The Hidden Dangers Of Technology Innovation

Throwing Money Away

The challenging economy has had a radical impact on the way organisations consider efficiency and productivity. Companies have rapidly embraced new technologies, such as mobile devices, to transform working practices and drive down costs. Yet in the rush to meet business demands for innovation in an era of radically reduced budgets many organisations have overlooked the massive pressure on the underlying infrastructure.

Companies, especially those in London, are now recognising that bandwidth, data storage, even power requirements, cannot be guaranteed. In this article I outline the value of data centres and the importance of a flexible approach to outsourcing that reflects business strategy and the opportunities for driving additional value – from shared services to improved access to global markets enabled by cloud computing model.

Technology Transformation

While the economic outlook continues to be somewhat uncertain, organisations across every business sector, from insurance and housing to automotive, are exploring further opportunities to drive down costs. And there is no doubt that technology innovation is transforming corporate productivity and efficiency.

Organisations are leveraging a raft of solutions to deliver flexible and remote working, increasingly deploying mobile devices and corporate document management systems, for example, to provide anytime anywhere access to critical information.

But there is a hidden danger associated with the phenomenal explosion in technology adoption and data generation. Just where is the capacity to support this real time access to information? Where is the bandwidth; where is the data storage and, for many organisations, where is the power?

This issue is becoming particularly pressing in London where many telecoms and utility providers admit they are reaching capacity, providing pressure not only on core operations but also on disaster recovery (DR) options.

Indeed, as an aside, the decision by many City of London based organisations to opt for central London DR sites is questionable – whilst the location is logical for staff ease, it provides double exposure to the escalating capacity problems arising in the city as well as the issue that London is below the flood line.

Add to this business risk the forthcoming lock down on infrastructure developments for six months, from March to September, along the Olympic route, and organisations need to think seriously about how best to manage capacity issues and make some serious decisions about the future.

Capacity Planning

There are a number of significant questions that organisations need to consider. How long can the business expand its use of technology before hitting the limit of available bandwidth, storage or power? How is it going to manage the escalating DR requirement and ensure the now requisite real time access to information is delivered?

At the same time, organisations are confused by the myriad technology choices now available. Many are struggling to assess the implications of virtualisation; understand the diverse cloud computing models and the feasibility of on demand computing. The opportunity to reduce capital expenditure by replacing on premise solutions with systems located off site and accessed via the cloud is compelling; as is the ability to ramp up capacity requirements on demand – at the touch of a button – to respond to peaks in business.

For companies with a highly seasonal business model or those with far higher demand at weekends than during the week, this approach removes the need for vast investment in infrastructure that is essentially redundant for much of the time, but has to be in place to manage the spikes in demand. The off premise approach, in its many guises, from software as a service to private cloud and public cloud, also provides the chance to achieve a consistent, monthly IT spend whilst also gaining access to up to the minute technology.

Business Model

These are complex issues that cannot be considered in isolation; each of these infrastructure changes has a direct and significant implication for capacity planning. There is also significant overlap between capacity demands, the adoption of cloud computing and the importance of DR.

Companies need to explore the opportunities to leverage third party data centres to gain on demand access to resources. Data centres have the scalability to support an organisation’s evolving demands; they have banks of virtual servers ready to be deployed; access to power, communications and networking resources and the provision of DR resources should be a given.

But there is no one, prescriptive solution. Nor is the third party route a panacea for all IT capacity issues. The vast majority of organisations will, over time, evolve towards a highly individual mix of on premise and outsourced solutions that reflect the needs of the business and evolving corporate strategy. For example, on demand computing can provide a lower cost route to a market outside the UK and rapid scalability if required.

Given that one third of all global trade is now cross-border; this is a major consideration for many businesses looking to exploit opportunities in the more buoyant economies outside Europe. Taking the cloud approach rather than build infrastructure on premise provides a lower cost, lower risk route to exploring new markets.

In addition, many organisations, especially in the housing sector, are exploring opportunities for reducing costs, such as shared services. Models vary, from associations opting to share infrastructure and IT systems to the larger organisations now providing services to smaller local businesses – organisations need to consider the on premise and outsourced options as part of the strategic decision making.

An intelligent outsource model enables organisations to explore the full range of options – from outsourcing just one aspect of the infrastructure to a third party to handing over responsibility for every aspect of the IT department and accessing every aspect of IT resources on demand. And a key component of the overall solution will undoubtedly be the quality and availability of skills on offer.

Conclusion

IT Directors in every market share a common objective: reduce the cost of business through better use of technology. However, realising that objective could come at a price. As capacity demands escalate beyond the capability of providers the issue will not simply be rising costs but an essential inability to meet business needs.

Organisations need to take a long hard look at capacity issues today and start assessing the opportunities for relocating some or all of the infrastructure off site. It is those organisations who make the right decisions today that will ensure essential technology innovation can continue whilst minimising business risk.

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Richard Barker has over 30 years’ experience in the computer industry, progressing from Computer Operations to Senior Project Manager. During this period, Richard gained knowledge across many different industry groups such as Insurance, Automotive Logistics and Public sector, interfacing with both owner managed businesses and senior management level in large corporate organisations. Richard co-founded Sovereign in 1994 assuming the role of Managing Director.