Exposing Business’ Blind Spots
Cost Optimization for Shared Services
When it comes to managing your business, how do you know if you have blind spots – opportunities or risks you cannot see? And worse, what if these blind spots are costing you money without providing any real value?
One highly impactful blind spot that effects many organisations today is understanding the true cost of ICT services (Information and Communications Technology).
Let’s unpack common blind spots that can occur, and how we might mitigate them.
In shared environments, the perception is typically that IT is a free resource for the business and is in endless supply. This promotes a costly culture of adding more, rather than managing ICT demand and redistributing resources to where they are most needed to meet business needs.
This approach is unsustainable in today’s ever-competitive market, where CEOs are demanding that the business do more with less – which means working smarter.
So, how can today’s CIO balance increasing demands on ICT services, and shrinking budgets with which to provide them? The simple answer is information.
Understanding your ICT environment
How well do you really know your ICT environment? Consider the following checklist, which may help you uncover some of your business blind spots:
• How many software licences are unused across your environment?
• Are you allocating ICT services according to demand?
• How many servers are running under-utilised?
• What resources are required to plan, build and sustain your ICT environment?
• Do you currently provide usage reports to individual business units?
• Are you billing each business unit for what they consume?
• Do you have a detailed Service Catalogue, with costing?
Each of the above, if not understood and managed properly, can create unnecessary waste – which equals cost.
The new paradigm for business budgeting
Business units within organisations are changing. Operating like mini businesses in their own right, they measure and report on the demand of their particular services across the business.
In more progressive organisations, they even charge one another. ICT is no exception, as this model allows for better business planning and budget allocation, leading to greater efficiencies.
How to mitigate blind spots and shift
To begin the journey of transforming how you deliver and ultimately charge for ICT services, you need a strong understanding of what makes up your service.
For example: what are all the components that make up your service and their cost? This may include software, storage, infrastructure, networks, communications, facilities, human resources, and so on. Then, you need to understand your customer base (the business units that consume these services). Who is using which service, how much of it, and when?
This seems simple enough but collecting and analyzing all of this information is no small feat. You could try it manually and maintain a mountain of spreadsheets, though this would hardly be the most effective or efficient way of doing it.
Another option is to use software applications specifically designed to help you quickly and easily interrogate and report on all aspects of your ICT environment. Some can even help sort the results into meaningful insights that you can act on immediately.
One such application is Magic Orange.
Magic Orange works across your entire environment to unravel the mysteries and complexities of ICT service consumption. With minimal inputs, it can tell you who is using what, and how much it costs. It provides information views that are relevant to the providers and consumers across the business. It produces reports that can support executives and managers in decision making, and granular reporting for technical teams to use in planning.
Benefits of shifting
This simple approach to understanding the true cost of ICT can help you start meaningful conversations with your customers to manage demand, redistribute underutilized resources, and save money instead of adding more kit.
You can also begin to optimize your ICT service performance by eliminating unused resource usage across your ICT assets. And when you understand your ICT environment, your ICT Services can be more agile and responsive to your businesses priorities.
The important thing to remember is not to wait until your data is perfect to start on the journey. Work with what you have now, so you can begin to plot a more profitable path immediately.
By Jeremy Hurter, Senior Consultant Analytics8, firstname.lastname@example.org | www.analytics8.com.au