A Fresh Approach to Reducing Lights-on IT Costs

The pace of digital transformation is accelerating, as businesses look to fully harness the potential of technology to enable deep and lasting changes in their organisations.

But for many IT strategy leaders, the grim reality is that they will have to deliver significant cost savings from across their existing applications and infrastructure landscape in order to release funding. 

Many businesses have spent decades trapped in the “70/30” position, of spending 70% of their IT budgets on running and maintenance costs with just 30% left to invested in new projects. Outsourcing, offshoring and centralization have helped them to deliver some gains in reducing “light-on” costs. But this has often been offset by the constant expansion of the technology environment, as new apps are developed, new cloud services spun up, and new layers of integration and custom development are added to the mix.

Cloud-based services have helped many businesses to transfer the burden of physical infrastructure maintenance and operation onto their vendor. But the challenge that many face as they migrate increasingly critical workloads to hybrid cloud environments is to ensure that the move towards on-demand resources doesn’t result in unwelcome cloud bill shock – and that the management costs relating to orchestration, security and performance don’t go through the roof. A recent survey of leading businesses by industry analyst firm teknowlogy Group found that budget management was seen as a key challenge to their hybrid cloud strategies by more than three quarters of senior IT and business decision-makers.

Many IT leaders are scratching their heads as to how to deliver the next level of cost savings, having already made the big plays such as data center consolidation, and they are already paying commodity rates for areas such as legacy applications maintenance or desktop support. But we are seeing a growing number of leading organisations rethinking their approach to reducing their operational IT costs by putting simplification and automation – rather than arbitrage - at the heart of their optimization strategy.

Here are four ways in which enterprise IT functions can optimize operations costs in 2020 in order to reinvest in more strategic projects. 

Leave cloud management to the robots. Businesses have been trying to wrap their arms around the sprawl of cloud services since the middle of the last decade, when the tactical adoption of hyperscale platforms across different departments truly exploded into life. Technology leaders have tried to tackle this in a number of ways, including the implementation of orchestration platforms or partners to give them greater visibility on expenditure. But tools are now available that help to automate key aspects of the governance process, such as scheduling the right level of cloud resources to become available at the right time to support workload demands. These tools are increasingly not just focused on the infrastructure layer, but can also help to drive automation across the application stack as well. Tools vendors such as Yotascale, Turbonomic and Cloudsqueeze are increasingly leveraging machine learning to make this automation smarter, and the platforms themselves also offer analytics and visualisations (AWS cost explorer, Azure cost manager). 

Get smarter about service management. The concept of IT service management (ITSM) is going through a step change as artificial intelligence starts to make its mark. CIOs have used ITSM platforms to help them run, monitor and repair their environment in a more efficient way. But many have struggled to apply automation to end-to-end processes, due to the siloed way in which they run their applications, data centres, devices, security and networks, each group running a plethora of different task-based automation tools focused on specific aspects of service management. Many use multiple tools within the same silo, which makes it difficult to get a single view of overall end-to-end performance. Many companies are now looking to reduce the time they spend on pinpointing the root causes of incidents by leveraging platforms that can both provide them with this insight, but can also help them take a more preventative approach. Intelligent service management platforms can retain operational knowledge in intelligent objects, and by using continuous machine learning, can identify potential issues before they occur. 

Enhance DIY support in the Workplace. One of the most mundane and costly tasks of the IT function is supporting workplace devices. Many businesses are trying to provide a deliver an improved user experience through offering more diverse devices and services to support increasingly flexible working patterns, which is posing a challenge to the support team in terms of maintaining or improving quality of service, while staying on top of cost of delivery. Amazon has shown how the provision of a high-quality customer service at low cost is possible through the use of self-service options and the automation of service routines based on deep analysis of user data. Similar models are entering the mainstream of IT support in 2020 with web portals offering a wide range of smart, self-service options – which could include links to relevant video guides on YouTube, as well as chatbot services – easing the burden on the traditional helpdesk. 

Rethink security defences. Protecting against a growing and increasingly sophisticated cyber threat landscape is a hugely important and costly aspect of any IT strategy. But for many businesses, it may be time for a rethink in how they tackle this issue. Adding layer upon layer of perimeter defences  has created a substantial licensing burden, and typically provides users with a poor experience as they are forced to navigate multiple password barriers in order to access key systems and data. A growing number of CISOs are putting the user at the heart of the next phase of their cyber strategies and exploring how biometric technology, and contextual and behavioural analytics can help them break the cycle of perimeter accumulation while delivering a better and less intrusive user experience. 

The blog first appeared on DXC's Thrive thought leadership platform.