| How do you cut $7 Million from your IT budget? The | | | | do they have their own flavors?o Time Clock |
| same way you eat an elephant, one bite at a time. | | | | systems - Do you have different time-clock systems |
| After 20 years of helping companies manage their | | | | at various sites? |
| Infrastructure Technology (IT), I've seen too many | | | | The cost and effort to consolidate (or rationalize) |
| companies go into paralysis when faced with major | | | | applications can be overwhelming. This is where I see |
| cost cutting opportunities. Most will tackle the low | | | | companies freeze up like someone staring at their |
| hanging fruit, but once that's achieved and only the | | | | elephant dinner. The typical response I get from IT is |
| "large effort" cost savings opportunities remain, | | | | "this is going to take years and I don't have the staff |
| paralysis sets in. I'd like to challenge businesses to | | | | or funding to tackle this large an undertaking". Wrong! |
| take a long-term approach to cost reductions instead | | | | This is where a long-term view comes in to play. A |
| of the quick and dirty cost cutting I see so often. By | | | | project of this magnitude is done in phases... one bite |
| taking a long term approach you are able to injects | | | | at a time! |
| controls over technology spending and ensures | | | | Here are the simple steps to develop your 5 year |
| maximum returns on your IT dollars. | | | | plan to eliminate excess costs from running duplicate |
| Let's look at a real life example of how this can be | | | | systems in your enterprise. |
| done using server consolidations. The low hanging | | | | 1. Determine priorities - Pick one application to start |
| fruit many companies embrace is to consolidate | | | | with. Identify which application will support your |
| servers using two basic strategies: consolidating small | | | | company's business objectives the most and start |
| applications onto single departmental servers without | | | | there. |
| implementing any type of virtualization technology. | | | | 2. Develop the budget - Determine what this |
| (Yes, some small applications will play nicely on shared | | | | consolidation project will cost in terms of hardware |
| departmental servers). The second strategy is to | | | | upgrades, software upgrades, network upgrades and |
| implement virtualization where high-end servers are | | | | temporary staffing, vendor and/or consulting fees. |
| deployed and software is installed on them allowing | | | | 3. Determine the return on investment - How much |
| the hardware to be carved out into smaller "virtual" | | | | will your company save over the life of the systems? |
| servers. This enables one large server to be used | | | | This should be actual dollars in terms of hardware, |
| more efficiently than several small servers. Each | | | | software, vendor support fees, consultant fees etc |
| virtual server configuration is allocated based on | | | | over the lifecycle of the system and compare these |
| application demand instead of hardware | | | | costs with the projected costs of operating in a |
| configurations established by server vendors. Both | | | | consolidated environment. |
| these approaches can be done with relative simplicity | | | | 4. Formally set aside funding (or request funding to |
| and minimal effort resulting in tremendous cost | | | | leadership). |
| savings. | | | | When you're done with steps one through four, |
| There is a third consolidation strategy that is where | | | | repeat the process starting at step one again. Pick |
| most companies experience paralysis. It is the most | | | | the next application to consolidate and go through |
| complex and the most avoided approach to | | | | the same process for the second application. |
| consolidation; that is Application Rationalization. Many | | | | Depending on the size of your organization and the |
| companies have grown through mergers and | | | | size of the project budgets, senior leadership may |
| acquisitions, others companies have operated for | | | | choose to fund more than one project at a time. |
| eons without a centralized IT department and | | | | You now have "year one" of your multi-year plan |
| consequently many businesses operate duplicate or | | | | complete! Now go back through steps one through |
| "like" applications throughout their enterprise. Take a | | | | four of the remaining environments where you have |
| look around your organization and see if you have | | | | duplicate applications and develop the rest of your |
| two or more of these types of applications running;o | | | | multi-year plan. |
| Financial applications - Are different business units or | | | | There is no reason for companies to live with |
| remote sites using their own financial applications?o | | | | excessive costs associated with running duplicate |
| Document Tracking (Imaging) systems - Do you | | | | applications. There's also no reason to be frozen by |
| have Engineering units at different locations using | | | | paralysis gaping at the size of their opportunities. By |
| different vendor's products to develop and track | | | | taking a long-term view of technology spending, |
| their Engineering documents?o Manufacturing systems | | | | companies can take their first bite out of their |
| - Do you have more than one manufacturing site and | | | | elephant budgets and begin their journey to cost |
| do they use corporate "Enterprise class" systems or | | | | reductions and technology efficiency. |