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Linkages. In network terms, these are interconnectors, or plug-compatible interfaces, between networks and host lines. Linkage components include:

  Plugs. These include cable connectors and data switches, splitters and sharing devices, wire ribbons, and all other interface linkage hardware. This is typically the most overhead-intensive cost category in network management because it requires inventory control and planning to have every possible plug-type on hand.
  Modems. Modems and all other dial-up line management devices as well as communications line multiplexing hardware are most critical to line-speed costs.
  Wire boxes. These involve all the business enterprise physical plant or facility-determined access hardware and management.

Workstations. This category includes microcomputer configurations that are connected at each local network node or station. The components are:

  Terminals. These can include intelligent workstations through gateway servers.
  Storage. Storage elements can include the fixed hard disk (if available at the workstation node), diskettes, and any dedicated tape or CD-rom storage devices.
  Personal printer. This is included if a dedicated printer is attached.

Servers. This category always comprises an intelligent workstation with the minimum CPU and storage required by the particular network control methods used. It includes:

  File-server hardware. This includes the file-server workstation and all network boards that it controls, including LAN boards and host gateway link boards as well as fax boards and other specialized hardware.
  File-server software. This includes the network file management control software and shared applications.

Storage. High-volume mass storage is frequently needed for backup and archival purposes, which may involve technical support and specialized hardware or software well beyond the usual range of support for LAN administrators. This may include optical memory, imaging, CD-ROM jukeboxes, or other advanced technology with many gigabytes of storage capacity. The need for this technology is increasingly likely if the client network involves graphics, engineering, or any other application requiring intensive backup cycles and complicated version control. The use of high-volume mass storage is usually controlled from a dedicated server that automatically manages files and application software. The client-server may be a minicomputer that functions as a front-end processor to manage enterprise network message requests for real-time access to host programming functions or a backend processor to manage online access to a host database.

Communications. This is by far the most cost-intensive network resource. Telecommunications can make or break the network chargeback system, and unfortunately it is an area in which a data center may have limited options.

Much can be learned about network billing from a local telecommunications company, often at great expense.

LAN Administration Support. This can include the salaries of the local LAN administrator and the LAN help desk personnel, the costs of training, and the costs of host-based support of LAN inventory, purchasing, billing or any other service provided by the data center. It can also involve both short-term and long-term leasing of network hardware or software, diagnostics, or user training. This category can be large or small, depending on the client. In some cases, clients may prefer to provide some of the LAN technical support; in others, a data center may provide it all.

Internet Gateway Access

Whether the data center network is SNA or TCP/IP dictates whether it is an option to establish the enterprise’s own Internet gateway, which can cost as much as 10 intelligent workstations. That gateway, however, can be cost justified if the enterprise organization does any kind of business on the Internet.

Typically, business on the Internet takes one or more of three forms:

E-mail, user news groups, or a home page on the World Wide Web (WWW, or just the Web). A dedicated gateway requires substantial UNIX-related technical expertise to establish and maintain. A more viable option is a dedicated line to an online service account, which normally costs no more than a single workstation, and internal enterprise customers can still be supported in the three major functional business support areas.

Both a dedicated gateway and a dedicated line can usually be financed using long-term methods. If Internet access is a legitimate enterprise business need, it can be more than easily justified. If not, until the demand (and real need) for Internet access can be precisely predicted, it is often feasible to simply pass through direct charge billing of departmental accounts on online services with Internet access, such as Compuserve, Prodigy, or America Online.

EXPENSE CATEGORIES

The next step in developing an enterprisewide network cost-allocation system is to assign all expenses into a manageable number of nonoverlapping categories. Most managers can develop a matrix of network resource categories that has a direct correspondence to their host data center resource assignment matrix. If there is no existing host data center expense matrix to use as a model for defining the network cost allocation expense matrix, the communications manager can begin by grouping the basic categories of network expenses. Exhibit 1 shows a basic network expense assignment matrix.


Exhibit 1.  Sample Enpterprisewide Expense Matrix.

There are two important considerations. First, each of the categories in the expense matrix must correspond to budget line items that will be forecasted and tracked by a business enterprise financial controller or accountants assigned to audit network costs. Second, expense line items must be defined so they are clearly separated from all other items and there is limited opportunity to assign expenses to the wrong category or, even worse, duplicate direct and indirect costs.


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