Reduced IT budgets are a headache for managers, but also present an incentive to identify obvious targets for improvements and cost reductions that help build momentum for larger initiatives. A recent article in McKinsey Quarterly suggests a three phased approach to IT transformation: Immediate Cleanup, Reducing Complexity, and finally, Business Innovation. There are a multitude of levers outlined in the article that can be used to shape an IT environment. Here, we have picked those that we feel are of particular importance to our clients.

Rationalize Software Licenses

An inventory of licenses should uncover those that are idle, underused, and even incorrect. Tools like Zenworks Asset Management can be used to create an inventory of all applications used across the enterprise and reconcile those numbers with the existing licenses. That can be a base for a comprehensive review of how many licenses are truly necessary, to retire those that aren’t, and to then negotiate greater discounts by consolidating licenses.

Standardise technologies

As a company grows it acquires a diversity of technologies including programming languages, operating systems, and integration tools. This runs contrary to the notion of accomplishing work with a minimum expenditure of time and effort. A careful review will point out redundant versions, unsupported technologies, and nonstandard tools that should give way to fewer, more standard systems. The cost savings come from simpler and consolidated procurement, as well as lower support and maintenance expenditures.

Securelinx advises choosing a single Linux vendor, be it Red Hat, Novell/SUSE or another vendor. This helps to avoid the problem of having patchwork systems that require substantially more time and money for support and maintenance, at the expense of budgets, new IT capabilities, and innovation. It may also be the opportunity to accelerate a move away from an expensive Unix platform. For a number of years we have observed migrations from legacy Unix systems, to Intel-based hardware coupled with a Linux Operating System. This duo provides a number of advantages. From the financial perspective – commoditized hardware reduces costs and puts the company in a good bargaining position, as it can play various hardware vendors against each other. From a staff perspective – the similarities between Unix and Linux allow, with little training, the transfer of existing skills to support the new environment.

Encourage reuse

Too many companies spend precious IT resources reinventing the wheel. A serious review of an existing project portfolio will probably uncover a number of opportunities to reuse existing solutions and build a common repository of services and solutions. The starting point is to learn what systems exist in the organisation, what application(s) they run, and what level of resources they consume. These apparently obvious questions often prove difficult to answer without historical data that tracks resource usage. A number of software vendors address this problem by offering solutions for availability and performance monitoring. The most popular commercial ones are OP5 Monitor, ManageEngine’s Applications Manager, or Solarwinds. There are also open source projects, lead by the long-established and highly customisable, Nagios.

Consolidate systems that do similar things

Different business units in the same company often have their own versions of essential systems, such as payments and Internet applications. Consolidating these systems at the corporate level can bring substantial savings and make processes simpler and more efficient. The effectiveness of the task depends on intra-departamental communication. In addressing each opportunity, the CIO and business leaders must evaluate trade-offs between short-term convenience and short- and long-term costs and complexity for company as a whole.

Knowledge of usage patterns we mentioned previously may (for example) identify candidates for virtualisation. Most of the commercial Linux vendors bundle virtualisation technology as a part of the operating system and even basic subscription options allow users to run multiple virtual machines on a single host. Consolidation of physical servers and applications increases server utilization, thus lowering hardware, maintenance and electrical costs. It may be done at the unit level, offering some savings, but the most gains from consolidation can be realised if it is agreed and supported at organisational level.