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Controlling IT Costs to Cope with COVID

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OpEx costs
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These are uncertain times. Early in 2020, businesses had to radically shift operations and – in a matter of days – send employees home, establish connectivity and support them remotely. Months into the ongoing pandemic, many workers are still at home and the subsequent economic crisis is forcing everyone to increase efficiency and find new ways to cut costs.

Successfully navigating the uncertainty will take determination, agility, and foresight. You’ll likely have to make some tough decisions about your IT environments. Which projects do you retire, and which initiatives move forward? Where can you be more efficient? How can you save money? Here are five ways to help you get started:

1) Rationalize and modernize your applications

It’s not unusual for the number of applications an organization has to number in the hundreds. In some cases, organizations are grappling with thousands of applications in their on- and off-premises IT environments. And with the rise in software as a service (SaaS), IT departments may not even know about all the applications running in their organization. Now is the time to roll up your sleeves, go through your list of applications and determine which employees use which ones. Once you’ve audited applications and usage, you’ll have a better idea of which applications to keep, and which to let go.

This kind of work may not be the most exciting. It’s tedious and takes time away from more strategic work. But the potential to save is huge. Capital costs can be lowered by reducing software licensing fees, and operating costs can also decrease. Fewer applications require less maintenance and support.

Now, more than ever, it’s important to build agility into your applications. The COVID-19 crisis has reinforced the importance of digital transformation and customer experience. Examples include the restaurant industry as they’ve scrambled to implement online ordering to sustain their business. As you are cataloguing your applications, take time to determine which applications can be modernized so they’re cloud ready.

There are a variety of automated tools that can be used to discover and audit applications and usage. You can also partner with an IT services provider that has the expertise and proven methodologies to help you rationalize and modernize your applications and still achieve your business goals. A third-party provider is also well-suited to serve as a neutral arbiter of application rationalization.

2) Optimize data management policies and practices

Every organization has and will continue to manage unstructured data – all that data, which often includes audio, video, and social media postings, does not have pre-defined structure. As such, it isn’t easily searchable. But keeping it all will bloat your storage, and the costs associated with it. So, how long should you keep unstructured data? When and what do you archive? When and what do you purge?

Simply throwing compression at their growing data stores isn’t the answer. You need clear policies and a lifecycle plan to manage all your data, and you need ways to reduce storage costs where you can. This plan should help you determine which data needs to be stored and for how long and can help you map tiers of storage to specific data. For example, you could decide to keep certain data for one year in readily available, high-performance storage. When the year is over, the data can be automatically moved to less expensive storage.

3) Control cloud costs

When it comes to cloud, many organizations are spending more than they need to. To minimize overhead and make the most of cloud, you need to create a roadmap that details the business benefits, determines which applications and workloads are good candidates for public cloud, and identify new cloud offerings that can help trim costs and/or streamline operations.

When it comes to moving applications to the cloud, timing is everything. You’ll need to determine which can be moved right away, which need to be reworked ahead of migration, and which are not worth the effort because they’ll either be decommissioned or replaced soon.

Once you’ve determined the applications best suited for cloud, be sure to optimize them for the flexibility public cloud can provide, such as billing based on usage. As an example, a workload that supports a retailer’s online business could be architected to spin up additional capacity in the cloud during the holiday shopping season, then shrink down when things slow in mid-January. And pay attention to customer experience. Failing to resize workloads based on performance could be costly.

You’ll also want to determine where your data should live – in your own data center, in a private cloud or in a public cloud. And you should also define how the data is backed up. Cloud storage can supplement on-premises storage, and in the event of a catastrophe, it can mean less downtime and faster recovery. But you’ll accrue network costs, so you’ll need to weigh the pros and cons.

Be sure to monitor your cloud costs closely, so you can flag any problems and take corrective action before they impact your budget. Regularly analyze usage, or you could end up paying hourly cloud rates for servers and applications that are no longer used. And be sure to properly retire and consolidate on-premises resources as needed, as you migrate workloads to the cloud to reduce both cloud and licensing costs.

4) Automate common activities

Interest in automation is heating up, and with good reason. Adopting robotic process automation (RPA) that uses software bots to perform routine tasks in business processes can reduce errors and free up knowledge workers for more impactful work, both of which can save money.

Gartner states that “hyperautomation deals with the application of advanced technologies, including artificial intelligence (AI) and machine learning (ML), to increasingly automate processes and augment humans. Hyperautomation extends across a range of tools that can be automated, but also refers to the sophistication of the automation (i.e., discover, analyze, design, automate, measure, monitor, reassess.)” This can provide organizations with real-time, continuous intelligence about their operations and drive significant business opportunities.

Despite increased attention to automation, few organizations are using it widely across their enterprises. For every organization that is, there are probably another seven that are not. Automation approaches have been more piecemeal than strategic. But that should change.  Gartner states, “By 2025 more than 90 percent of enterprises will have an automation architect to lead automation strategy and initiatives, up from less than 20 percent today.

Automation presents an opportunity for a quick win. For example, workloads can be automated to spin up quickly to the public cloud, as can all the associated network and security tasks. By reducing or replacing time-consuming, repetitive human tasks with software-enabled instructions and processes that are repeatable, scalable and simplify the IT environment, you can:

  • Streamline and optimize IT functionality
  • Manage your IT estate more effectively
  • Enable dynamic IT environments that meet business needs
  • Deliver more resilient compute and network resources
  • Improve network efficiencies and throughput
  • Achieve more robust security, compliance and risk management
  • Accelerate application development
  • Free up employees for more strategic work

5) Update governance

It’s time to get back to the basics. Review all the recent changes you’ve made to your IT estate and update your governance accordingly. For example, as you’ve moved workloads and applications to the public cloud, have you extended governance to include cloud, or are you still treating these separately? You need to adjust your governance strategy to fit cloud processes.

Change management is a good example. Review your asset management and change management processes. Those developed to support three- to five-year maintenance cycles don’t fit systems where:

  • Public cloud infrastructure is deployed in hours or days
  • Feature updates can be released weekly
  • Developers may spin operating systems up and down dozens of times as they test projects
  • The shift from capital expenses to operating expenses affects both hardware and software license tracking.

Review where you’ve integrated processes and where you’ve created new ones. By integrating, you can improve efficiencies because you’ll eliminate duplicative efforts. The same is true for security, disaster recovery, business continuity planning and supplier relationships.