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What is the true cost of file transfer?

In the previous blog article “File transfer – a manual action or embedded process” I suggested that wherever possible file transfer should be an embedded or automated process rather than a manual action.  For those adopting the manual approach I suggested that companies were under-utilising their most valuable resource – their employees – and that it was a criminal waste of time and money.  In this article I’m going to delve deeper into the underlying cost of file transfer.

The problem is that many companies that require a file transfer solution look at the cost of the options available and disregard the appliance or software as too expensive.  Usually this is due to insufficient finances/budget, instead customers choose to continue with their existing solution or set-up.  This failure to invest or make the switch that is so desperately needed by many companies sets them back both in terms of time and money and will generally only delay the inevitable.

Stack of Coins

Whilst the implementation of a suitable file transfer solution will inevitably cost the company several thousand pounds, maybe tens of thousands in some cases, the business benefits achievable with the right file transfer solution can be ten-fold.

An area being readily addressed by many organisations now is that of Enterprise File Transfer,  or to those of us unfamiliar with the term ’sending large files as an email attachment’.  There are a number of vendors in the marketplace providing these types of solutions that allow users to create an email, attach a file(s) and send it.  This circumnavigates the email server storage or attachment limits, with in most instances the files remaining local to the sender ready to download.

Its true there is an upfront cost for a solution of this type, a large enterprise may well come in at £50,000 with annual support costs of up to 20% or £10,000 per annum ongoing.  However when you then look into the reduction in costs in other areas of the business the solution could pay for itself in a period of several months to a year.

To illustrate the point we’ll take a look at the cost of file transfer activities to a business of some 100+ users wanting to send files ad-hoc to external suppliers, customers or remote workers using a combination of FTP server/client and online email solution.

FTP File Transfer Solution 

Purchase of FTP server – free

Implementation of FTP server by IT administration – 2 hours

Ongoing weekly overhead to manage FTP server by IT administration – 5 hours

IT Administration cost of FTP server in first year @ £20 p/h – £5240

Each subsequent year – £5200

20% of the users send files via FTP daily taking them 10 minutes each @ £10 p/h – approx daily cost £33.33 – annual cost £8665.80*

Total first year cost £13,905.80
Email File Transfer Solution 

Set up cost of free online email solution – free account and say 10 minutes which we’ll disregard

100% of the users send files via the email solution daily taking them 10 minutes each @ £10 p/h – daily cost £166

Annual cost £43,160*

In this very basic example the total cost of our conservative estimate in year one is – £57,065.80.  Whilst implementing a solution won’t eradicate all of the cost a fair estimate would be an 80% reduction saving year on year £45,652.64.

*All calculations have been on the basis of 52 weeks worked per employee and a 5 day working week.

10.5 Month Break Even

In addition to the costs associated with employees time spent on non-core activities you have the security implications when using basic online solutions of where your data is being hosted, the security of data in transit and ensuring that the data is only downloaded by the intended recipient.  Then there is the management information, knowing who’s sent what and when with the added control of being able to restrict who is able to send data remotely.  Finally you have security implications of the traditional FTP server – no doubt many of you will have read about Finjan uncovering a database of 8,700 stolen FTP credentials. In the event that your server was to be compromised what would the hacker be able to access – what additional damage to your internal network and core business would be achievable?

As businesses send more and more data its important to remember that file transfer is in the most part, a small cog in the overall workings of your business.  That small cog though has the potential to reduce the effectiveness of the rest of your company or if we were to take it to the other extreme, lose sensitive data and affect your core business.  So what is the true cost of file transfer and is it worth not addressing your requirements? You tell me.

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When is FTP better than Managed File Transfer?

So why FTP File Transfer and what’s so great about it?  Well to be honest this isn’t necessarily a blog to evangelise FTP but more the way in which it works, lets call it ’sending files’.  With many businesses looking to adopt Managed File Transfer solutions, I thought it might be worth redressing the balance and putting things into perspective.  Managed File Transfer solutions have many good features but in the case of email based ones, sending files isn’t one of them.  In many cases the Managed File Transfer solution doesn’t actually send anything, rather it asks the company email server to send an email to a particular recipient.  The person receiving the email clicks on a link within the email to download the file or goes to a web site to log-in and manually download the file – so you see the responsibility is on the recipient to download the file and given this, there is no guarantee that the file will get there.  In fact there’s no guarantee the email is going to get there at all, asking the recipient to download the file(s).  Whilst Managed File Transfer solutions cater for the majority of ‘file transfer’ uses it is certainly not the right solution for every scenario.

FTP

So what do I mean by ’sending files’.   Well, historically the majority of solutions used to send files required a connection to be created between two sites and the files to be pushed/transferred to the receiving site using the appropriate delivery protocol for the connection method, e.g. Modem, ISDN or IP.   A typical example that many people would be able to relate to is FTP.  A user with an FTP client enters the details for the server, connects, selects the files to transfer, drags them over to the ‘remote server’ window (in many FTP client softwares) and the transferring of files starts straight away.  Once all of the files have been transferred you can see them on the remote server, they are there without question, the files have been delivered.

In contrast, Managed File Transfer solutions that use email messaging to deliver a message to request the download of the files, has several potential points of failure.  You’ve got to rely on two email servers to be happy to deliver the message and not overburdened with other requests, you have to ensure that SPAM filters don’t whisk away your all important message and probably most importantly – someone has to be there to open, read and perform the manual process of downloading the file.

In short FTP file transfer has a place in the enterprise.  If you want to be able to push data to a location with or without manual intervention, then FTP or another file transfer protocol with similar features will do.  Certain business to business situations will rely on data being sent from one location to the next e.g. a publisher to his printer, where time is of the essence and any doubt about the delivery of the data has to be avoided.

Finally it is possible to make FTP more functional and secure than many Managed File Transfer vendors make out, in fact some Managed File Transfer vendors have it built in.  Depending upon the solution you implement, you can get some great functionality to compliment this old delivery protocol and its also possible to integrate with workflow solutions, script integration and utilise API’s and SDK’s for complete integration.

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File transfer – a manual action or embedded process

Lets face it file transfer isn’t the most interesting subject in the world, but its a necessity for many businesses to move data from one location to another in order for individuals or teams to carry out certain tasks.

For many businesses however, file transfer is a tedious process requiring manual intervention.  Regularly staff are expected to manually create a job to send and watch the file being delivered to the remote site to ensure that its gone, a good example being the user of an FTP client.  Clearly there are instances where this scenario works and is the most economic way, e.g. the one off or infrequent transferring of files, but for companies that regularly need to send large files to the same location this approach is nothing short of a criminal waste of resources.File Transfer

As businesses strive to succeed in these challenging times many more are looking towards automation of their internal processes, this is the case irrespective of industry sector and to some extent business size.  A small part of many businesses workflow process is the delivery of files/data to another location – whether its on the same LAN, across a WAN or via the Internet whatever route the premise is the same even if the conditions are not.

File transfer should in my opinion wherever possible be an embedded process, effectively seamless, with the user not even aware that its taking place.  There are many ways of achieving this result (which in itself is another blog post entirely), whether hot-folder initiated or integrated with existing applications using various SDK’s.  Then there are the considerations of which delivery protocol is most appropriate, e.g. TCP/IP (FTP) or UDP (MTP/IP) and whether encryption of the data should be included.

The bottom line is in fact the bottom line (of your P&L statement).  Businesses need to wake up to the fact that manually sending files is not a good use of resources and where automation is possible processes are streamlined, files are delivered faster and human error is eradicated.

If you or your company could benefit from embedded file transfer or automated file transfer Pro2col would be pleased to assist you.

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