysis Using original purchase price as value

of existing voicemail system Model sets cost of proposed system Metcalfe’s Law shows that the

increase in value of the network exceeds the cost of the proposed system

PURCHASE IS JUSTIFIED! Let’s look at the model in detail…

How to get Analytica

http://www.lumina.com/reg/acanalytica.htm

That’s All!

Questions?