by January 1, 2009 0 comments

During good times, when business is booming, organizations are in a frenzy to
ensure that nothing gets in the way of their growth. They expect the IT
infrastructure to deliver whatever it takes to support the business on its
upward movement. So generous investments are made in IT to ensure that it can
scale up to support the business, and IT budgets continue increasing. CIOs are
busy implementing new projects, evaluating new technologies, and negotiating new
deals. They seldom have time to worry about the growing IT infrastructure
complexity, causing inefficiencies to continue creeping into the system, and
bloating the IT budgets. And then the tides turn and markets see a slump, making
panic and disorder order of the day. Talks of manpower retrenchment and IT
budget cuts become more prominent than anything else.

For those new to this phenomenon, it sounds like the end of the world, but it
really isn’t. Market downturns and upswings are a part of the economic cycle and
continue happening. We just have to know how to deal with them. The good news is
that with every economic downturn, we have newer and better technologies
available to deal with it. So, this time’s no different. In fact, organizations
today have access to far more technologies than ever before to combat the
slowdown, and in this story, we’ll look at some of them. Plus, we also
interacted with CIOs of leading Indian enterprises to understand what they’re
doing to combat the slowdown.

Cost Savings in Data Centers

Virtual is Real… Well Almost

VC: Now More than Ever

Time to Embrace UC

Combating Slowdown with IT

Saving with Server Virtualization


First identify the budget sappers
Before you can start identifying technologies to combat the slowdown, it’s
important to identify the budget sappers. You have to analyze which areas
consume most of your IT budget. Broadly speaking, in today’s scenario, these can
be divided into the following five areas:

OpEx and CapEx: OpEx is perhaps one of the biggest budget sappers.
OpEx or Operational Expenses are costs incurred to manage the IT infrastructure.
In many cases, these can consume 50% or more of the IT budget. They comprise of
manpower cost, recurring software license fees, and service charges to various
service providers like ISPs, telecom, or managed services providers. Then of
course, there are the regular maintenance costs and other costs like printing,
paper, etc. OpEx costs are the most difficult to cut down because they’re more
difficult to predict. If your service provider suddenly increases his monthly
fee, then it has a significant impact on your OpEx.

The other major chunk of an IT budget are the Capital Expenses. These are the
costs for implementing new IT projects or for purchasing new hardware, software,
and services. During an economic slowdown, it’s very easy to reduce the CapEx
because their costs are fairly well known. The difficulty lies in reducing your
OpEx because it’s divided into so many elements.

Tips to save
costs and improve productivity
Don’t send email attachments to
multiple people:
Don’t forward huge attachments to multiple people,
especially if they’re in the same office. Instead, save them on a central
location and simply mail its link to others. If everyone is on a LAN, then
save them on a shared server directory. If they’re spread across different
geographies, then upload them to a FTP site.

Save paper: Don’t take
unnecessary printouts. Resort to digital communication as much as possible.
Don’t throw away prints that are useless. Use the clear un-printed side as a
notepad or print on both sides of the paper.

Infrastructure Complexity: We just talked about this in our intro, and
yes it’s another big budget sapper. As you continue deploying new hardware and
software for new projects, the complexity of your IT infrastructure increases.
Lots of servers, multiple operating systems and databases, runaway storage
capacities, are just a few things that have to be managed. These obviously
affect productivity and increase chances of downtime. So you need solutions to
simplify the infrastructure, possibly by reducing the number of servers,
databases, and Operating Systems and optimizing storage usage.

Power: This may not sound like much, because it’s usually not the
CIO’s responsibility. However, if you start doing the numbers, you’ll realize
that IT consumes a significant part of your organization’s electricity. And
sadly enough, there are plenty of places where IT’s wasting a lot of power. So
you need technologies to control this wastage. Thankfully, there are plenty of
them, which can lead to considerable savings.

Travel: This doesn’t just apply to the IT team, but to the entire
organization. Every company incurs significant travel expenses. Given today’s
congested roads and delayed flights, traveling is becoming increasingly
difficult. So there are obviously technologies available to reduce travel.

