Simplify & Save

Coming next week we’ll be adding additional categories to the blog so you can easily find the information that is most useful to your organization as you prioritize projects and IT solutions that will drive real returns and savings. One strategy we know will help eliminate OpEx is virtualization. Here is some recent information from our Small Business and Inside IT blogs you might find useful. You can also visit www.dell.com/virtualization for a host of information and case studies.  

• Small Business Tech Tip: Virtualization for SMB
• Virtualizing Servers? Look At Consolidating Your Storage
• Dell Ups the Ante in Virtualization
• Small Business Cost Saving Tip: Go Virtual to Reduce Expenses
• Our big virtualization mojo

Last week, Gartner put out a list of 20 ways IT execs can slash expenses. You’ll see some similarities with what Michael addressed in his post, and many of these topics -like virtualization, storage, VoIP and video conferencing, software licensing and management- we’ll hit on in much more detail in future posts.

Over the past several months we've addressed many of these topics on our other blogs (Inside IT, Small Business, Channel) which we will share again here to help you prioritize and make important IT decisions.

From Network World:

ORLANDO - In tough economic times, all enterprise departments are required to tighten their belts. To help IT execs navigate through the cost-cutting maze, Gartner analysts Wednesday presented a list of 20 ways that IT execs can slash expenses.

1. The most obvious place to start is people costs. Gartner estimates that 37% of the average IT budget is dedicated to personnel, so this represents a major opportunity to save money. Gartner recommends a blend of hiring freezes, reducing or eliminating special bonuses, cutting back on outside contractors. Also, global companies that have opened offices in remote areas should consider bringing those workers back home
2. Flatten the organization. Instead of having one person manage six or seven employees, trim some of that middle management and have your IT execs manage more like 20 people. A flat organization not only saves money but also can lead to more efficiency.
3. Move to shared services. In other words, consolidate things like help desk into one group that services the entire company.
4. Even if you have to borrow somebody from another part of the company, bring a finance person into your leadership team so that person can analyze your budget and find ways to help you trim costs.
5. Don't ignore "unmanaged" costs like printers or data center power.
6. Go back and check your invoices to make sure your vendors are charging you what your contract specifies. An example would be if your wireless vendor agreed to give you free shipping when it sends new cell phones to remote workers. A few months later, shipping charges might start appearing on your cell phone bill, and if you don't check, you'll never know.
7. Eliminate unused software and modules.
8. Get tougher with vendors when it comes to negotiating contracts. Don't be afraid to switch vendors, or at least go the first step of determining what it would cost to switch.
9. Buy a telecom expense-management service. It pays for itself and more.
10. Deploy a corporate-wide plan for buying cell phones. Then, buy a cell phone plan that optimizes expenses. This will be cheaper than letting employees buy phones and plans and then expense them.
11. If there are places where you don't need five nines of availability, settle for three nines. It will save you money when you negotiate with your vendor.
12. Consider buying a videoconferencing unit rather than constantly renting.
13. Where possible, use the Internet as a replacement for expensive WAN transport services.
14. Defer moving to Vista. If your PC hardware is holding up, consider sticking with it another year.
15. Use commodity products wherever possible, and skip best of breed in cases where "best of need" will suffice.
16. Consolidate and virtualize servers.
17. Reduce storage costs via data deduplication and other methods.
18. Use better processes and policy to make better use of existing tools.
19. Deploy IP telephony and VoIP as a way of cutting costs for moves, adds and changes.
20. Harvest unused software licenses and reuse them when a new employee makes a request.

To build on the advice Dell’s CIO and IT leaders shared with Michael as part of his post last Friday, I sat down with a former IT Executive who now runs Dell’s IT Simplification consulting practice. Here’s what Kris Fitzgerald had to say.

As a former IT Executive, anything else you would add to the list of how CIOs are responding in today’s economic climate?

As a CIO, you must always continue to look at items that enhance business value. Lowering costs and improving agility improves the company. In today’s world, IT is no longer just a cost center, it should be a key business enabler, creating strategic advantage for the organization. This is especially critical in trying economic times.

Is there a best way to prioritize IT projects, or is it really based on the business and its needs?

Prioritization is always linked to key business drivers. If, based on the economy, the priority is cost savings, then look at these areas first, even if this means slowing projects that would grow the business. Within that, you should prioritize projects that have a proven ROI. We can help customers understand which projects have been successful in other organizations and are more likely to deliver the returns they want, de-prioritizing projects that have historically been more challenging for others. But not all businesses have cost saving as their No.1 priority (even though it is usually in the top three). Some businesses may utilize these times to make acquisitions. As such, there may be other key IT projects to consider (for example, a focus on integrating and consolidating systems).

Consulting sounds expensive and possibly, something that might get cut first in trying times. How does a company justify the upfront spend?

Consulting, without measurable objectives or targets, can be unproductive and expensive. Consulting needs to be an accelerant, with a clear value assigned – that matches the priorities of the company concerned. 

When it comes to justifying upfront spend, we need to ask the CFO would he spend $200,000 to save $1,000,000? Over a 6 month period or over 2 years? The key is the length of time to realize the benefits. Typically, if the projects are self funding within a 12 month period, companies find a way to embark on these projects. If pay-back is two years or more, you might not want to start the project now. For example, server consolidation can quickly optimize budget for server costs as well as immediate savings in power and cooling.

Does consulting always require new product or services purchases?

No. Each consulting project must stand on its own, delivering distinct value to the customer. For example, one key program offered by Dell today is IT Simplification. This program looks at ALL areas of the customer enterprise, from the desktop to the data center, to identify opportunities for savings and improvements in speed of IT delivery. The outcome from the assessment does not include any hardware recommendations, but provides customers with a “blueprint” of actionable projects to improve the way they provision and manage their IT environment.

What is the average cost of IT Simplification consulting?

The approximate cost is $50K to $200K dependent on customer objectives and project scope. As an output to these assessments, we typicallyidentify 5x to 10x of this cost in annual savings for the customer.

What are customers saying about the insight your team provides?

In working with a large university, the CIO said that after partnering with Dell for the IT simplification assessment we knew more about their IT than they did, and have become one of their key strategic partners, enabling them to grow in the future. In doing this for another large commercial customer, we helped prioritize projects and started several key IT projects critical to their organization’s ability to provide a higher level of service to their enterprise.

So tell me more about the kind of people you have on the team?

All the IT Simplification assessments are delivered by seasoned IT executives with an average of 30 years of IT operating experience. These executives are not consultants by background, but operational experts with a strong drive and passion to help customers improve their IT operations.

What size businesses do you serve?

Typically, companies with 1,000 to 20,000 employees. There are always exceptions to the rule – for example, smaller companies where technology is their primary business. Also, younger companies, even large ones, may not need these services because they’ve been doing it right from the start. Most of our customers have been in business for 10 years or more. We recommend contacting Dell to see how the IT Simplification program might apply to you.

Is there a No.1 thing a company can do to simplify and save with IT now?

First, stop doing things that are unnecessary. Some complexity is valid and may create competitive differentiation, but unnecessary complexity is just a drain on resources. Simplify everything you can. From how you engage with business stakeholders to how you develop applications or acquire and operate your IT. People over time have created processes that might have made sense then, but not now. Consider how you spend your time and identify and eliminate unnecessary tasks and projects and simply what you are doing.

For more information on Dell’s IT Simplification consulting services click here. And stay tuned for a Vlog featuring Kris that will post here and on our Inside IT blog soon.