Cost optimisation

Cost optimisation is a business focused, continuous discipline to drive spending and cost reduction, while maximising business value 

Digital transformation is picking up speed. It’s driving IT organisations to rethink their strategies and focus more on customer engagement and disruptive business models. As IT organisations review their strategies, they need to optimise inefficient processes and reduce burdensome costs. On the other hand, enterprises are looking to IT organisations to drive business growth and transformation. Gartner predicted that in the next few years, at least 75 percent of the enterprises should be able to reduce their annual infrastructure and operations run costs by 25 percent or more through scrutinising every asset. Reducing annual infrastructure and operations run costs is a start but cost optimisation is not just about reducing expenses, IT organizations need smart new strategies helping them to eliminate waste and improve efficiency. 

Are IT organisations making the most of their existing capacity? 

One of the biggest problems faced by IT organisations is matching supply to demand. Too much resource results in wastage, while too little causes frustration for the business and a headache for IT. Very often IT organisations do not know how its server capacity is being used. The tendency of many IT departments to err on the side of caution by buying more server capacity than is needed means that wastage is at a time when budgets are tight. At the same time, some firms run critical applications that cannot be allowed to fail, so too little capacity would prove disastrous. In an ideal world, there would be little, or no wastage and capacity would always be enough to meet demand. Implementing capacity management tools enables you to help manage capacity more efficiently.  

Adopting capacity management for IT and the business 

A key part of capacity management is determining the service level agreements (SLAs) of the business. It’s essential to identify which systems do which work, and to quantify users’ expectations for how the works get done. IT staff should be analysing the current capacity of their systems and determine how well they are meeting the needs of users and decide whether they can reduce capacity in some areas or add it in others. IT staff has got to know their assets and the business needs. Business and IT goals should be as closely aligned as possible so IT organisations need to have a good accounting of both before starting any changes that may impact the business. It is important to measure the success of the capacity planning work. It’s about the right kind of metrics to measure whether it’s achieving IT goals, meeting business needs and if SLAs are being met. 

Does capacity management deliver results? 

Data centres represent one of the biggest costs for enterprises, both in terms of capital and operational costs. In a 2006 Gartner study found the average cost of running an enterprise data centre was about 5.3 million dollars a year. In many cases a substantial amount was spent unnecessarily. Servers rarely run at capacity, but the temptation has always been to purchase more capacity than necessary. This is particularly true in the financial services sector where the effects of downtime are potentially disastrous. By using a capacity planning system an IT organisation can possibly avoid spending money on new hardware. Where systems may be struggling under heavy workloads IT staff, using capacity planning software, can identify the problem.  In some cases, it could be a single resource-intensive application causing the issues. Using capacity planning software IT staff should be able to resolve the problem quickly by making changes to the application without the need to purchase additional hardware.  The introduction of capacity planning systems have resulted in a long-term beneficial change in the way the business and IT relate to each other. Because capacity management requires the business to be clear about its requirements, the result is that business decisions are much better-informed about the performance of their environments.  

Capacity Planning for Infrastructure and Applications 

With ITRS Capacity Planner’s growth modelling capabilities and predictive analytics IT organisations can be sure they have clear insight into supporting infrastructure requirements. ITRS Capacity Planning can complement your APM investment by providing predictive and prescriptive analytics to quantify the impact of business or infrastructure change on your application performance helping you to ensure customer experience is maintained at the level the business expects.