Business of IT
Lowering the Cost of IT
The idea of IT cost reduction raises images of a huge, dark jungle of unpleasant options. But if you step back and look at your entire IT infrastructure and business needs, you can find unexpected ways to save money without causing too much pain either for IT or for your business. Based on data gathered in Advaiya's Business Value Assessment (BVA) engagements with large, multinational companies, here are a number of suggestions that can help you identify ways to reduce IT costs while increasing IT's value to your business.
Reduce technology redundancy How many directories does your IT organization maintain? Advaiya's BVAs in very large enterprises found most companies had no fewer than 18 directories! You might not have that many, but I'd be shocked if you didn't have a handful. How much support time could you save by consolidating directories?
Do your company's business units sometimes take technology into their own hands and purchase solutions that IT might not even be aware of, let alone support? For example, do some business units purchase business intelligence (BI) front-end software, despite the fact that Microsoft Office and SharePoint, which are probably already available, provide the BI functionality most users need? You might be surprised at how much money rogue solutions represent when you add up technology spending throughout the organization.
How many Web meeting solutions are in use across your company? Would standardization save licensing and support costs?
Leverage investments across your IT platform When you evaluate technology purchases, how deeply do you consider the solution's prerequisites, dependencies, and repercussions throughout your platform stack? For example, when you research a virtualization solution—say, VMware versus Hyper-V—do you investigate whether you'll need to buy additional management technology to support the product you choose? The cost of additional management products might be the tipping point that pushes your decision to go with one or the other.
What about training? Would you or your staff need to learn new skills to deploy, operate, and support any solution you might buy? If so, that purchase has hidden costs for your company.
What about software or hardware that's deployed but never used? When users refuse to adopt deployed technology, your business pays all the total cost of ownership (TCO) but gets no return on investment (ROI). Try adding up the cost of all the products that are going unused, and then look for ways to make those solutions crucial to the users' day-to-day success. By integrating new deployments into existing workflow, you can ensure that you're getting business value from the deployed software. For example, I know of a company that had deployed InfoPath but found that users were ignoring it. Adoption only occurred when InfoPath was integrated into the organization's expense-reporting workflow. Everyone wanted to be reimbursed for expenses, so adoption of InfoPath became a given.
On the other hand, don't forget shelfware. Are there products your company paid for but never deployed? Keep an eye out for solutions that are so complex that no one will ever get around to installing—let alone using—them.
Understand options and pitfalls If it looks too good to be true, it probably is. That's a cliché, but there's a reason why it persists. In an economy that makes options suddenly attractive that would never previously have been considered, you have to be very careful to thoroughly understand what you're getting. Watch out for deals that claim you can save IT costs by reducing staff and hiring a third party to manage and run your infrastructure. Do such "deals" really save the company money? Often, they do nothing more than move expenditures from the IT budget into other cost centers. And once you've bought into such a deal, will your company be maneuvered into purchasing additional expensive services and solutions made by the service provider? It might be true that nobody ever got fired for buying from certain large technology companies, but some of those technology companies might have a vested interest in replacing existing IT infrastructure and staff with their own services.
Match Service Level Agreements (SLAs) to business realities Managing by SLA is an accepted way to ensure that IT meets the business needs. But have you thought through the implications of the extent of your SLAs? For example, are users active 24 hours per day? If not, do you really need a 99.999 percent uptime SLA? Suppose a server goes down at 2:00 A.M. If you're managing to that 99.999 SLA, somebody has to get out of bed and go to the office to fix the problem, or you need someone onsite at all times. Such SLAs are absolutely necessary in many organizations, but consider your specific needs and determine whether you might save money for the company by tailoring SLAs for specific needs.
Find ways to save energy Green IT is the buzzword of the year, and the green suggestion I hear most often is that you should virtualize everything you possibly can. Virtualization helps you consolidate servers so you have fewer machines doing work more efficiently, consuming less electricity, and saving floor space so you can reduce the physical size of the datacenter. Virtualization is indeed an excellent way to get greener for all those reasons. However, you can save power in lots of other ways, too.
Reduce the number of printers by 50% on each floor and in each department so that you don't have several sitting idle while consuming electricity. In addition, you can dedicate one printer per floor or department to high-quality print jobs to save on ink and toner.
Make sure no lights are on in the datacenter when no one is present. Consider investing in motion detectors, and create lighting zones so that only part of the datacenter is lighted at a time.
Encourage your company to adopt a work-at-home policy. Some companies are even eliminating office space for all employees and providing only a few shared workspaces for employees to use when they need to be in the office. Think about how much money your company could save by supporting workers at home and using technologies such as presentation virtualization (formerly known as terminal services), unified communications, voice over IP (VoIP), and Web conferencing solutions such as LiveMeeting.
Here's one of the most interesting ideas I've heard: companies are beginning to explore using all the heat generated in a datacenter to heat and cool entire buildings.
Software and hardware makers are finding more and more ways to help manage power. The Group Policy–enabled power management features in Windows Vista were some of the first steps in this direction. Windows 7 and Windows Server 2008 R2 provide several new power-management features.
- Windows 7 includes improved Wake on LAN (WoL), which enables Windows 7 machines to sleep longer.
- You get fine-grained control over wake-up packets.
- Network management tools can reach sleeping computers by taking advantage of protocol offload to the network adapter.
- The Wake on Wireless LAN (WoWLAN) feature extends sleep scenarios to wireless client devices.
- Windows 7 lets you turn off power to the network adapter when the cable is disconnected and automatically restores power when you reconnect the cable.
Windows Server 2008 R2 introduces several power consumption improvements, including
- Reduced multicore processor power consumption. Core Parking is a feature you configure through Group Policy settings in the Active Directory Domain Services. It consolidates processing power so that the computer uses as few processor cores as possible. Inactive processor cores are suspended until you need more power. At that point, Core Parking activates as many processor cores as are necessary for the processing you need.
- Reduced processor power consumption, which works by adjusting processor speed. You use Group Policy settings to configure this feature.
- Reduced storage power consumption. With Windows Server 2008 R2, you can boot from a Storage Area Network (SAN), so that individual servers don't need local hard disks. With fewer hard disks, power consumption decreases.
Just the Beginning
These suggestions represent just a fraction of the possible ways that you can reduce IT costs just by taking a close look at the efficiency of your existing infrastructure. The ideas are fairly obvious, but they do represent a lot of savings when taken all together. I know this is true because my colleagues at Advaiya have shown companies that have participated in BVAs how to save millions of dollars by following such practices.
Once you start thinking about all the ways you can tighten IT spending without losing staff or reducing the value of IT to the business, you begin to notice all sorts of things you hadn't thought of before. In just a few minutes of brainstorming with Eric Zinn, a former IT manager who now works with me at Advaiya, we came up with a huge list, including effective change control processes, centralized software and hardware procurement, monthly capacity management tracking reports, automated monitoring, effective help desk processes, having and implementing a sunset list of technology you no longer need, and just having regular operations meetings. Use these ideas as a jumping-off place to begin examining your organization's infrastructure.
Karen Forster is Director of Community and Media at Advaiya, Inc. She has more than 20 years' experience in publishing and technology. In 1996, she was asked to take the editorial lead on the start-up Windows NT Magazine (now Windows IT Pro). She launched SQL Server Magazine and its Web site in 1999. In 2002, Microsoft recruited Karen to serve as Director of Windows Server User Assistance, bringing her from Colorado to the Seattle area.