A Quick Guide to Achieving IT Efficiency in Enterprises
Many Enterprises have a bad track record of being able to manage their IT resources. This, in part at least, can be attributed to the prevailing wisdom among the management that IT department is a cost center, and not a value creation center. This troublesome predisposition has resulted in many a business heads going for large scale firing of IT employees, shutting down one of more IT divisions, and so on, when faced with the first signs of distress such as an economic slowdown. Apart from being highly detrimental to business operations, quality of services, employee motivation and client experiences, such decisions can be rendered completely unnecessary by ensuring that IT resources are always operating at optimal efficiency. Multiple strategies have been discussed here, which can achieve improved IT efficiency.
Improve Unit Costs
Unit cost is a robust financial performance metric that gives direct access to the problem area. Calculate the unit costs of key components of your service, such as costs of various devices, storage costs, computing costs, and so on. A quick comparison of these costs with the industry benchmarks will provide you a list of cost centers that need improvement. If they are already in line with industry standards, then any over exertion on this front may lead to overloading of such resources, and eventual compromise of their quality of performance.
Discover the Cost Elements
One of the most elusive financial metric for organizations is the direct vs. indirect costs. Assigning the costs of shared resources to various business units, departments, or products and services, is a daunting task, and, more often than not, can include human judgement. But we are more interested in the direct costs. Find the direct costs arising out of poorly utilized resources. By bringing about technological changes, and organizational changes, these resources can be shared by various business units, departments, or divisions to ensure that they are working at optimal efficiency.
Consolidate the Infrastructure
With decreasing costs of IT infrastructure, a trend has emerged among organizations, wherein they purchase hardware infrastructure, such as servers, every time a new requirement arises in terms of OS, interfaces, and suitability of servers for a particular application. This has resulted in such hardware being utilized at their least efficiency. One way of consolidating hardware infrastructure is through virtualization. This way, organizations can optimize their processes according to what is suited best for their applications, as well as reduce hardware to fewer and fewer machines. This can also significantly reduce the costs of power and cooling required by such infrastructure.
Improve Workforce Productivity
This is often the top management’s go-to solution for virtually every problem in the organization. In fact, this solution has been overused to such a degree that employees have come to loathe this strategy. It is perceived by employees that any attempt to improve productivity is management’s way of asking them to work more. However, this is not always the case. Low productivity has more to do with bad planning on the part of management, rather than any lapses in workforce commitment. For instance, roughly 2/3 of technical issues require about 24 hours to resolve, and there is little that the management can do on this front. For obvious reasons, the management tends to assign more resources to fixing that issue than may be necessary. Decisions like these are causes of highest inefficiencies in an organization. Check the industry standards for various organizational processes, and strategize your operations accordingly.
Make Forecasts on a Regular Basis
While it is a norm to have yearly and quarterly forecasts, develop forecasts at least on a monthly basis. Yearly budgets and forecasts leave little room for improvement during the ongoing year, unlike monthly forecasts. At least do some basic forecasts, so that you know where your money will be going in the future. This will help you allocate the budget is the right direction. Shortfalls can be reduced by taking money out of other “less important” areas, and surpluses can be assigned to important projects.
Reducing resources in a haphazard manner, is although the most sought after solution, hardly pays off in the end. Achieving IT efficiency prevents such accumulation of resources in the first place, rather than necessitating the reduction during difficult times. Contact the team at RAY ALLEN today to learn how our solutions and services can help you achieve that efficiency.