Negotiating The Data Network Labyrinth

In today’s dog-eat-dog world of high risk and financial uncertainty it can be easy for businesses to become disorientated and lost in their ongoing quest for a greater competitive edge. This can take on many forms, but it’s interesting to note that the number of organisations taking steps to upgrade their data networks, as a means of staying ahead of competitors, has increased exponentially in recent years.

Clearly, the ‘Promised Land’ for all decision makers is an increase in overall connectivity to drive efficiency. But what’s perhaps less well known is the potential for these continually upgraded networks to turn into a complex labyrinth, which could hinder progress more than it helps.

Today, an increasing number of organisations are subscribing to the view that by continually upgrading by bolting on storage, applications or services to existing data network infrastructure, they are giving themselves the ability to be more agile and efficient. What few businesses stop to consider is the enterprise-wide wake of legacy kit attached to an increasingly labyrinthine network behind them as a direct consequence.

It’s a situation that’s exacerbated by mergers, acquisitions and divestments, both on the client and supplier side. As a result, the waters are muddied, and IT decision makers are left struggling to make sense of what they have in the way of existing infrastructure before they invest in new data network equipment.

It’s also true that the larger an organisation is, the greater the likelihood they will be forced to deal with significant challenges around their data network inventories. The scale of the challenge is typically made even larger by poor inventory management. As employees leave or move without rationalising the networks they’ve built or sharing their knowledge, only serves to blur the lines even further.

In my experience, less than half of all large corporations actually know what they spend on data networks, or even what percentage of their corporate expenditure (on average around £250 million per annum) is spent on data network infrastructure. However, when you consider that many of these organisations have complex, highly secure networks, and that data constitutes almost two fifths of an overall telecoms bill, then one thing’s for sure – it’s certainly a substantial amount.

So what’s the answer? Clearly, there are a number of steps that businesses can take to make sure that they are not only planning forwards, but also backwards, when it comes to managing the costs accrued by their data networks:

  • As a first step, I’d recommend that any organisation which has made any recent investment in this area gives themselves a regular health check to see what equipment they have, what it adds to the overall business performance and what results it has delivered. This should, in turn, help IT departments to identify inefficiencies, and will allow them to move further up what I call the ‘maturity line’ and enable them to deliver savings.
  • As part of this overall process, there are some specific questions I like to ask in order to benchmark the effectiveness of existing data networking equipment. These questions range from the simple and obvious, such as asking organisations what the approximate number of circuits they have is, to the more subjective, such as asking businesses to grade their own level of control over their data network provision and spend.

The questions should be designed so that the responses give a strong indication of how often telecoms spend is reviewed internally, what level of confidence decision makers have in the level of IT spend and how the organisation believes that it compares against industry benchmark costs. As a result, and through sourcing answers to these questions, businesses will be able to draw up a compelling image of what their data networks look like and where, if necessary, they can cut costs.

  • Another effective solution to the data network conundrum is to ensure that a closer control of spend is implemented. The easiest way to achieve this is to shift the owners of governance closer to the business itself. Typically, governance is the last thing that’s looked at in any kind of restructuring or M&A activity, which means it can be easy to lose money as a result. Getting this right up-front and aligning it with specific business objectives can not only save money (as much as 10 per cent of network spend, in my experience), but can also help businesses to identify equipment they do not need.

For example, I’ve heard of organisations that have taken the decision to install expensive high-bandwidth, low-latency networks, which were only used by a handful of people. Clearly, this is an extreme example of infrastructure overkill, but it’s nonetheless true that by moving the owners of governance closer to the actual business process, situations like this can be avoided.

Spending money on upgrading data networks can be a costly business, and the lure of increasing productivity, efficiency and performance by continually upgrading the infrastructure is one that all too many IT decision makers find irresistible. Although it can be easy to get lost in the labyrinth of data network inefficiency, it’s important to remember that the ability to look back on where they’ve already been as well as where they are going can be the key to guiding them through the maze, and out the other side!

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John Casserly is a board director at Xceed Group. John has over 25 years experience in the IT industry, including three years at a tier-one Consulting firm. He is a specialist in Data Centres and Service Management and has deep experience in IT outsourcing having led the technology programme that resulted in outsourcing the entire IT infrastructure for Deutsche Bank in continental Europe. John has served in a number of senior management positions across varied industries including; investment & retail banking, insurance, telecommunications, media, manufacturing and the public sector. John served as Chairman and was a leading member of an industry forum for investment banks that focused on CIO level issues in and around the Data Centre. An early champion of the ITIL approach to service management John has managed programmes to roll out ITIL and associated toolsets across IT operations on a global scale. An accomplished Board-Level operator, John is an excellent communicator and is one of those people who not only "gets it" but can translate so that everyone else "gets it" as well.

  • Russell John

    Certainly true here, we spend a fortune on Data Networks and no-one can ever tell me why or what’s running where.

    • John Joyce

      Hi Mr Russell,
      My name is John Joyce and I have recently taken over the management of our (Xceed Group) Data Network Optimisation Practice. The article which you have commented on about was written by John Casserly who is a colleague at Xceed.

      I’d like to find out more about your particular circumstances to see where we can help.
      We engage on a gain-share basis i.e. if we don’t save you money, we don’t make money. We ask only to share the saving 50 / 50 in the first year only
      Our last project saved a client $11m in year one. Over 5 years that $60m.
      As we only ask to share in the first year saving typical ROI figures will be c. %900 on a $20m pa current network spend basis.