Network managers need to develop a value proposition for the network that is broader than an increasingly efficient "bit pipe." Failing to directly connect network projects to business value can result in an attrition of network resources that is irreversible.

• Network projects have a much higher chance of being fully funded when they are tied directly to key business initiatives or broader IT projects.
• Application-savvy network organizations have a better chance of impacting end-to-end performance and are more likely to be perceived as adding value.
• Portfolio management for networking projects can deliver important visibility into project dependencies and can help highlight critical areas for sustained network investment.

• When key business initiatives demand step changes in network functionality, capacity or performance, tie the funding of network upgrades directly to the business initiative at hand.
• Leverage portfolio management to underscore the critical contribution of networking initiatives to accomplishing high-priority IT projects and to identify network dependencies.
• Demand a seat at the planning table for IT projects to get ahead of network projects that will have potentially high impact, and manage expectations for network performance.
• Leverage the Gartner run-grow-transform framework to associate networking projects with the appropriate value statements.

Networking budgets have been under almost constant scrutiny as the urgency for IT cost optimization has left no stone unturned. Voice and data networks, making up about 16% of IT spending in a typical enterprise, have received targeted cost-cutting attention due to the perception in many organizations that they are simply a utility that is easily replaced. Moreover, network managers have already done a credible job of ongoing cost optimization by renegotiating contracts, virtualizing connectivity and leveraging hybrid networks. This activity, while effective, has also served to further ingrain the idea that network costs can be contained even as demand for bandwidth continues to grow unchecked. Unfortunately, as long as the WAN is perceived as a commodity transport, declining budgets are likely to continue, and network managers will face even greater urgency to defend the value of their networks.

Network managers not only need to aggressively manage cost, but also need to make the transition to a more value-added perspective on network resources. A new approach to communicating network value and a different approach to managing networking budgets is needed to avoid the commodity mind-set. Networking projects can be grouped into the Gartner run-grow-transform framework to better characterize their value to the business. This framework can also create a more meaningful business context for packaging new initiatives.

Run-the-business projects are the "run-and-maintain" aspects of delivering network services, and are not about growing or transforming the business. They target cost reduction and operational efficiency and, as a result, are best-communicated directly in the language of cost optimization. Network projects that meet this definition include WAN capacity upgrades, migration from end-of-life transport services, PBX maintenance and implementation of network quality of service.

When considering run-the-business projects, network managers should be careful to communicate improvements in cost and efficiency framed with operational metrics, and avoid statements about delivering direct business improvements. Although these projects are more tactical, there is still an opportunity to communicate benefits with specific impact. Managers should be sure to track the right trends, and focus on setting realistic expectations when optimizing network performance.

For most network managers, the only visibility the network gets with senior leadership is when the network is down. Corporate telecom is thought of as a utility that should be universally available and managed down in cost on a continual basis. This perception makes it difficult for network leadership when the corporate network is reviewed in the context of the broader IT strategy. IT strategy exercises roll up to a CIO, but are then distilled into targeted summaries for the C-level executives, most pointedly the COO. With a relentless focus on execution and cost optimization, senior leadership will often see a condensed IT strategy with only a brief snapshot of the networking function. The biggest mistake that network managers make in these strategy presentations is to summarize a cost/Mbps trend line for the data network by adding up network spending for data and Internet services, and dividing it by the total port capacity. This calculation, while convenient, is too simplistic and ignores an important detail — the growth in larger port sizes.

The availability of Ethernet access to Multiprotocol Label Switching (MPLS), as well as large, burstable tiers for dedicated Internet access, means that the calculation of data transport costs divided by aggregate port speeds will exaggerate the commodity status of bandwidth. The networking function, where possible, should capture actual data transferred from network management tools on a sample basis or work with port utilization numbers to create a more realistic trend line of "cost per megabit (Mb) transferred" as opposed to "cost per megabit per second (Mbps)." This additional level of detail will still show increasing efficiencies in network spending, but avoids an exaggerated view of network commoditization.

In an effort to get new network projects funded, network managers can fall into the trap of overpromising improvements in performance. A recurring example of this is found in the transition to MPLS WANs. Instead of focusing on application availability, more-granular traffic management and a path to voice and video, network managers build the enthusiasm for MPLS around broad improvements in application performance.

A similar dynamic can be found in Internet upgrades, which often promise no more performance bottlenecks during periods of peak use. Instead of focusing on generic performance improvements that are often outside the complete control of the networking organization, it is preferable to develop a working definition of mission-critical applications and focus the network design around the performance and availability of these specific applications. These applications can be identified as the ones that, if unavailable for a determined period, inhibit the ability to ship product, realize revenue, etc. There are two primary reasons for this approach. First, it greatly narrows the scope of network optimization, while opening up a meaningful dialogue with a specific subset of application owners. Second, by forcing an objective definition of mission-critical applications, network managers can avoid the argument that each application is "highest priority," which can make optimization of little value.

While the networking organization is often thought of as the "pipe provider," this characterization has become a liability as senior leadership has become increasingly knowledgeable about networks as a result of consumer and professional exposure to networking technologies, and their associated costs. In particular, business leadership can struggle with the cost of Internet bandwidth that is charged back to the businesses, since it is often tenfold more costly on a cost per Mbps basis than the consumer Internet services with which they are familiar.

