Companies can reduce their IT infrastructure and operations (I&O) costs by up to 25 percent in three years by implementing some key cost reduction measures, according to a report by Gartner.
The research firm last month released a report outlining 10 specific actions that organizations can take to shrink their IT infrastructure and operations costs by 10 percent in just one year and by as much as a fourth in 36 months.
According to Gartner, many companies will be unable to implement all of its recommendations because of resource constraints and priority conflicts. Even so, companies can gain significant cost-efficiencies by adopting just a few of the 10 suggested actions, Gartner noted it its report.
One of the most important actions that companies can take to reduce I&O costs, is to defer non-critical projects, according to Gartner. Before launching a new project, IT managers need to determine if the project supports a high-level business objective or if it will help their company either reduce operational risk or I&O costs. If the project will achieve none of those goals, it’s best to defer it for the time being, the research firm noted.
Virtualization technologies allow companies to improve resource utilization
Businesses can also gain significant cost reductions by ensuring that their telecommunications contracts reflect current market rates. Telecom vendors and telecom services account for more than 50 percent of all IT infrastructure and operations costs. Network managers need to periodically review and revamp their telecom contracts to ensure they are getting the best rates for the service, Gartner noted.
Server consolidation and server virtualization offer two other opportunities for companies to reduce I&O costs. The adoption of client/server computing models over the past several years has resulted in considerable server sprawl and associated management challenges. Companies can reduce costs by consolidating distributed servers and data processing sites into larger data centres, according to Gartner. Similarly, virtualization technologies allow companies to improve resource utilization and reduce the need for new hardware by up to 50 percent. Virtualization approaches can be used to consolidate servers, storage systems and networking environments.
Another opportunity for cutting costs lies in the storage arena, Gartner said. At current storage consumption levels, companies will install close to 850 percent more storage capacity over the next five years than they have in place currently. This sort of storage growth will be both unsustainable and costly. So companies need to start seriously thinking about the use of virtualization technologies, more intelligent storage management tools and storage tiering models to cut down on storage costs.
Using IT asset management tools
Organizations can also benefit from using more IT asset management tools to identify potential cost saving opportunities. Such tools can help companies identify and improve use of under-utilized assets and software licenses. Asset management tools can help companies defer costly upgrades and eliminate under-utilized or un-utilized hardware and software assets, the Gartner report said.
Gartner’s other suggestions for cutting operations and infrastructure costs include streamlining IT operations and pushing down IT support. I&O staff typically account for more than 50 percent of the total IT headcount at many organizations. Companies can save money by containing this headcount and by automating as many functions as possible. Vendor sourcing and management are also critical to managing IT infrastructure and operations costs. IT leaders can save a lot of money for their organizations by rationalizing the number of IT suppliers they use and by keeping them to a minimum so as to make vendor management easier.
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