The economy is finally showing signs of a turnaround, but IT spending is still tight. You've already made a few rounds of budget cuts and postponed projects, so what more can you do?
Now the trick is not in deciding where else you can trim expenses, but in wisely using available funds to improve service levels while creating a structure that provides long-term savings. Here are some tips for making smart IT investments.
1. Upgrade based on performance.
How often should you upgrade equipment? Unless older network equipment is creating a bottleneck, you may be able to put off buying new gear for a few more years. "Core routers and switches have become a mature technology approaching a five-year useful life," says Gartner analyst Lawrence Orans. "Server load balancers and Web site technology, on the other hand, have a two- to three-year refresh rate."
You should also take longer equipment life spans into account for leasing contracts to reduce the monthly payments.
However, Gartner still recommends a three-year refreshment cycle for PCs, finding that this reduces companies' total cost of ownership.
2. Tap vendors.
Vendors can often bring in considerable expertise based on hundreds of similar implementations. On occasion, that wealth of experience can be translated into an offer you can't refuse.Take the case of Orange County, California. When its data center management outsourcing contract was set to expire last year, the county went through a request-for-proposal evaluation process. The organization considered several outsourcing arrangements in addition to transitioning services back in-house and in the end decided against regaining that responsibility.
IMS, now part of Affiliated Computer Systems, won the 10-year, $260 million contract by devising a way to turn the data center into a revenue source using 15,000 square feet of excess space. Under the agreement, IMS rents this space from the county, using it to serve other clients. Because the data center must operate around the clock but the county's IT employees aren't always fully utilized, those staffers serve other IMS clients, and the outsourcer pays the county for their time.
"With the revenue sharing, we are bringing into the county a significant revenue stream that we would not have been able to do if we had brought the operation in house," says Leo Crawford, assistant CEO of IT for the county. "This will help reduce the cost of providing services to county departments and agencies."
3. Help the help desk.
In 1996, the average help desk supported 25 applications. Now that figure is 200, according to Gartner analyst Kris Brittain. Therefore, few companies can do without help desk management software. These suites provide online data repositories to speed problem resolution, analysis of common problems and service-level tracking. Many also utilize the Internet and self-help functions for greater efficiency.
Harrington Plastics in Chino, Calif., started using Epicor Software's Clientele help desk program two years ago. "By moving toward a Web-based application, it keeps traffic down on the network and cuts down on phone calls," says David Arnold, systems engineer. "Users can go online and see how to solve their own problems."
Brittain says that implementing such help desk applications with a built-in self-serving database can reduce support costs from $50 to $60 per call down to $10 to $14.
4. Save space.
In addition to the price tag, equipment expenses include the space and electricity to run and cool the gear. While this money doesn't come directly out of the IT budget, the cost of renting more space and adding an extra air conditioner can pose another barrier to expanding server capacity.One option is to choose a rack-dense "pizza box" server or server blade system from vendors such as Compaq, Dell, Egenera, Hewlett-Packard, IBM and Sun. For example, the Compaq Proliant BL server line lets 200 to 300 servers fit in a single rack, instead of the normal 42 1U (1.75-inch) servers. These servers consume approximately one-fourth the power of a traditional server.
The Air Force's Center For Research Support (CERES) at the Schriever Air Force Base near Colorado Springs, went with dense servers when creating a storage-area network last year.
"We're not a large facility, nor do we get a lot of money every year," says Paul Barbara, CERES site manager for Lockheed Martin Mission Systems, which runs the site for the Air Force. "We have to cram a lot into a very small space and look at the bottom line."
Lockheed implemented nStor's NexStor 3150 servers, which fit eight 73G-byte hard drives into a 2U (3.5-inch) form factor. In this way, the center fit more than 1.5 terabytes of storage into 10.5 inches of rack space and can add another 7.6 terabytes to that rack as needs expand.
5. Put clients on a diet.
Some corporations are reverting to the mainframe model, moving applications off the workstation and onto the server. One advantage of the thin-client model is it extends the life of existing workstations or lets PCs be replaced with low-maintenance thin-client terminals. Along with hardware savings come reduced support and network costs.
Last November, Mike Haggerson, director of clinical IS for Detroit Medical Center, moved his 9,000 end users to a thin-client operation using Citrix Systems' Metaframe software. Hospital employees were using a 180M-byte application loaded on their hard drives to pull data from a several-hundred-terabyte medical records database.
"I had grown tired of managing it," he says. "Support was a nightmare." He set up an 80-server farm to centrally host the application, rather than having to support it on thousands of PCs.
Switching to a thin client cut bandwidth usage by two-thirds, eliminating the expense of future upgrades.
Robb is a freelance writer in Los Angeles specializing in technology issues. He can be reached at drobb@mediaone.net.
