Want to Cut Hundreds of Thousands from your IT Operations Costs???
Cutting costs in IT Operations is a business imperative and should be important all the time, but the truth is it gets the most play during a downturn. It is no longer enough to just push projects that drive efficiency, integrity or productivity, now any major project must include cost savings or be highly justified. Below is a paragraph from an article I found on the IT Skeptic blog which says it perfectly:
This paragraph touches on the current strategic thinking of many CIOs. We hear it all the time as we talk to customers and/or potential customers.
So, how do you strategically determine where to cut costs and how? I would suggest doing the same as with any other project or initiative, first look for low-hanging fruit. Below I have listed ten thoughts or possibilities for your organization to implement now and start saving today:
1. Move to a service-based approach versus an IT infrastructure approach - This will align IT with the business and ensure service delivery is performed at maximum effeciency. Without a service-based approach, it is very hard to determine what the true costs are, how applications relate to the business and which assets are required to deliver and support a service. This critical step cannot be overlooked when cutting costs or you may run into unneccessary IT assets, overlapping or neglected applications, ineffecient monitoring, misused personnel and even more wasted efforts.
2. Dramatically reduce infrastructure management and support costs -
Most medium-sized IT organizations use upward of fifteen point solutions or more to monitor their infrastructure. Network monitoring, application monitoring, security information management, log aggregation, database monitoring, server monitoring, etc… Add up all of these costs, plus the personnel that support them. It's a lot of money to spend on uneccesary resources, not to mention the on-going maintenance and support costs. Cutting out just a few of these can have a dramatic impact on both efficiency and costs. In many cases, hundreds of thousands if not millions of dollars.
3. Trim revenue loss caused by service outages - Proactive response to issues before they impact revenue-generating processes is key. A single end-to-end view of critical services enables IT staff to diagnose issues that impact business processes, prioritize action, and target root cause more quickly. Early insight can prevent the issues before customers are impacted. We recently had a customer lower revenue losses and penalties associated with their trading system by over $400 million in less than six months. While this is an extraordinary example, it clearly illuminates the potential.
4. Enhance employee productivity - Technology is pervasive in how employees get their work
done. Every minute of downtime is lost productivity. An unified view (single pane of glass) into critical services such as email, ERP and CRM helps IT prevent issues and restore services more quickly. Many organizations have reduced outage time by an average 75% or more. Here's an example of what this can mean in savings:
A single view reduces these outages by coordinating and coorelating service-based events and allowing for quicker remediation.
5. Increase IT efficiency and reallocate headcount - Several analysts suggest that network and system administrators often spend 70% of their day reading log files, checking Key Performance Indicators (KPIs), diagnosing issues, and putting out fires. Implementing a single window can reduce - by 40% or more - the labor required for tasks such as collecting and analyzing log files, monitoring metrics, translating data from multiple solutions into a common language, conducting root cause analysis, and reporting compliance postures. That’s equivalent to freeing up half a day per administrator headcount. Depending on the size of your IT administrator staff this can be a fat chunk of savings, not to mention the increase in efficiency.
6. Realistically plan your IT budgets - Visibility into historic and real-time infrastructure performance gives IT the data needed to plan more accurately. Utilizing a system that provides usage-based metrics and enables service modeling helps IT plan for capacity, prioritize projects, and monitor actual performance at disparate sites. So rather than overbuying servers and bandwidth, IT can right-size, saving tens or hundreds of thousands of dollars each year.
7. Manage vendor performance and contracts - Gartner recommends evaluating vendor contracts to
reduce waste. Are SLAs being met? Is 99.999% availability really necessary? To know, IT needs insight into system performance. This can be attained with a solution that delivers metrics on virtually any device or combination of devices on the network as well as applications and resources spread around multiple sites. The aggregated data provides the record of accountability IT needs to enforce contracts or renegotiate terms, saving tens of thousands or more.
8. Optimize environmental costs and "Going Green" - The cost to power and cool servers is increasing at four times the rate of new server spending, and is the second largest contributor to the total cost of running a data center. Better management of power and air costs presents a significant opportunity to redirect spending from a “keep the business running” service to a strategic initiative.
Use a solution that aggregates data from power systems, heating and air conditioning equipment, power distribution systems, servers, and point solutions into a single dashboard view. The single view provides real-time decision support for reducing power consumption, which can save you tens of thousands while also supporting “green” initiatives.
9. Reduce or reallocate operations headcount - Demand from your vendor(s) a simple way to implement and maintain a solution that provides a service-based view of real-time data through a single pane of glass. This lets you eliminate and consolidate several monitoring and/or managment solutions into just one or two. IT can then redirect or eliminate the headcount supporting those previous systems. An IT shop that consolidates six monitoring solutions into one can easily redirect $400,000 or more (the cost of a burdened IT headcount) to strategic initiatives.
10. Decrease rework and miscommunications - Geographically dispersed systems and 24-hour support require teams to communicate effectively. If six operations personnel lose just half an hour per day deciphering poor handoffs between regions, the company loses $90,000 in productivity each year, and also increases the risk that a problem will impact users. Improve communication by providing a single version of the truth, and the collaboration tools for operations personnel will allow them work cohesively, and effeiciently.
Summary
Most organizations will be able to implement at least seven or eight of the savings points listed above. If they do this quickly, the savings are enormous and provide the basis to continue improving overall IT capabilities and efficiencies, not to mention help IT strategically align and become the heart of a thriving organization.
I hope you enjoy this post and can reap some of the benefits described...let me know how it goes.
