Choosing the Right Backup Vendor Requires IT/Finance Cooperation
April 14, 2008
Selecting a storage vendor is like picking an insurance company: You hope that you never have to use the service. If you do, however, you absolutely need the company to perform flawlessly. In this Q and A, Storagepipe’s President and CEO Steven Rodin describes how IT and Finance can work together in order to ensure that the proper service provider is chosen.
Second, finance should play a proactive role in selecting the third party vendor. It should not simply be IT’s decision, but rather a joint decision. After all, the data belongs to the entire organization and in most cases the financial data is among the company’s most mission critical. Also, typically finance is able to provide the business checks and balances that perhaps IT (since they are solely generally focused on technology) may gloss over. In those particular instances, finance’s participation in the decision making process is particularly important.
Finally, finance should be clear as to what their requirements are from a legal and compliance standpoint. This information will play an important role in the company’s ultimate selection of a storage vendor.
What info should IT provide to finance so finance can decide whether they should own or outsource backup and recovery process?
Rodin: IT should provide a good working business model as well as a ROI model that lays out all the internal costs of the backup and recovery process. In particular the model should detail in a granular nature the labor and management costs as well as the associated costs of hardware, software, tape and other media services. In other words, IT should provide the fully-loaded costs of the process to finance so finance can have an accurate and full picture before making what will then be an informed decision. Obviously the company is looking for the optimal situation and in cases when budgets are not as big as they should be for backup and recovery, IT should provide detailed information about the vendor concerned and address all of the technology issues inherent in the solution. They also need to understand the technology implications of the solution on the rest of their network and ensure finance understands them well. IT should also be careful to communicate to finance the vendor’s partners in the backup process to ensure full transparency. Bottom line, it is as much a finance decision as it is an IT decision.
How does one go about pricing the different models?
Rodin: It comes back to comparing equivalents. One needs to look at TCO (Total Cost of Ownership), which includes hardware, software and media as well as the time and resources involved in the backup process. It is also key to understand the time involved in the restoration process. One must look at the add-on costs of the solution. Seldom is one buying just the solution, out of the box. There are always options and to add ones, and these must be taken into consideration in the decision.
Should IT or finance drive the solution?
Rodin: It should be a combination of both departments that drive the decision. Finance needs to drive the budget and communicate its business requirements to IT. The tendency is always to give less budget than it required, and this is a big error. Finance must allocate the right budget, so IT does not feel handcuffed into making a less than optimal decision. It should be looked at like one would look at an insurance policy. One does not want to be under-insured in the unlikely event of a crisis, and the same holds true is the selection of a backup vendor
How can IT begin to describe the exposure a company has in terms of a. getting into legal trouble or b. having some sort of disastrous loss of data based on what options they choose?
Rodin: IT needs to look at the history of the backup vendor and ensure they understand the process and have experience in their space. For instance IT should understand how many recoveries the vendor does annually as well as the time required to complete the recovery. Time is a precious commodity, and IT needs to understand and communicate to finance the time it will require IT to be involved in a recovery. This time can be extensive and therefore be an unwelcome distraction from the many other enterprise-wide projects in which they may be involved throughout the year. IT must also communicate that the costs of disasters can have a profound impact on other projects.
Prior to joining Storagepipe, Steven served as an Executive Director with Comverse Technology where he led the company’s self-service and strategic customer management initiatives and established strategic alliances with systems integration and technology partners.
Steven was the President and Co-founder of Davinci Technologies Inc., which provided enterprise Electronic Bill Presentment and Self-Service software to many world-class customers. Davinci was acquired by CSG Systems in 2003 and subsequently acquired by Comverse Technology in 2005.
Mr. Rodin graduated with a Honors Business Administration (HBA) degree from the
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