Key Cost Optimization Strategy – What It Means To IT Systems

Doing more with less is a true trial for any business, especially for small to mid-sized ones. It is all about the reallocation of resources and company budget from the operating expenses to making important investments that would lead to the growth of the company.

Most businesses are looking for ways and means to:

  • Reduce costs and complexities
  • Enhance performance and resource utilization
  • Free up IT resources to be able to focus on core business tasks

In some situations, large budgets were freed up for IT investments and so building big data centers was not an issue. However, in today’s times of fiscal fragility, it is just not a viable idea to invest capital in data centers.

Most CIOs are looking for solutions that would apply to the issues of over-utilized data centers, such as the right data center expansion solutions. They are looking for the correct path to take that would benefit the company in both its short term as well as long term goals.

There is a need to optimize the IT environment within the data center which would bridge the chasm between the disparate, complex, and cost-intensive old infrastructures and the ones that would serve the present requirements.

There are numerous steps that CIOs can take, which start with consolidating the present IT infrastructure footprints.

They can check if the existing IT infrastructure can be simplified, such as if the server, network and storage technologies can be upgraded, if the infrastructure could be virtualized so as to optimize its utilization to avoid wastage, and if it would be possible to consolidate all the services so that they can be used in a shared system.

The main aims here are:

a. Reduction in costs and complexities
b. Enhancement in performance and utilization of IT resources
c. Adding simplicity to IT management

The advantages this entire exercise would bring are:

  • Lower costs all around – in people, management, and hardware
  • Easy IT management and administration
  • Improved effectiveness and efficiency
  • Sharing of resources and management of capacity
  • Fast response rate and quick time to market

They should also address these factors to be able to optimize the IT costs:

  1. Apply consistent processes for optimizing costs across business.
  2. Check for visibility into costs across business.
  3. Go for executive level sponsorship for cost optimization initiative
  4. Check for resistance by IT users in terms of changes in the way they consume IT, like accepting reduced service levels or eliminating redundant systems.
  5. Check for fixed high IT costs. For example, even if the business volume goes down, costs do not often go down.

The next step in line is co-location of the IT resources. The main concerns of most businesses, especially the growing ones, today, are growth and scalability. Once the consolidation part is done and through with, the ideal next step is enabling the IT environment to scale quickly, albeit without investing heavily in terms of capital expenditure. Colocation is the perfect answer to this dilemma. It provides several advantages that can serve businesses that are searching for ways to expand or replace their existing data centers. Some of these benefits are:

  • There are cost savings at many levels, such as reduction in people costs, those associated with depreciation and obsolescence, and more. These savings help the business to reach their goals faster.
  • It can help in saving the immense start-up expenses related to expansion or replacement of the present data center.
  • There is enhanced protection and guarantee against outages since most colocation providers offer 99.99 percent uptime. Also, almost all providers offer redundant bandwidth, network, and computation.
  • Colocation service providers offer hardware and software management. This is an excellent proposition for businesses since it leaves them free to concentrate on core areas of competency as they are spared the onerous task of hiring or managing skilled resources to perform these chores for the business.

If there is a strong relationship between the client and the provider with regular evaluation and continuous analysis of usage versus cost versus value metrics, the true benefit of cost to value would be realized.

It is imperative for a business to understand its needs to be able to utilize consolidation and colocation to their extreme. There are several iterations of this technique and most of them provide better cost to performance to value advantage to the business.

Enterprise computing is changing and evolving every single day. The day is not far when most businesses would go for third party service providers and technical experts to handle all their IT administration and management tasks and just keep the vital, core strategic business functions in-house.


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