With advances in technology continuing to gather speed, global enterprises are finding themselves continually having to upgrade, integrate and restructure their IT to stay competitive. While ROI is the acronym of choice on every buyer’s lips, it’s nonetheless clear that there are an increasing number of companies who are leaving an enterprise-wide wake of costly loose ends.
Although many companies are good at planning their routeforward, perhaps more care is needed to ensure they are checking in the rear view mirror to mop up the costs of their legacy IT estates?
When change occurs such as when an employee leaves an organisation, or systems get upgraded it’s easy to lose track of active contracts and licences for which finance still foots the bill. Of course, some of the costs may genuinely be stranded and will naturally diminish over a period of time, but it’s also true that a whole host of costs can be aggressively tackled to eliminate what amounts to waste.
Such costs include; old licence agreements, defunct applications, third party support contracts, network ports, circuits, servers & storage, unused mailboxes, defunct printers, print & fileservers as well as telecom contracts for fixed-line, mobile and data networks.
Companies that use IT to help them address efficiency and cost issues clearly have the right idea, but their view needs to extend backwards as well as forwards. For example, cancelling contracts andunused licences, while ensuring subscriptions and contracts are amalgamated for the best deals are good, simple steps which can save a large amount of money.
After all, while the cost of licences may appear nominal when considered individually, the cumulative impact of culling those which are not needed can offer a huge opportunity for cost saving within the enterprise.
Business cases for key IT investments can often include the financial benefits associated with the disposal of legacy assets. A multi-million pound business investment in a new CRM system, for example, is likely to be justified partly on the basis that the new system means that the old system (or systems) can be retired with all resultant savings in licence fees, support contracts and specialist resources.
However, once the business case has been approved the focus then shifts to building new and interesting infrastructure and support models whilst the promise to decommission legacyassets, and their associated cost, becomes a distant memory. There are a couple of technology specific rules to follow in order to control what can quickly become a sprawling labyrinth ofunknown expenditure.
One in one out
Businesses are always keen to take advantage ofnewer and better applications in order to gain a competitive advantage overtheir rivals or to increase efficiency. This is fine and will always continue, but the question to ask at the approval stage for each of these projects is “so what is it that I can switch off once this has been implemented?”.
Companies may discover that when they follow through with cost saving promises made in the business case, they can’t actually decommission legacy assets as predicted. This could be for a variety of reasons, but the main one is a lack of diligent research before claiming the saving opportunity in the first place with some turning a blind eye to obstacles in the first place.
In some cases the necessary changes simply can’t be made. For example an optimist might expect that all legacy servers can be decommissioned once virtualised, but the reality is often that the application was written in such a way that it cannot be virtualised, or the business users won’t tolerate the risk. As a result, some solutions will still leave legacy IT systems in their wake.
Many companies do not have (or do not follow) data retention policies, and many more have data backup procedures that simply replicate data multiple times with very little improvement in the risk profile. Whilst businesses can’t take a minimalist approach to data storage they can assess their storage and back-up requirements to ensure they aren’t paying out for legacy data on premium storage.
Know what you’ve got
Every time a company migrates to a new network, or moves office from one location to another there is a huge risk that legacy circuits, devices and ports will remain “on” and/or billable. For instance, one circuit that is left uncancelled for one month may not be material in the monthly profit and loss figures, but consider the cost of thousands of circuits left in this state month after month, year after year.
Inventory and asset management are fundamental to controlling the cost of the IT estate; put simply if you don’t know what you’ve got then you won’t know what you’re paying for! Most companies fail to have sufficient control over their inventories and many choose to leave the fox in charge of the chicken coop by letting their service provider to manage the inventory on their behalf.
Many companies just don’t realise the value in this critical process and it is often regarded as too difficult, too time-consuming or too boring (or, sometimes, all three!).
External specialists can easily be brought in to help resolve these issues, often achieving better results than internal efforts thanks to their clarity of focus, their experience and their toolsets and methodologies. Such one-time exercises can deliver very positive results in short order, but the real solution is to implement the right controls within the company to ensure that payment is being made for what is being consumed – no more and no less.