Ten Actions To Reduce IT I&O Costs

Grtner hs identified 10 ctions, which cn reduce IT infrstructure nd opertions (I&O) expenses by 10 percent in 12 months, nd 25 percent in three yers.

Grtner sid tht due to priority conflicts nd resource constrints, few I&O leders sid they hve implemented 50 percent or more of the totl cost reduction opportunities these 10 key ctions offer. However, depending on where n orgniztion is now, fully implementing these 10 cost-cutting suggestions cn provide significnt svings.

The 10 key ctions to reduce IT I&O costs include:

1. Re-exmine key inititives to determine which ones to focus on s ner-term priorities nd defer non-criticl key inititives.
2. Since nerly hlf of the network expenses go to telecom service providers (TSPs), network mngers need to renegotite contrcts with these vendors to ensure tht their contrcted rtes re mrket-bsed.
3. Consolidtion of I&O is closely relted to stndrdiztion, integrtion, nd virtuliztion. Dt centers re rising in importnce s server rtionliztion, hrdwre growth, nd cost continment drive the consolidtion of enterprise dt processing sites into lrger dt centers.
4. Virtuliztion softwre increses utiliztion typiclly by fourfold or more. Conservtively, this mens hrdwre nd energy costs re ech reduced by more thn 50 percent.
5. With the cost of mechnicl nd electricl equipment, s well s the price of power going exorbitnt, new design pproches cn result in dt centers tht utilize significntly less power, tke up less spce, nd cost less.
6. Contin storge growth by using storge virtuliztion, utomted tiering, nd storge resource mngement (SRM) tools.
7. Support for end users nd the enterprise typiclly is bout 8 percent of totl IT spending. To reduce costs, orgniztions need to drive support clls down to the lowest tier tht cn stisfctorily resolve users' issues.
8. ITIL should be implemented to contin hed count nd ssocited costs of I&O, which ccounts for pproximtely 50 percent of the totl enterprise IT hed count.
9. IT sset Mngement (ITM) cn help determine the life of certin ssets, defer upgrdes nd eliminte or combine softwre licenses, s well s replcing certin mintennce service contrcts with  time-nd-mterils pproch
10. IT leders cn mke seprte sourcing decisions for virtully ny I&O component, system or function. The key decision criteri re controlling those spects tht re of strtegic nd criticl importnce to the business, plying to the strength of vilble stff, defining cler lines of demrction, keeping the number of vendors involved to  smll, mngeble number nd determining wht mkes solid finncil sense.

"I&O represents pproximtely 60 percent of totl IT spending worldwide, so with IT budgets remining tight, it is no wonder tht I&O cost-cutting pressure continues to be intense," sid Jy Pultz, Vice President, Grtner. "When it comes to I&O cost reduction, there is no mgic bullet, but best results cn be chieved by implementing s fully s possible the 10 key cost reductions we hve identified."


CRN Network, October 3, 2011, 1100 hrs

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