10 key ac­tions to re­duce IT In­fra­struc­ture and op­er­a­tions costs

IT in­fra­struc­ture and op­er­a­tions costs rep­re­sent 60 per­cent of to­tal IT spend­ing world­wide. Here are 10 key ac­tions that can help you bring down the ex­penses by 10 per­cent in a year

InformationWeek - - Analyst Angle - Jay Pultz

Dur­ing the re­ces­sion, many ma­jor IT in­fra­struc­ture and op­er­a­tions (I&O) up­grade projects were de­ferred, slowed or can­celled. Many IT or­ga­ni­za­tions be­lieve th­ese projects need to be res­ur­rected soon, whether to meet busi­ness needs or to en­sure that I&O does not create se­ri­ous down­time sit­u­a­tions. But al­though growth in the de­mands placed on I&O or­ga­ni­za­tions has nearly re­turned to pre-re­ces­sion lev­els, I&O bud­gets have not, and nor are they ex­pected to any­time soon. With I&O rep­re­sent­ing about 60 per­cent of to­tal IT spend­ing world­wide, and IT bud­gets re­main­ing tight, it is no won­der that pres­sure to cut I&O costs re­mains in­tense.

When it comes to re­duc­ing I&O costs, there is no sin­gle area where busi­nesses should fo­cus their ef­forts. The best re­sults can be achieved by per­form­ing, as fully as pos­si­ble, by 10 key ac­tions rec­om­mended be­low. We pre­dict that, by 2014, or­ga­ni­za­tions that per­form th­ese ac­tions fully will be able to re­duce their I&O ex­penses by 10 per­cent in 12 months, and by as much as 25 per­cent in three years.


De­fer Non-Crit­i­cal Key Initiatives

I&O lead­ers need to re- ex­am­ine their key initiatives to de­ter­mine which ones to fo­cus on as short-term pri­or­i­ties. There are three ma­jor ques­tions to ask: Does the I&O key ini­tia­tive strongly sup­port a high­pri­or­ity busi­ness ini­tia­tive that needs to be com­pleted in the short term? Does the I&O key ini­tia­tive lower the I&O cost struc­ture in the time frame re­quired? Does the I&O key ini­tia­tive lower risk by up­grad­ing I&O to pre­vent ma­jor out­ages or se­vere per­for­mance de­te­ri­o­ra­tion?


Re­view Net­work­ing Costs

When it comes to I&O spend­ing, the data cen­ter and the net­work claim the lion’s share. As nearly half the net­work ex­penses go to tele­com ser­vice providers, net­work man­agers must rene­go­ti­ate con­tracts with th­ese providers to en­sure their con­tracted rates are mar­ket-based. Sub­stan­tial steps can also be taken to op­ti­mize net­work costs by re­fin­ing the de­sign and sourc­ing of net­works.


Con­sol­i­date I&O I&O con­sol­i­da­tion is closely re­lated to stan­dard­iza­tion, in­te­gra­tion and vir­tu­al­iza­tion. In the past, the rise of dis­trib­uted com­put­ing and other trends drove the de­cline of large data-pro­cess­ing sites. Now, how­ever, data cen­ter are grow­ing in im­por­tance, and we ex­pect this trend to con­tinue through­out this decade as server ra­tio­nal­iza­tion, hard­ware growth and cost con­tain­ment drive the con­sol­i­da­tion of en­ter­prise data-pro­cess­ing sites into larger data cen­ters.


Vir­tu­al­ize I&O Servers run at a very low av­er­age uti­liza­tion lev­els (less than 15 per­cent). Vir­tu­al­iza­tion soft­ware in­creases uti­liza­tion, typ­i­cally by four times or more, which means that, for any given work­load that can be vir­tu­al­ized, a com­pany can typ­i­cally re­duce its num­ber of phys­i­cal servers four-fold. Con­ser­va­tively, this means hard­ware and en­ergy costs can each be more than halved. As with con­sol­i­da­tion, vir­tu­al­iza­tion can be ap­plied to many I&O plat­forms: Unix

servers, stor­age, net­work­ing and client com­put­ing.


