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5 Proven Initiatives to Optimise Costs in IT
The global economy routinely cycles through periods of strength and weakness. Similarly, most industry verticals also wax and wane as market forces fluctuate. But through it all, good times and bad, companies continue seeking ways to cut costs. And why not? As Ben Franklin famously advised, a penny saved is a penny earned. With this in mind, here are five ways to save money that you shouldn’t overlook.
#1) Standardise and Automate ProcessesMost IT departments are plagued with processes that have been cobbled together over the years and are anything but streamlined. Many of these processes incorporate wasteful steps which involve unnecessary human intervention. Even worse, many processes aren’t documented and standardised, so they’re performed differently each time, requiring personnel to reinvent the wheel over and over. Common processes and procedures should be analysed and reworked to eliminate wasteful steps. The processes should also be documented so that they are performed the same way each time. (Consider using the Information Technology Infrastructure Library (ITIL) as a documentation tool.) Once procedures have been streamlined and documented, many of them will be good candidates for automation. The degree of automation possible, of course, will be determined by the capabilities of the technology you have implemented across your IT portfolio.
#2) Offer Enhanced IT Self-ServiceSelf-service is the Holy Grail of IT: getting users to handle many of their own problems instead of contacting the IT service desk at every turn. IT self-service also happens to be a great way to cut costs. Gartner has reported that 40 percent of help desk calls can be eliminated through self-service—and some industry experts estimate that number to be more like 60 percent. But that same Gartner report estimates that only five percent of IT issues are resolved through self-service. Enhanced self-service is a great cost-cutting opportunity that most companies are simply overlooking. The Gartner report also notes that a key to enhancing self-service is the quality and capabilities of the tools used: “The right ‘companion’ tools and processes are prerequisites for a successful implementation.” The report also notes that if the proper tools aren’t chosen, costs can be counter productively increased when trying to enhance self-service. This is where your ITSM tool comes into play. What are the most important qualities to consider when implementing self-service?
- A Community Feature: The tool should provide the ability for users to seek and receive help and advice from other users. The social aspect of this capability can be a strong driver in encouraging more self-service participation.
- Easy Customisation: A self-service portal should be easy to customise and configure. It should not require extensive development resources to build, customise, or automate—otherwise you might find yourself facing increased costs through enhanced self-service, as the Gartner report warns.
- Anytime, Anywhere Access: A tool that provides self-service portal access only via desktops will be of limited value in today’s business environment. Users typically utilise multiple devices, including tablets and smartphones. The tool must provide a degree of device-independent flexibility that will serve to increase the level of utilisation by users.
#3) Evaluate Licensing and Deployment ModelsThe old model of buying a software tool outright, and then spending additional money each year in support and maintenance costs, is plummeting in popularity. Instead, more organisations are moving to a subscription model. Similarly, SaaS is gaining favor over on-premise development as a means of cutting costs. But there are many factors in pricing models that can affect TCO. And no single model is going to be a silver bullet for every company. The following is meant to be a guide to the options available, and not a recommendation of which is better. That determination will be decided by your organisation’s unique circumstances.
DEPLOYMENT: SAAS VS. ON-PREMISE VS. HYBRID CLOUD
- SaaS: SaaS environments offer the benefit of effectively renting an environment. Renting is more expensive than buying, but SaaS offers the potential for huge savings by eliminating the need to hire staff to maintain the systems.
- On-Premise: This model is often chosen to address security concerns and potential regulations. Some companies chose on-premise because they already have the necessary expertise and infrastructure in place. In these cases, on-premise can be a great fit, and can yield some serious long-term cost savings if the system is configured correctly.
- Hybrid Cloud or “Own Cloud”: This option is a blend between on-premise and SaaS. If your IT department has its own Azure or AWS environments, you can offload the hardware portion of your solution to the cloud while maintaining strict control of the software environment. Again, costs will be impacted by existing expertise on staff, and the need/cost of employing new people. Evaluating your existing hardware/cloud infrastructure can provide guidance in determining where your company is most comfortable and where it will see the most savings.
LICENSING: SUBSCRIPTION VS. PERPETUALHow you license can also impact TCO—and, as with deployment models, there is no right or wrong way for every company.
- Subscription: Subscription models are great for companies that are growing quickly or that experience constantly changing IT staffing cycles. Subscription can also offset a lump sum purchase by spreading out payments into more manageable, budget-friendly amounts. But exercise caution: Some subscription model contracts are so rigid in terms and time frames that the flexibility benefits of this model can be negated.
- Perpetual: Perpetual licenses are great if you have an established IT staffing core, and if you have a great handle on what you’ll need, both immediately and in the future, from your licensed software. And although the upfront cost may be more, TCO over a typical two to five year period almost always shows that perpetual will save you money.
LICENSING: CONCURRENT VS. NAMEDThis will be an easy choice for most companies. In all but the rarest of circumstances, you will save considerable money going with a concurrent licensing model.
- Named: The named license model requires you to purchase a license for each login name. Whether a user name is actively logged in or not—whether they EVER login or not—if you have a login account, then you pay for a license. For the clear majority of businesses, overspending on licenses is a certainty with this model.
- Concurrent: Concurrent licensing requires the purchase of one license for every person CURRENTLY logged in. If you have 300 technicians on staff, but only 100 are in the system at any one time, then you only pay for 100 licenses. Gartner has found that the comparison of named vs. concurrent shows the ratio of licenses needed lies somewhere between 3:1 to 7:1. So, even if a single concurrent license were two times the price of a named license, you’d still come out ahead with the concurrent license.