Network managers need to communicate the "big picture" of Internet connectivity by quantifying how much is actual bandwidth cost, compared with how much of the service cost is related to additional attributes like security, availability, traffic management, trusted third parties and change control. When viewed in this light, it becomes evident that the cost differential between business Internet and consumer Internet is more about business-class security, not simply bandwidth. When communicating network cost structures, be prepared to defend, in simple terms, the business imperative for secure connectivity and the contribution of security and availability to the cost of the network.

Projects aimed at growing the business rise above the tactical immediacy of run and maintain, and focus on having a measurable impact on business value. These projects are aimed at impacting business processes and focus on areas like improving sales cycles, reducing time to market, and improving customer acquisition or retention. Networking projects that fit into this category can range from CRM enablement and e-commerce initiatives to unified communications and video telepresence.

When considering grow-the-business projects, it is essential to elevate the discussion to business value, not simply process efficiencies. Engaging in this dialogue means leveraging relationships with the businesses and developing a greater intimacy with business processes and the underlying application architecture.

Key business initiatives, notably business process outsourcing, can have a profound effect on network resources. In some cases, site bandwidth is insufficient to support the resulting traffic; while in most cases, Internet connectivity needs to be significantly upgraded. This may only require incremental ISP capacity, but also can include infrastructure upgrades to proxies, firewalls, load balancers and other infrastructures that cannot support the throughput required by the new project.

Key business initiatives represent pivotal opportunities for network managers to tie project success to network upgrades directly related to the success of the project. By participating early and often in the IT planning process, network leadership can gain awareness of these business-critical IT projects and can tie network upgrades directly to the project plan and, ideally, directly to the project budget. While network upgrades can sound costly as a stand-alone proposition, they can become a rounding error when considered in the context of a large IT project. Wherever possible, tie network upgrades directly to key business initiatives through the resulting IT projects that support these initiatives. This approach links the networking function more closely with the business value associated with the project and can help foster relationships with business, IT and application owners that can pay dividends in the future. Without this level of proactivity on large IT projects, network managers risk remaining a persistent constraint on end-to-end performance without the budget to successfully address the incremental demand.

While connecting network projects to key IT initiatives, it is also critical to adopt a portfolio management approach to the projects under direct control of the networking organization. Too often, the functional layout of the networking organization can result in network projects falling into "towers" of voice, data, and mobility without enough consideration of project dependencies. While developing cross-functional project teams can resolve some of this dilemma, the real solution is a portfolio view of network projects that captures priorities, project timing, funding, dependencies and resource leveling. This holistic view can reinforce a strategic approach for projects like voice over IP, unified communications and collaboration that have an interdisciplinary nature, as well as a common network foundation that supports their deployment.

Rather than viewing network upgrades as tactical projects, they are communicated in a portfolio view as enablers for strategic communications initiatives. A portfolio view of network projects makes it more difficult to cut discrete projects, since dependencies are clearly communicated, documented and linked to other projects in the IT portfolio. This approach also helps highlight pending resource conflicts and can identify the need for additional contract staff or matrixed resources in IT organizations to meet project deliverables.

Remember that managing a networking portfolio is a dynamic process and requires the discipline of regular portfolio reviews within the networking organization and across the IT function. Successful network portfolio management means a commitment to dynamic project management discipline, which can be seeded by program management office resources or certified project managers participating on the core team. This underlying process discipline should be complemented with IT portfolio management tools that clearly document project deliverables, resources, risks, timing, budget and dependencies.

A migration to MPLS, or the ongoing optimization of MPLS through class-of-service templates, represents an ideal opportunity to get closer to your applications. Use MPLS optimization as a reason to meet application owners, understand strategies and dependencies in the application portfolio, and develop a deeper understanding of end-to-end business processes. This process view is critical, since so many mission-critical applications like ERP can also rely on the performance of many related applications as part of a business process.

A better understanding of application requirements and dependencies allows for finer-grained optimization of network performance, and allows the network to become more a part of the solution rather than part of the problem. And while MPLS networks, traffic shaping and WAN acceleration cannot always improve the performance of a specific application, network design can contribute directly to the availability of mission-critical applications and their related business processes.

Use MPLS optimization as a reason to engage with application owners and make the network an integral part of end-to-end business process. This can result in the network function getting a seat at the planning table for larger IT projects, a critical step in delivering higher value than connectivity.

Initiatives that transform the business are rare, since they are essentially big bets on entering entirely new businesses or completely revamping existing delivery models. The scale and strategic nature of these initiatives are such that the networking organization is likely to be involved later in the planning process. This timing, however, does not preclude referencing the core business assumptions associated with these transformational initiatives and connecting the viability of the resulting IT projects to linked projects within the networking organization.

Frame the network strategy as one that fosters business agility, making network projects part of the solution. One way to accomplish this is to seed the enterprise architecture process with strategic technology components early in the life cycle in anticipation of transformational requirements.

In summary, networking is viewed more than ever as a commodity. This has caused cost-reduction efforts to focus on managing down network spending with no clear understanding of the related impact on key business initiatives and the underlying IT projects that support them.

Network managers need to aggressively manage costs, as well as to take more specific actions to better associate business value with their services. These steps include:

• Making better use of portfolio management
• Introducing more interaction with business IT
• Ensuring more proactive involvement with large IT projects early in the life cycle
• Adopting a value-oriented approach to reinforcing network value to the business

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