Infrastructure Technology Cost Cutting - Cutting It Budgets by $7 Million Dollars

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Flavors - Infrastructure Technology Cost Cutting - Cutting It Budgets by Million Dollars

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How do you cut Million from your It budget? The same way you eat an elephant, one bite at a time. After 20 years of helping associates manage their Infrastructure Technology (It), I've seen too many associates go into dullness when faced with major cost cutting opportunities. Most will tackle the low hanging fruit, but once that's achieved and only the "large effort" cost savings opportunities remain, dullness sets in. I'd like to challenge businesses to take a long-term advent to cost reductions instead of the quick and dirty cost cutting I see so often. By taking a long term advent you are able to injects controls over technology spending and ensures maximum returns on your It dollars.

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Let's look at a real life example of how this can be done using server consolidations. The low hanging fruit many associates embrace is to join servers using two basic strategies: consolidating small applications onto singular departmental servers without implementing any type of virtualization technology. (Yes, some small applications will play nicely on shared departmental servers). The second strategy is to implement virtualization where high-end servers are deployed and software is installed on them allowing the hardware to be carved out into smaller "virtual" servers. This enables one large server to be used more efficiently than any small servers. Each virtual server configuration is allocated based on application demand instead of hardware configurations established by server vendors. Both these approaches can be done with relative simplicity and minimal effort resulting in colossal cost savings.

There is a third consolidation strategy that is where most associates touch paralysis. It is the most involved and the most avoided advent to consolidation; that is Application Rationalization. Many associates have grown through mergers and acquisitions, others associates have operated for eons without a centralized It group and consequently many businesses control double or "like" applications throughout their enterprise. Take a look colse to your society and see if you have two or more of these types of applications running;

o Financial applications - Are different enterprise units or remote sites using their own financial applications?
o Document Tracking (Imaging) systems - Do you have Engineering units at different locations using different vendor's products to fabricate and track their Engineering documents?
o Manufacturing systems - Do you have more than one manufacturing site and do they use corporate "Enterprise class" systems or do they have their own flavors?
o Time Clock systems - Do you have different time-clock systems at discrete sites?

The cost and effort to join (or rationalize) applications can be overwhelming. This is where I see associates frost up like person staring at their elephant dinner. The typical response I get from It is "this is going to take years and I don't have the staff or funding to tackle this large an undertaking". Wrong! This is where a long-term view comes in to play. A project of this magnitude is done in phases... One bite at a time!

Here are the easy steps to fabricate your 5 year plan to eliminate excess costs from running double systems in your enterprise.

1. Decree priorities - Pick one application to start with. Recognize which application will keep your company's enterprise objectives the most and start there.
2. fabricate the allocation - Decree what this consolidation project will cost in terms of hardware upgrades, software upgrades, network upgrades and temporary staffing, seller and/or consulting fees.
3. Decree the return on speculation - How much will your enterprise save over the life of the systems? This should be actual dollars in terms of hardware, software, seller keep fees, advisor fees etc over the lifecycle of the theory and assess these costs with the projected costs of operating in a consolidated environment.
4. Formally set aside funding (or ask funding to leadership).

When you're done with steps one through four, repeat the process beginning at step one again. Pick the next application to join and go through the same process for the second application. Depending on the size of your society and the size of the project budgets, senior leadership may choose to fund more than one project at a time.

You now have "year one" of your multi-year plan complete! Now go back through steps one through four of the remaining environments where you have double applications and fabricate the rest of your multi-year plan.

There is no surmise for associates to live with immoderate costs associated with running double applications. There's also no surmise to be icy by dullness gaping at the size of their opportunities. By taking a long-term view of technology spending, associates can take their first bite out of their elephant budgets and begin their journey to cost reductions and technology efficiency.

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