Money Changes Everything

Sometimes performance work is all about the customer: “What do we need to handle the seasonal peak with reasonable response time?” Sometimes performance work is all about the money: “Can we cut 30% of our IT budget?” When it is all about the money, you have to have some financial numbers to work with that everyone agrees upon. Specifically, you need a target amount to save and the relevant costs of the major pieces of hardware in your computing world. Get those financial numbers first, and make sure that everyone is in agreement on them. Now go do your performance work.

For a money-centered question, design your talk to lead with the money, because that is what your audience is focused on. Then talk about what is possible and what, if any, pain will result. For example:

  • The goal was to cut the IT hardware budget by 30%. That can be done, and 11 months out of the year all will be well. However, at your seasonal peak, my data predicts horrible response times.
  • I believe you can save $250K by making the following changes with no change to your average response times.

The Real Cost of Bad Performance

peasWhen looking at the cost of lost business, it can be useful to look at the lifetime value of a customer, not just the cost of “losing” X transactions.

For example: Imagine a grocery store refuses a return on a bad can of peas. It saved a $1.29 by doing so. However, if that customer buys $200 of groceries a week, 50 weeks a year, and lives near that store for five years, then the lifetime value of that customer is about $50,000. What is the real cost of losing a customer due to slow response time issues?


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