Today’s IT leaders are struggling to find ways to direct money and resources to the most value-driven IT efforts. That effort is complicated by IT budgets that are broken up into two primary categories: operational costs and capital costs – aka “Opex” and “Capex.” These categories may be useful for financial planning purposes, but they are less useful for financial analysis.
To really get a grip on where you’re spending – and possibly wasting – your IT dollars, you need to focus less on cost centers and more on a granular look at your IT environment. There are many factors that can contribute to waste in IT resources. Here are five of the most common.
1. Underutilized products. This represents both hardware and software capacity lying dormant in your environment. Many organizations have this problem, because development teams think there will be delays in getting access to IT environments where they can work, so they tend to hoard what they have. Monitoring software can help point out what is being used, and what is not.
2. Wrong-sized infrastructure. Another benefit of monitoring software is that it sheds light on resource utilization – how much capacity on each server is actually needed. This will help you find capacity you can re-allocate. It may also show that you’ve maxed out what you have, leading to diminished performance. Even cloud-based apps can strain an IT system if it lacks the Internet bandwidth to make it work, so think carefully about the impact of any new software and its lifecycle needs.
3. Poor understanding of your IT environment as it relates to your business. Technology and people can help you gain real insight into the state of your IT environment. The technology tools play several roles, including discovery, configuration management, monitoring, and more. The people add context by defining the interrelationships between the things that comprise your environment and how it supports your business. This context is invaluable in decision-making.
Let’s say you know a server is associated with a business process that handles customer onboarding. If your company is about to embark on a major marketing drive, then you likely wouldn’t take any capacity away from that environment. If you didn’t have the context and you merely looked at capacity and utilization, you may end up removing needed capacity, causing business disruption.
4. Poor IT adoption. Even with today’s technology-savvy workforce, not everyone understands how to get the most out of every piece of software. If that’s the case, then they’re not making the most of a valuable resource, costing your company business and even competitiveness. Make sure you plan for ways to drive adoption after Day 1 of a new IT deployment, and add training to help everyone get up to speed on how to best use that new tool.
5. Not understanding your competitive advantage. Not all IT performs an equal role within the enterprise. Some may be commodity infrastructure that handles basic housekeeping common to any company – payroll, for instance. Other software is what helps you define your competitive position. Do you know which is which? If not, it may be time for a deep dive into your IT stack to know where you should be prioritizing resources. You could, for instance, take those commodity functions and outsource them to one of many cloud-based solutions now available. That would free up valuable internal resources to drive customer acquisition, product development, or market expansion.
How do you think you’re doing in using your software efficiently? We’ve identified some great ways to help companies wring the most out of their software and hardware. Get in touch and let’s start a conversation.