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Data centre cost control hints

Andrew Cross

IT departments have had to tighten up financially in the last 12 months. To keep in line with the measures taken by other departments, projects have been scrapped, staff cut and all purchases put under a magnified scrutiny. Although very painful, this has proved that cuts can be made and businesses can survive.

At a recent conference, James Stevenson, a Citrix vice president, outlined his interpretation of how CEOs viewed the next 12 months. Using the term "cost control," he contrasted this and the previous year's mantra of "cost reduction." Simply put, CEOs had guided their businesses through the storm and now wanted the lessons learnt to be continued in the future. Now more than ever, all expenditure has to be clearly justified and must bring defined and measurable value to a business.

IT departments and the data centre do not escape this. Much of the technical investment made is not understood by other business disciplines. Required expenditure will be challenged and need even better justifications. Being more proactive with data centre cost management and demonstrating in the board room that IT is taking this seriously will both assist the business financially and further bolster IT's credibility to other departments.

Reviewing my last three months' meeting notes with new and potential customers, some common areas of focus on cost control emerge.

Make data centre cost awareness an IT discipline
In the data centre, control or reduction of costs by your team can be a real challenge. Often the focus is on what is spent as a hard cost as opposed increasing efficiency through better use of time. Defining strategies and choosing products/services that better utilise time as opposed to simply increasing performance can contain costs.

Data centre cost control hint
When agreeing to data centre projects or work for your team, add a cost saving or control metric.

Consider using local suppliers
"Think global, act local" -- a cliché often banded around in the board room but not executed where it counts. Many local companies can provide more timely and cost-efficient services than globalised service providers. From their perspective, they may have been trying to trade with your company for years, so imagine how motivated they will be to please when you come to them.

Data centre cost control hint
Consider local service providers for both supply and engineering work. Manufacturer price support is made available to all accredited resellers, meaning a local and smaller supplier can provide the same products, often at lower prices. Where additional non-specialist engineering is required for holiday cover or project rollouts, the local IT reseller will often have skilled engineering available at a low cost.

Incentivise cost awareness
Creating a culture of cost awareness in the data centre can mean a challenging shift in attitude. Technologies that are more efficient to directly manage the server farm or manage the cooling and power will bring financial benefits to the company's bottom line.

Data centre cost control hint
Position cost saving on the same level of importance as performance. For justification, highlight the reduction in actual server performance achieved through virtualisation against the capital and operational expenditure savings.

Benchmark your savings
Introducing new practices, technologies or systems can bring definable cost savings. Certainly suppliers will be keen to share white papers demonstrating how others have made savings for the bottom line or seen a return on their investment. New internal practices bring time efficiencies, which in turn bring savings.

For you and your department, the only cost savings that matter are the ones in your department. Key Performance Indicators (KPIs) may already be in place for the business as a whole. Making those relevant to the IT department will help tie more closely the work of IT commercially to the business as a whole.

Data centre cost control hint
Apply KPIs to the projects and practices controlled by the IT department. Agree relevance with the finance department to ensure these measurements are tight with the strategic KPIs. On a regular basis, report them both to your team and your board.

Review your supplier list
Finding the balance between value, cost and availability from suppliers can always be assisted from a simple review. Naturally, a supplier list can grow. For example, introducing specialists for a specific project and tasking them with the provision of the total solution (i.e., hardware, software, installation, maintenance, etc.) can introduce them to commercial opportunities outside of their original remit.

Specialisation works, as does consolidation. Achieving the right balance is the challenge. For example, a Microsoft Select Licensing Agreement can be sourced from several Microsoft Large Account Resellers (LARs). Beyond guiding you through the maze of available licensing, the LAR's value is often limited to promptly processing licensing paperwork. As these are necessary purchases and are from a single supplier, costs can increase without challenge.

Data centre cost control hint
Work with the purchasing department (if the discipline is separated) and review the supplier list. Establish where purchases can be consolidated and conduct a short review of supplier costs.

Build long-term practices for data centre cost control
The last 12 to18 months have forced reviews of practices to save costs and bring additional value. Many of those practices addressed areas that were previously deemed lower priority or less important. What has emerged is a fresh or revised attitude to cost awareness, and this approach can continue to bring bottom-line benefits.

Data centre cost control hint
Where newly introduced or revised practices have brought benefits, keep them and ensure they are cemented into daily use.

Communicate success
In the busy world of IT, communicating success at all levels can often be forgotten. At board level, reporting an agreed set of metrics gives IT the opportunity to report on a regular basis. However, that success was produced by the team beavering away in the back office. Although the annual HR review process allows for individual review discussions, a short and regular department meeting to highlight an individual or team success cements the feeling of appreciation.

Data centre cost control hint
Highlight data centre cost awareness successes at both board and team levels. Acceptance of those successes at board level will bring credibility. Recognition of achievement at team level motivates pride and helps cement cost awareness into approaches on future projects.

Don't data center cost awareness slip when the storm subsides
This recent period of economic history has, for those fortunate enough to survive, taught several lessons. From a CEO's viewpoint, they have seen the IT department instigate changes that have brought cost reductions.

To achieve this, changes have had to be made. These changes have, in many cases, sharpened the commercial awareness of the IT department, which will bring longer-term benefits to the organisation.

Data centre cost control hint
Keep and build on these improved practices. CEOs are increasingly looking for data centre cost control, not cost reduction, and much of the hard work required to achieve this may already have been completed.

Andrew Cross is the sales director at reseller Sol-Tec and a contributor to SearchVirtualDataCentre.co.uk.


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