Gartner offers companies tips to save on I&O

Company says if enterprises implement all ten tips, they can reduce I&O spending by 10% per annum

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Gartner offers companies tips to save on I&O Gartner says that if companies follow its ten tips, they can reduce I&O spending by up to 10% per annum.
By  Georgina Enzer Published  September 28, 2011

As the global financial economy teeters on the brink of recovery, Gartner has identified ten ways that enterprises can reduce their IT infrastructure and operations (I&O) expenses by 10% in 12 months, and as much as 25% in three years.

"I&O represents approximately 60% of total IT spending worldwide, so with IT budgets remaining tight, it's no wonder that I&O cost-cutting pressure continues to be intense," said Jay Pultz, vice president and distinguished analyst at Gartner. "When it comes to I&O cost reduction, there is no ‘magic bullet', but best results can be achieved by implementing as fully as possible the 10 key cost reductions we have identified."

The first tip for reducing costs is to defer noncritical key initiatives. Gartner says that I&O leaders need to re-examine their key initiatives to determine which ones to focus on as near-term priorities.

Gartner advises that there are three key questions that enterprises need to ask themselves to determine critical strategies, these are; Does the I&O key initiative strongly support a high-priority business initiative that needs to be completed in the near term? Does the I&O key initiative lower the I&O cost structure in the time frame required? Does the I&O key initiative lower risk by upgrading I&O to prevent major outages or severe performance deterioration? 

The second cost reducing tip is for enterprises to re-examine networking costs, because a large chunk of I&O spending is given over to the data centre and the network.

Nearly half of the network expenses go to telecom service providers (TSPs), so network managers need to continue to renegotiate contracts with these vendors to ensure that their contracted rates are market-based, according to Gartner. Substantial steps can also be taken to optimise network costs by refining the design and sourcing of their networks.

The third tip is to consolidate I&O, which is closely related to standardisation, integration and virtualisation.

Data centres are now rising in importance, and Gartner expects this trend to continue throughout this decade, as server rationalisation, hardware growth and cost containment drive the consolidation of enterprise data processing sites into larger data centres.

Tip four is for companies to virtualise their I&O, because servers run at very low average utilisation levels and virtualisation software increases utilisation typically by fourfold or more, which means a company can typically reduce the number of physical servers by fourfold. This in turn can conservatively result in 50% cost savings on electricity and hardware costs.

Tip five is to reduce the data centre's power and cooling needs by using new design data centres that require less space, cooling and power.

For tip 6, Gartner suggested that storage growth should be contained; the company says that increasing terabytes to deal with the exponential growth of data is no longer viable and instead, tighter controls need to be implemented. 

Gartner said that multiple approaches need to be adopted, including the use of storage virtualisation, automated tiering and storage resource management (SRM) tools.

Tip seven is for enterprises to reduce IT support, because support for end users and the enterprise typically is about 8% of total IT spending, and most I&O organisations have at least four tiers of support. To reduce costs, organisations need to drive those support calls down to the lowest tier that can satisfactorily resolve users' issues.

Gartner also says that IT operations must be streamlined and staff and associated costs should be trimmed to be more efficient.

This typically entails implementing ITIL, the de facto standard framework in IT operations.

Tip nine is for enterprises to enhance IT Asset Management (ITAM).ITAM can help determine the life of certain assets, defer upgrades and eliminate or combine software licenses, as well as replacing certain maintenance service contracts with a time-and-materials approach.

Gartner's final tip is to optimise multi-sourcing by making decisions based on what aspects of sourcing are of critical and strategic importance to the company, playing to the strength of available staff, defining clear lines of demarcation, keeping the number of vendors involved to a small, manageable number and determining what makes solid financial sense.

According to Gartner, few I&O leaders have implemented 50% or more of the ten total cost reduction tips offered by Gartner. However, fully implementing these ten cost-cutting suggestions can provide significant savings.

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