Vendor View: Three steps to lowering IT costs

Storage is the number two budget item in data centre infrastructure, and will therefore be on the radar of cost cutting executives. In order to prepare for almost inevitable budget cuts or freezes, CIOs must take pre-emptive measures to reduce storage costs while ensuring they have the infrastructure required to support the organisation’s return-to-growth strategy.

According to a recent Gartner report, IT departments should be focused on cost optimisation programs rather than cost cutting exercises. This means looking at ways of saving money through process improvement and better integration of IT into the business in a way that will enable innovation and future growth. Breakthroughs in optimisation will also include deploying new technology to permanently reset your cost structure at a lower level.

There are three key steps CIOs should take when determining how best to cut costs. First, determine which projects can be cancelled outright and then which projects can be deferred until economic times improve. This is also the time to look at ways of optimising vendors to reduce costs. For the projects you want to champion, it is vital to identify and remove operational redundancies to get more value from existing storage expenditures while deploying new technologies to maximise data storage in the least amount of space.

1. Cancel or defer projects

The first step when assessing how to reduce costs is to carefully scrutinise any planned projects and determine if they meet the organisation’s current business needs.

Decide if the project provides a quick and tangible return on investment. In the current economic climate, hard costs savings that can be achieved within a budget cycle of a quarter or a year will be much more persuasive than those that provide ROI across a longer time frame. Projects that result in cost avoidance, such as deferring the need to build an expensive new data centre, are at the top of the approval list.

The total cost of ownership should be assessed for the life of the product or solution, rather than just the purchase price. The project should also be reviewed to see if it supports the overall short- and long-term business goals and fits within new IT budget realities.

Only when these questions have been answered can you determine a project’s viability. If the project doesn’t meet the criteria, it should be cancelled.

You may find that upon assessment of future projects, many meet the majority of the criteria necessary for approval, but still do not fit within current budget realities. These projects should be put on hold until budgetary conditions improve.

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