IT Budget Strategies: Doing More with Less

How IT can continue to offer the same (or similar) levels of service on severely restricted budgets?

Facing mounting IT budget cuts, organizations are looking to squeeze more out of their IT budget dollars. This has become an especially topical issue: according to research from Gartner Inc., 42 percent of CIOs made cuts to their IT budgets last quarter.

How can IT continue to offer the same (or similar) levels of service on (in some cases) severely restricted budgets?

Gartner suggests that shops can start by taking a long, hard, and especially critical look at their hardware assets. "Hardware rationalization … will help with asset and inventory management and provide a clear picture of the boxes that are being used effectively and those that are not," the market watcher said in a recent statement. Other benefits include reductions in maintenance and support costs, along with (more speculatively) lower overall energy costs -- possibly as much as $400 per server per year. "[H]ardware rationalization projects usually yield savings of 5 percent to 10 percent of the overall hardware costs, when measured post project," Gartner claims.

Secondly, Gartner advises organizations to make an effort to consolidate data center sites. "Most organizations still have multiple data centers for their IT operations, ranging from large complex installations to small machine rooms," Gartner declares. Projected savings extend beyond the obvious (e.g., property leasing or associated real estate costs) and include the elimination of a host of redundancies -- chiefly with respect to hardware and software assets, along with maintenance/support and disaster recovery services.

At the same time, Gartner stresses, organizations shouldn't approach consolidation as a pretext to eliminate IT. "While these [consolidation] projects often result in reducing the number of data center operational staff needed, Gartner advises users not just to get rid of people but to retrain them to fill skill gaps in other parts of the data center or wider IT organization," according to the company's release, adding that "[s]ite consolation can typically result in savings of between 5 percent and 15 percent of the overall data center budget."

Yet another cost-saving strategy involves the adoption of a more disciplined approach with respect to both energy and facilities management.

"Energy costs are rising for most data centers because the energy consumption of the underlying hardware continues to increase as new technologies, such as blade servers, are more widely used. As floor space runs out, more hardware is crammed into the space, thus requiring higher levels of cooling," the Gartner statement explains.

"[T]o manage the energy cost curve … [shops should] raise the temperature of the data center to 24 degrees Celsius to reduce the level of cooling required; use outside/free air as an alternative to expensive air conditioning; use hot aisle/cold aisle configurations, blanking panels and economizers; and use server-based energy management software to run workloads in the most energy efficient way, such as taking advantage of lower energy tariffs."

Other strategies include contract renegotiation (even to the point of terminating contracts that are too expensive; vendors might balk, but most are accustomed to accommodating -- however grudgingly -- customers during downturns); better management of "people" costs (including pursuing offshore outsourcing opportunities when applicable); delaying the purchase of new assets; and increased adoption of virtualization.

"Virtualization of hardware should be encouraged to improve operational efficiency, as well as to support consolidation, decommissioning and cost management programs. For most users, the net benefits will include a smaller hardware estate, which, in turn, will mean lower operating depreciation costs and less-expensive maintenance and support," the Gartner release concludes

"Virtualization is also a good way to control energy costs. Although virtualization requires license and project costs, users can expect to see net savings within 24 months, and the effective use of virtualization can reduce server energy consumption by as much as 82 percent and floor space by as much as 86 percent."

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