Ubuntu Implementation

Sir, 

Ubuntu does offer some benefits which could be beneficial to our organization but there are a few issues we should look into. The key question is whether or not the benefits outweigh the risks.  We have 2,500 hundred computers/laptops throughout or organization with each costing the company around $1,200.  Windows OS is about $200 out of that $1,200 a small portion but much more than Ubuntu—this does not include the cost of labor spent on maintaining and uploading the software since this will be required for both Operating Systems.  If we switched to Ubuntu we could save $500k each round of upgrades.  We upgrade our laptops every 2 years which would give us $250k savings each year. 

There are other cost which fall under “switching costs”, the cost it would take to switch the current laptops and training each employee.  According to the IT manager it will take 2 hours to switch systems and another 2 hours to train the employee.  We thought about doing lecture style training but we find that to be very unproductive and in the end require IT personnel to go to each employee for very small issues which will add to more than 2 hours.  The average cost per hour for IT is $25. If we take 4 hours per employee our IT department would spend 10,000 hours or $250k in initial costs to switch.  This makes the savings a net zero in our first year.  The last factor is opportunity cost with each employee spending time to train, set up & get familiar with the system.  We can give this a number by averaging out our salary cost at $80k/year per employee or $42/hour--this comes out to $417k.  There is also the productivity which is affected, though employees get their 2 hours, productivity will take 3 months to reach current level.  With efficiency levels at only 90% it will cost us $4.20/hour in lost production.  If this happens for three months we can expect another $630k in costs.  Our second year will have a savings of $250 which comes from not upgrading the Windows OS.  With these costs and stats we will be able to recoup the costs in the 5^th year.  Please see the chart below.

	1st	2nd	3rd	4th	5th	6th
Savings	250	250	250	250	250	250
Set up Cost	250	-	-	-	-	-
Training Cost	417	-	-	-	-	-
Inefficiency  Cost	630	-	-	-	-	-
Total Cost	1,297	-	-	-	-	-
Net Cost	1,047	250	250	250	250	250
Cost Recouped	1,047	797	547	297	47	(203)

Is this worth all the effort and cost?  Though we can calculate some of these costs by using hours spent or not spent we don’t know what some of the inefficiencies can do to the quality of the product we produce.  If we are inefficient it could leak into our product and cause our reputation to be tainted which could cause untold damage to our bottom line. There is no significant change to our bottom line or efficiency that is worth such a huge initial investment.  I believe the cost of Operating systems will continue to drop as Ubuntu and other alternatives become more popular.  The possible savings each year will actually decrease each year. 

I hope this is helpful in our decision to transition to Ubuntu.  If you have any questions please let me know.

Thanks

Rajae