Cost Saving for IT Infrastructure Management

In a turbulent economic environment there is tremendous pressure on IT organizations to take a hard look at the cost of running IT operations. Infosys' Rama Murthy Prabhala and Rahul M. Joshi discuss long-term and near-term strategies that will help IT Managers and CIO's reduce the costs of enterprise application operations.

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Much has been said about best practices in IT management to tide over the economic downturn. Under ever-increasing pressure, many CIOs are now looking at IT Infrastructure management as an effective means to drive business transformation. While most organizations are keen to join in, there are some strategies that may be employed to get quick wins.

The sheer pace of change in the technology space has allowed organizations to outsource key activities that would have otherwise consumed crucial internal resources. Management of IT Infrastructure is one of the areas that can be outsourced to a third party. Studies indicate that up to 80 to 85 percent of management activities can be done remotely thus offering an opportunity to decrease costs*.

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* Source: "Remote Infrastructure Management Services: Igniting India's leadership", NASSCOM-McKinsey report 2008

In the past, IT Infrastructure management usually consisted of asset-based transformations. However, with the emergence of solutions such as cloud computing, SaaS and utility computing models, enterprises can now offload their IT assets by subscribing to IT service components without having to actually acquire hardware. This has proven to be useful especially at a time when almost every other day a new technological acronym is born.

CIO Strategies for Improving Productivity and Rationalizing Costs

As hard pressed CIOs continue to focus on boosting productivity while reducing costs, large projects may not be financially viable at this time. However, all is not lost since there are proven strategies available for CIOs to address the challenge of supporting the business with a reduced IT spend. We recommend a three-phased approach to tackle the issue of cost optimization, innovation, and business-IT alignment to achieve the overarching objective of a lean and efficient IT driving business growth.

Before implementing these strategies, CIOs need to do a robust risk assessment and benefit analysis to determine how these will impact the organization. Rather than being swayed by the hype surrounding some of these strategies, they need to gather information and evaluate the impact carefully.

Many of these strategies assume that the organizations have capabilities to undertake such transformation programs. However, it is necessary that CIOs do a realistic capability analysis and if required, moderate the goals. CIOs will need to prepare a detailed roadmap on how to acquire the required capabilities. A prudent selection of partners and trusted vendors can significantly hasten the process of acquiring the capability.

A critical element is to balance tactical objectives with long-term strategic objectives. While the downturn has forced many CIOs to cut deeply into the organization costs to gain tactical advantage, it is also imperative that they not compromise on the long-term strategies and put the organization at risk during the upturn.

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