Top of the year focus on your digital transformation bottom line

Every year we’re given the opportunity to hit reset and redefine our vision of optimal performance. From both a personal and professional perspective, it is refreshing to have this recurring reset. A new vision of our perfect self or world class business. For me, the year starts with a goal to drop 5 kg to get to an improved running weight, to reduce my daily intake to one large beer per day (I am usually very thirsty) and to complete the launch of a new business venture with a focus on “doing well by doing good.” But, enough about my bottom line. This article is intended to focus on your bottom line.

As you reset your digital transformation and business performance objectives for 2018, I would recommend that you first add a grain of salt. I tend to agree with Bernard Golden. Most people miss the point when it comes to cloud economics and digital transformation. Yes, I realize that the article is dated, but the advice is quite valuable as we hit reset for the year ahead. I usually prefer to focus on higher level business strategy and business model innovation when discussing the real value of digital transformation. However, to adhere to the advice, we will take a fresh look at our I.T. investments and capabilities. Rather than focusing on business model innovation, we start with a fresh look at our digital foundation.

As a leader of a small-to-medium size enterprise, open the door to your data center and pause. If your computing empire is much larger, then schedule a WebEx or Skype session to simply ‘take a look around’ your estate. Count the people and systems. How many different “specialties” are required, in the form of people and systems, to run your business? Take a mental inventory of the layers of software that is humming underneath this exterior. Any room for improvement? So, we start with an inventory of on-prem and cloud-based digital assets. 

Start with software security and reliability

To analyze our foundation, I prefer to start at the software layer since software more effectively represents critical business processes and functions. While many enterprise software providers talk about software asset management, current tools and techniques allow us to have a much more impactful discussion that integrates software security, resiliency and optimization. 

With their acquisition of Secunia two years ago, my preferred software management toolset (for software buyers) comes from Flexera. This toolset allows me to build my digital foundation with the cornerstone of software security already set. Using Flexera, I can review my complete inventory of software assets and compare against a comprehensive catalog of software versions and patches. The toolset then provides a checklist of software versions and upgrades required to secure the enterprise. Before I virtualize, before I upgrade systems, before I do anything; I start with an updated software portfolio that ensures security and reliability.

Drive bottom line impact with software license optimization

With our software portfolio secured, we quickly proceed to optimize our software investments. Turning to the expertise of IDC and their recommendations for improved Software License Optimization, we start the new year with a goal of establishing a Level 4 – 5 software asset management capability. As noted in previous articles, the bottom line benefits that accrue from SAM should be considered table stakes in our digital transformation. However, effective software spend, license compliance and software usage reporting can all have significant impact on our bottom line performance.  Of course, this is not a “one time” thing, so to ensure ongoing optimization of our software portfolio, we establish an SLO rhythm with a review every 6 to 12 months.

‘In fact, organizations can achieve upwards of 5–30 percent savings in annual software spend by implementing a robust software asset management and software license optimization program’

Gartner Research for Flexera, ‘Software License Optimization Drives the Highest ROI’

With a secure and optimized software portfolio, we turn our attention to the vast inventory of hardware that we collected in our data centers and the newer portfolio of cloud assets.

From hyperconvergence to hybrid cloud

While we continue to focus on a longer term digital transformation strategy supported by a hybrid cloud architecture, we start with a more pragmatic step in the direction of hyperconvergence. Hyperconvergence is the software packaging of compute, storage and virtualization in an integrated system. Our decision to leverage hyperconverged infrastructure gives us the opportunity to realize a number of bottom-line benefits, including the immediate “soft” benefits of simplified systems management and improved scalability. To maximize the bottom-line impact of our hyperconverged decision, we need to clearly understand and work toward optimal use of IT resources with a new mix of roles and responsibilities. Of course, this benefit will require leadership and change management to fully capture the benefits since the ratio of (systems management activities: IT supported projects) will typically invert with our IT team becoming more available and proactive in driving business projects. An additional benefit that can be captured in our move to hyperconvergence is the reuse of existing systems to run software-only converged environments. 

My personal choice to enable a hyperconverged data center is Nutanix. Nutanix has been noted as a leader in Gartner’s Integrated Systems magic quadrant and they have recently embarked on a software-only strategy with strategic partnerships including Cisco, Dell and Lenovo. Great news for existing customers who have purchased from these vendors as you can now expand on your hyperconverged data center with Converged (existing) systems running the same Nutanix Cloud operating system.  Through my own experience with Nutanix and hyperconvergence, there are clear bottom line benefits to be captured that match up with those reported by industry analysts. All successful Digital Transformation initiatives begin with the basic premise that we will get “more IT at less cost.” To achieve this objective in our private cloud environment, hyperconvergence is an important step. 

IDC calculated that, on average, organizations will reduce and avoid IT infrastructure related costs by 30.6 percent compared with their previous environments or other potential infrastructure solutions.

IDC Whitepaper: “Quantifying the Business Value of Nutanix Solutions”

Quick recap

So, with our first trip to the plate we’ve already taken three good swings at driving bottom-line impact via our digital transformation strategy. 

• Start with software security and reliability
• Install a repeatable Software License Optimization rhythm
• Leverage hyperconverged infrastructure as a catalyst to data center transformation

While we’ve not yet “swung for the clouds,” we’ve driven a decrease in spend while freeing up IT capacity and increasing corporate agility. With our next at bat (and with my next article) we have our eye clearly set on the cloud and will detail the remaining components to get there with a continued bottom-line focus.