Re­duce Power and Cool­ing Needs

In the past, newly built data cen­tres con­tained huge ar­eas of pris­tine white floor space, con­sumed large amounts of power, and had un­in­ter­rupt­ible power sup­plies and wa­ter- and air- coolant sys­tems. Given the cost of me­chan­i­cal and elec­tri­cal equip­ment, as well as the price of elec­tric­ity, this type of de­sign no longer works. Fortunately, new ap­proaches to de­sign mean that new data cen­tres can now use sig­nif­i­cantly less space and power and cost much less.


Con­tain Stor­age Growth

Com­put­ing, net­work­ing and stor­age ca­pac­i­ties are grow­ing at dou­ble- digit rates an­nu­ally, with stor­age ca­pac­ity grow­ing by far the fastest. Gart­ner pre­dicts that by 2016, or­ga­ni­za­tions will in­stall 850 per­cent more ter­abytes than they had in­stalled in 2011. But throw­ing ter­abytes at the prob­lem is no longer a vi­able so­lu­tion. With ca­pac­ity growth far out­strip­ping cost de­clines, tighter control is re­quired. Mul­ti­ple ap­proaches need to be taken, in­clud­ing the use of stor­age vir­tu­al­iza­tion, au­to­mated tier­ing and stor­age re­source man­age­ment tools.


Push Down IT Sup­port

IT sup­port for end users and the or­ga­ni­za­tion typ­i­cally ac­counts for about 8 per­cent of IT spend­ing, and most I&O or­ga­ni­za­tions have at least four tiers of sup­port, each with a dif­fer­ent cost point and level of ex­per­tise. To re­duce costs, or­ga­ni­za­tions need to drive sup­port calls down to the low­est tier that can sat­is­fac­to­rily re­solve users’ is­sues. Stream­line IT Op­er­a­tions


I&O ac­counts for ap­prox­i­mately 50 per­cent of the to­tal en­ter­prise IT head count, and most I&O staff are in­volved in op­er­a­tional pro­cesses of a day-to- day and tac­ti­cal na­ture. To con­tain head count and as­so­ci­ated costs, th­ese pro­cesses need to be stream­lined and made as ef­fi­cient as pos­si­ble. This typ­i­cally en­tails im­ple­ment­ing ITIL, the de facto stan­dard frame­work for IT op­er­a­tions. The prin­ci­pal goal of ITIL is to im­prove ser­vice man­age­ment and qual­ity, but it has also been known to re­duce op­er­at­ing ex­penses.


En­hance IT As­set Man­age­ment

By it­self, IT as­set man­age­ment (ITAM) does not re­duce I&O costs. How­ever, it is a very ef­fec­tive tool for iden­ti­fy­ing and assess­ing cost re­duc­tion op­por­tu­ni­ties. ITAM can help de­ter­mine the life of cer­tain as­sets, de­fer up­grades, and elim­i­nate or com­bine soft­ware li­censes, as well as re­place cer­tain main­te­nance ser­vice con­tracts with a time-and-ma­te­ri­als ap­proach. IT as­set re­pos­i­to­ries are gen­er­ally the most ef­fec­tive tools to help in this en­deavor. Th­ese tools can main­tain dates, man­age changes to as­sets, and send re­minder e-mails to en­sure the life cy­cle process is man­aged proac­tively.


Op­ti­mize Mul­ti­sourc­ing

Sourc­ing is per­haps the most strate­gic de­ci­sion I&O lead­ers are fac­ing to­day. The de­ci­sion is not as sim­ple as whether to out­source or in­source all I&O. IT lead­ers can make sep­a­rate sourc­ing de­ci­sions for vir­tu­ally any I&O com­po­nent, sys­tem or func­tion. The key de­ci­sion cri­te­ria are those con­trol­ling as­pects of strate­gic and crit­i­cal im­por­tance to the busi­ness, play­ing to the strengths of avail­able staff, defin­ing clear lines of de­mar­ca­tion, keep­ing the num­ber of ven­dors to a small, man­age­able num­ber, and de­ter­min­ing what makes solid fi­nan­cial sense.

Vir­tu­al­iza­tion soft­ware in­creases uti­liza­tion by four times or more, which means that, for any given work­load that can be vir­tu­al­ized, a com­pany can typ­i­cally re­duce its num­ber of phys­i­cal servers four-fold. This means hard­ware and en­ergy costs can each be more than halved

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