On Sunday, technology types will be watching their applications, PCs, servers and networks to see whether change in Daylight Saving Time will affect their infrastructure. CIOs will be looking at the bill.
By time the clocks change, most of the patches will be installed and we'll probably have a Year 2000 type letdown--a lot of coverage and little real impact. However, the costs are very real.
This Daylight Saving Time (DST) dance--starting in 2007 the U.S. will start DST the second Sunday in March at 2 a.m. local time and return to standard time the first Sunday in November--doesn't require an army of costly consultants but does divert IT resources. The big question: What's the tab?
Forrester analyst Jeffrey Hammond has the answer (albeit an extremely conservative one). The tab: $200 million to $300 million.
Here's how Hammond arrives at that back-of-the-envelope calculation. He assumes companies have teams of about three to six people working the operational changes, planning and patching associated with the DST change. These folks worked roughly four to five weeks on DST solely.
"Based on the number of weeks you get to an average company cost of about $30,000 to $50,000," says Hammond. Multiply that sum by the number of public companies (assumption 6,000) and you get his guesstimate.
Clearly there are a few holes in this calculation, but it's likely to be way conservative. For starters, private companies have to worry about DST too. And this little--at least to the bureaucrats in Washington--change affects international companies too since they have to sync systems with the U.S. Hammond's calculation also doesn't include software costs. For instance, Microsoft is charging for patches that update older systems.
Simply put, Hammond's math has to focus only on the labor costs involved with DST because that's the most tangible thing to measure. Opportunity costs--after all you could be doing something more productive--and other intangibles, say that sale you didn't close because you slept past a meeting, aren't included in the cost calculation.
Considering all of those aforementioned factors would it be at all surprising if the DST costs approached a nice round number like $1 billion or so?
Now the argument for changing DST is very clear. The return is that folks will have more daylight and therefore use less power. Hard figures, however, are hard to come by. The Department of Energy has said that by extending DST by two months reduced energy consumption by the equivalent of 100,000 barrels of oil each day. At $60 a barrel those barrels equate to $6 million in savings each day DST is extended, or roughly $360 million. However, those savings may not be worth putting into an ROI calculation since it's unclear who (this is the Federal government after all) reaps the rewards.
The California Energy Commission notes the benefits of watts saved and even attempts a financial case associated with DST. In a 2001 paper, the commission examined the benefits of doing DST in the Winter and doubling DST (changing the clocks by 2 hours) in the summer. The financial benefits: Winter DST may save $100 million to $350 million. Double DST could save $300 million to $900 million.
The rub: Shifting DST on the federal level by a few weeks may not deliver those returns California mapped for what is arguably an extreme DST plan. Bottom line: DST is costing IT dough and the returns aren't that readily apparent.
"This move will supposedly save a lot on energy, but the dollar amounts remain to be seen," says Hammond. "I just hope they don't go back again a year or two from now."