Manual processes: Despite having so much of IT, there would still be
processes that need to be done manually. Even today, having an self-managing,
self-healing IT infrastructure is still a a distant dream. There are still so
many tasks that an IT manager has to perform manually. The same goes for the
rest of the organization as well, so technologies are required to automate as
many manual processes as possible.

Technologies to handle budget sappers
At a time when IT budgets are being slashed, the most logical thing to do is to
optimize the existing IT infrastructure. This is the time to study your IT
infrastructure and see how to extract the most from it. There are several
technologies available for the job, and we’ll devote the rest of this story
talking about them. Before we do that, it’s important to understand that cost
savings are not attained by cost cutting alone. In order to achieve some cost
savings, you might actually have to invest in certain technologies. You just
have to be able to evaluate the cost savings vs the upfront payment that you

Use SaaS wherever feasible: Till now, Software as a Service had been
considered mostly for SMBs. However, with the economic downturn, even larger
enterprises could consider using certain types of services to save costs.

Use more digital communication: Instead of picking up the phone
and calling people everytime you want to talk to them, try sending them
emails or bringing them to an online chat session. This can help if the
people you need to interact with are located in multiple geographies. Of
course, at this stage you might also want to evaluate using IMs for voice
communication and weigh the savings against bandwidth consumption.

Encourage working from home: Many MNCs have already introduced
this culture in their organization to save costs. Maybe you should also
evaluate it. Maybe the sales team could be kept out on the field and made to
report in office once a week. Or the marketing department could work out of
home with a good Internet connection.

Bring your own laptop: Some organizations even encourage employees
to bring their own laptops into the organization. This way, they don’t have
to purchase additional hardware for them.

Re-negotiate existing SLAs: If you haven’t done this till now,
then it’s essential to get cracking on it. Just as your organization would
be taking measures to retain its key customers, your vendors would also do
every possible thing to retain you (if you’re important enough for them).
So, this is the perfect time to re-negotiate existing contracts and SLAs,
and try to get more for the same amount that you’re shelling out to your

Use Open Source and free software: This point is always debatable
because there are pros and cons to using either commercial, open source, or free
software. So at the very least, you first need to get a broad idea of the
definition of each. Commercial software, as the name suggests is what you have
to pay for, and you usually purchase licenses for it as per your requirement.
Open Source software, by its definition implies that you have access to the
source code of the application you’re deploying. This can help in situations
where you’d like to modify the application as per your requirements. Open Source
is not necessarily free. You will definitely have to pay for its support. If you
use open source software that can be freely downloaded from the Internet, then
you’ll end up spending on providing support for it. So, if your existing IT
manpower has never used it before, then you’ll need to invest time and money in
training them. Once that’s done, you’ll end up training the users to use it.
Nevertheless, Open Source and free software can be considered as a good option
during the slowdown to avoid large upfront initial investments.

Outsource your server room: One option that is becoming popular is to
outsource your entire server room infrastructure to a data center, and access
everything remotely over a leased link. You save the cost of real estate for
setting up and provisioning for a server room. You save on the cost of manpower
to manage it. You also save a lot of other direct costs, such as power
consumption for IT equipment, air-conditioning, etc. As data centers are built
for 24×7 operation and very high uptimes, you’re unlikely to face a hardware
failure. Hence, if you’re a mid-sized or small organization, then you might like
to explore this as an option to cut your costs.

Desktop management: This is one of the biggest operational expenses in
an organization, and also the most troublesome with users screaming blue murder
every time the help desk delays resolving their problem.

What you need to look for is software that can help resolve it. Reduce calls
to the helpdesk by making your service desk more efficient. Ensure that all
employees turn off their PCs when leaving home from work. Not only that, but
also make sure they switch off the main switch where the PC has been plugged in
so that all devices connected to the PC are turned off. Usually, one sees
monitors in sleep mode, or mice with fancy lighting inside them turned on, even
though the PC has been shut down. All of this wastes a lot of electricity and
should always be avoided.

Use CCTV cameras: This comes in handy for more than security. You can
use it to keep a tab of your employees to see who’s taking how many breaks,
spending more time than usual on the phone, etc. It leads to productivity

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