Recouping the Wasted 60 – 70% of IT Operations Budget
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The Lifecycle Process
There are two lifecycle management process elements that drive waste: aged, non-completive assets and misguided Finance Department policies.
Aged, non-competitive assets.
The half-life of servers and storage these days is less than three years; yet most organizations keep them in production much longer than that. This is extremely expensive. For example, 1000 four-year old servers can be replaced by 200 servers or less. By removing these assets from the floor an enterprise could cut the people, software, and power costs by up to 80 percent.
Finance Department policies.
It is unfortunate that the decision as to how long hardware is to remain in use before being returned (if a lease) or sunsetted (if purchased) is made by finance staff that does not understand technology and the rapid rate of technological change. The policies were not originally created for IT hardware and are even less relevant for today’s IT market.
Summary
Although the level of waste may sound depressing, it is good news. IT organizations have a good number of options and opportunities to improve their data centers through best practices. Moreover, it is even possible that the corrective initiatives could be self-funding – with so much money wasted there should be ways to extricate the waste at no cost.
Organizations must implement best practices and eliminate excessive IT operational waste so that they can remain competitive with existing competition and new players that may be building their infrastructure in the cloud. By cleaning up the waste, IT executives can reduce operational expenditures to 50 percent or less and thereby, free up funds for enhancements and innovation. IT executives should benchmark their operations, understand the process gaps, and implement strategies and initiatives to become best of breed organizations.
IT is Today’s Business Differentiator for 360 Customer Engagement
