Welcome to Part 3 of a 5-part series on IT cost cutting. Each day this week, we'll look at money-saving IT projects that you can replicate.
In Part 1, Lafarge North America learns how to negotiate from a position of strength with vendors AT&T and Hewlett-Packard, saving "seven figures" in the process.
Read Part 2 to see how Gap saves up to $1 million from a $400,000 systems administration project that also helped comply with PCI and SOX regulations.
Today learn about an asset management effort at the U.S. Department of Defense to take old, unused or unsanctioned software and hardware off its networks.
Flaunt Your Cost-Cutting Smarts
E-mail CIO.com writer Kim S. Nash and tell her about your money-saving project. Be sure to say how much the effort cost, what the financial returns were and how soon you saw them. Bonus points for projects implemented in three months or less, with substantial returns within a year. Your project may be featured in a story on CIO.com or in CIO magazine.
The U.S. Department of Defense budgets $20 billion for information technology in a given year and no one person or spreadsheet or database keeps a running and accurate count of all the pieces of hardware and software in action.
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That's not unusual for any large organization, which is why the asset management discipline emerged. The first step is figuring out what useful and not so useful computer gear is hanging off your network, then lay to rest those wasting time and money. A project to do that at the U.S. Army has so far produced multimillion-dollar savings and now the DoD itself wants to replicate it, says Joe Paiva, a leader in the DoD responsible for IT portfolio management strategy and policy development.
Paiva worked with asset management software from BDNA Corp., a private company in Mountain View, Calif. In one day, he and his team installed the BDNA Insight "agentless discovery" product on servers in one Army office, to search various servers and PCs at major Army bases and facilities.
"Agentless discovery" means the software automatically crawls an IP network to record every device and piece of software attached to it. Initial scans take about a day, Paiva estimates. BDNA Insight then spits out a report that can be sorted by type of device, server crawled and other variables.
The process turned up some surprises and has helped the Army close money leaks.
For example, across Army facilities, individual Oracle database and applications licenses were in use, sold to local military purchasing agents by value-added resellers. By moving those to an enterprise license and maintenance contract with Oracle directly, the Army saved "tens of millions" of dollars, he estimates.
On the hardware side, the Army found some printers that were underused and others overused. "A big printer that should be doing thousands of pages a month was doing only 100," he says. Paiva was promoted before the Army tackled printer reconciliation, but with a good asset discovery tool, he says, "you can very quickly see this doesn't make any sense."
As an ancillary benefit, the asset management program has helped the Army improve security. For example, Paiva's team found versions of the FoxPro database, which Microsoft now owns, that the military stopped using years ago. "We found older versions of the database." he says, "that potentially had vulnerabilities," such as letting data pass unencrypted over a network.
Another example: at Fort Belvoir, an Army base in Virginia, the software immediately found 103 copies of Google Earth, according to a presentation Paiva made soon after BDNA Insight was installed, to the Armed Forces Communications and Electronics Association, a nonprofit group studying military and homeland security IT. While individuals can use Google Earth without a license, large organizations aren't allowed to.
Also turned up at Fort Belvoir were 54 possibly unsanctioned copies of iTunes and several instances of Google Talk, which could allow unauthorized VoIP and instant messaging. "At installations where we thought we had all of the computers tightly locked down, it showed we had software which had been installed without going through our software approval and installation process," he explains.
"This is not just an Army thing. Compliance is always a challenge in any big organization." Managing employees using unsanctioned technology is a growing task.
Any large company can get the same benefits as the Army and the DoD, Paiva says. After serving for 10 years in the Army, he was an IT manager at a hospitality company and at a healthcare company. When the Iraq war started in 2002, he took a civilian IT management job with the Army.
Jack Heine, an analyst at Gartner, estimates that for organizations with no or very immature technology asset management programs, first-year savings could amount to 20 percent of the IT budget. Then 5 percent per year is possible for the next three years.
Tomorrow: In Part 4 of our series on IT cost cutting, learn how Washington Mutual expects to save $3 million with PC power management. That is, automatically turning off idle computers.