Out of these arise various areas and functions where IT can specifically realize gains in spending and position operational processes for continuous improvement. There are also certain pitfalls to look out for, mainly because "cost optimization” and "cost-cutting” are not the same thing.
Work with Vendors on Pricing and Terms
IT departments have long been focused on getting the best price for requested purchases, but terms can also help optimize costs. These include not just terms of payment or long-term contracts to realize gains, but also trade-offs and less tangible benefits. Training credits or on-site classes, implementation support, on-site representation, and marketing cooperation can make the dollars spent on a single purchase worth more to the organization.
Be wary of vendor lock-in through contracts with very high exit costs, extremely long terms, and anything that suggests working with a competitor could be a violation. These types of line items can limit an organization's ability to test out and move to new technologies and innovations. Establish win-win relationships with vendors to level up to speed and accuracy and minimize the risk of new implementations.
Consolidate Shared Services
The System, Storage, and Network Administration teams should function under the same team. This eliminates duplication of efforts, provides consistency in operations, and minimizes rework or integration later on.
While there is a trend to pair Application and Production Support services exclusively with the product groups they support, this can prevent those resources from contributing to the organization as a whole.
Not all resources benefit from being part of a shared services team, but there are hybrid models that can consolidate them in similar product groups. These groups are still part of the IT staff, but with their priorities defined by the business side.
Keeping IT staff engaged with each other while still being part of their individual business groups allows the flow of ideas, knowledge, and information without sacrificing the support the business products need. This also will enable workloads to be balanced and shared better.
Consolidate and Standardize the Infrastructure
The core of all IT-specific cost-cutting lies in integrating, updating, and modernizing hardware devices and software applications, whatever forms they might be in. Legacy systems might be bleeding revenue every day, but there is strong resistance as well as inherent risk in moving to newer systems that expedite processes they support.
This can be especially difficult when independent projects, different business functions, or mergers in various geolocations have brought redundancies into the organization as a whole.
Present-day cloud infrastructure solutions can help eliminate complexities and simplify software management and upgrades in three steps:
Adopt a hybrid, multi-cloud architecture to speed up processes
Make the infrastructure agile and convergent
Unify diverse systems to centralize control and administration
Check systems for actual usage — hardware costs add up quickly when the workload is lighter than the build-out and licensing. Be careful when it comes to software licensing – even the best pricing models can be skewed when workloads are consolidated to under-used systems. Particularly with databases, this has shown to be complex and potentially expensive in traditional infrastructures.
Implementing a Hyperconverged Infrastructure (HCI) can minimize the number of resources required to maintain computing, storage, and network systems. While investment in HCI has up-front costs, it can significantly reduce overall data center footprint, maintenance, and support expenses. In addition to operational efficiency, hyperconvergence adds scalability, data efficiency, and faster deployment to the mix.