by Maxine Cheung

Five Top IT Budget Killers

Sep 30, 2009
BudgetingData CenterIT Leadership

Did you know there are areas in your business that you're spending more money on than you probably should? IBM Canada's strategic initiatives executive, Chris Pratt, came up with five top IT budget killers for businesses and offers tips on how companies can improve their bottom lines.

Did you know there are areas in your business that you’re spending more money on than you probably should? IBM Canada’s strategic initiatives executive, Chris Pratt, came up with five top IT budget killers for businesses and offers tips on how companies can improve their bottom lines.

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These five areas pose IT challenges that are common to most businesses, both large and small, Pratt said. He mentions that each area presents channel partners with opportunities to have meaningful conversations with and offer solutions to their customers.

The five top areas businesses are probably spending more money than they need to are: storage expansion, hardware sprawl, system complexity, information intelligence and security.

Pratt said these are not “the top five” IT budget killers because nothing in business is static. Rather, they’re five top ones common amongst most businesses. Partners can build key metrics around each or all of the areas that Pratt outlines as five top IT budget killers.

Pratt quotes Lord Kelvin’s statement, reiterating the fact that “If you can’t measure it, you can’t improve it.”

“The people who are the most successful are those (partners) that go in and understand the opportunity from a customer perspective,” Pratt said. “That should be the partner’s starting point and that’s the way partners will achieve success.”

Partners can ask their customers how well they think their company is doing in one or all areas of their business and can then present a suitable solution for them.

“Things that are left to their own devices tend to deteriorate and they don’t get any better,” Pratt said. “I refer these areas as five top IT budget killers because my belief is these are pretty much present in every (customer) account we deal with. These are five areas we’re pretty certain businesses can save money.”

In today’s day and age of information and storage, Pratt explains the amount of data is growing at a constant and consistent pace. For instance, due to certain legislation requirements, some organizations are being forced to keep certain information for longer periods of time.

Where the partner can come in is to help their customers enforce meaningful policies for storage management, in addition to offering consolidation and virtualize data and devices. Data can also be compressed and de-duplicated to help save space, Pratt added.

He also mentioned that it’s easy to find information in the public domain, but trying to find information internally within the business poses a greater challenge because business intelligence solutions, etc. are needed.

The majority of organizations also tend to spend money on hardware devices, which ultimately leads to hardware sprawl.

“We’ve put in too much hardware to solve problems because hardware is typically less expensive than software,” Pratt said. “The more (hardware) units you put in, the more money needs to be spent to maintain them.”

To help minimize hardware sprawl, Pratt suggests that businesses work to consolidate, virtualize and optimize the amount of infrastructure they have within the business.

In the area around system complexity, Pratt explains a lot of businesses are spending their money on just “keeping the lights on.”

“Consultants tell us that between 70 to 80 per cent of an organization’s budget is being spent just keeping the lights on and what they have operational,” he said. “The average small server costs about $500 per year in power and cooling costs. If (customers) are able to reduce their servers through virtualization, then that’s a quick way to see their savings.”

Businesses can address this issue by automating basic functions on their existing solutions, such as standardizing on toolsets. Automation will help free up money so businesses can use their savings in other areas of the company that may need it.

The fourth top IT budget killer Pratt mentions is in the area of information intelligence. We live in an age where we’re always on the hunt for information. It’s about finding the “right” information at the right time and also being able to communicate information efficiently and collaboratively.

Lastly, security compliance rounds-out Pratt’s suggested five IT budget killers. We live in an age where security threats are constantly evolving and are becoming more sophisticated, Pratt said.

“Past solutions are not scaling with the challenges,” he said. “Customers should have access to an end-to-end risk management solution approach. A one-size fits-all approach does not fit in, which is why IBM approaches these areas from a solution perspective.”

Pratt’s five top IT budget killers were listed as part of an IBM webcast that took place last month. This webcast was a part of a webcast series titled, “Smarter IT decisions.” Other webcast events that are scheduled in the series include “Consolidate and save, Unlocking the business value of information for competitive advantage and How storage can help you save.”