Your CFO probably doesn’t have a thorough understanding of what occurs in the data center from day-to-day.
That’s okay. It’s not your CFO’s job.
But that means, when you need budgetary approval for upcoming IT projects, you might need to make a case for other cost optimization strategies before you can make your new budget pitch. To address this need, Gartner, in its guide “IT Cost Optimization Principles” shares best practices for how to optimize your IT spend and maximize business value without compromising production. Gartner’s answer? Third-party maintenance.
Gartner’s IT Cost Optimization Principles
In addition to conducting over a decade of IT cost optimization research, Gartner also analyzed the “results of multiple national and regional recessions [and] the Great Recession” to establish a practical methodology for IT leaders and staff to follow. These principles are based directly on the guidelines that Gartner follows when establishing the most cost-effective solution, vendor, technology, etc. for their industry reports.
IT Cost Optimizations Require Financial Transparency
Before you can effectively optimize IT costs, Gartner stresses that companies need to have full budgetary and transactional transparency across the enterprise. In its guide, Gartner explains that IT Cost Transparency is more about creating healthy IT policies, actions, and behaviors “that enable fact-based visibility into IT costs.”
This transparency fosters responsibility and accountability as well as providing a platform for more accurate documentation and analysis of IT resource allocation, IT per-unit costs, market inhibitors, and future demand.
Transparency enables IT leaders to make the most informed decisions possible concerning initial and recurring IT costs, as well as predict the realistic benefits of upcoming IT projects.
IT Cost-Cutting and IT Cost Optimization Are Two Very Different Concepts
Cost optimization is a disciplined methodology meant to reduce spend while cultivating business value over time. However, cost cutting is a one-and-done method, conducted on a case-by-case basis. Rather than aiming for consistent percentage savings, cost-cutting reduces precise amounts of spend by a certain date.
Cost-cutting may provide relief for a specific project at a particular time, but if you want to have consistent savings to rely on when you pitch your next initiative to your CFO, IT cost optimizations are the most sustainable answer.
Participating companies that implemented these cost-optimization protocols from Gartner consistently reported that:
- Gartner’s protocols helped to formulate and directly impacted company culture, beliefs, and behaviors.
- Employees were able to better self-manage daily responsibilities.
- CIOs were more likely to receive executive support when proposing complex or controversial IT initiatives.
While Gartner goes on to make more holistic arguments about how these principles benefit the company as a whole, we will continue our focus on IT specifically and how you can begin to practically apply these methodologies to your own IT processes.
Practical Application in Your Environments
We have found that one thing that immediately helps our clients in their cost optimization efforts is adopting Third-Party Maintenance solutions. TPM is not a cost-cutting move; it is a sustainable, repeatable practice that provides consistent cost optimization benefits in your physical environments.
Not only does TPM provide general cost-savings over OEM support, it also enables you to extend the support life of your hardware, without the hefty price tag. Additionally, switching to TPM can deliver a better 24x7x4 SLA for your business, limiting costly downtime.
By reducing your maintenance costs by 40-80% each month, TPM provides a framework for consistent, predictable savings into the future.
Want to learn more about immediate, sustainable, cost-optimization results? Download this free CentricsIT datasheet to compare IBM, NetApp, EMC, and TPM costs.