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10 tips to reduce the burgeoning IT costs, to a cheaper, better IT

I just read an article from Nicholas Carr and I like it enough to reproduce it here. How to cut on IT budgets and still have the computing capabilities a company needs?


Here are the shortened Ten tips for reducing burgeoning IT costs and the move towards a smart IT management to get more for less.

  1. Consolidate: Studies show that about 75% of the power of the average corporate server is wasted. Data storage systems aren’t much better, with capacity rarely more than 50% utilised. So, consolidate the servers, databases, and even entire data centres. Think of an optimized set of 2 servers instead of 5.
  2. Virtualise: Replace hardwares with softwares. Since all modern computing gear, from microprocessors to databases to firewalls, operates through digital instructions, they can often be “emulated” with software code. You can, for instance, use a single server to run many “virtual machines”, thus reducing hardware expenditure.
  3. Open Source: This is a no-brainer here. Although open source applications won’t be right for every company, they can be more simple and less expensive to run than proprietary programmes. It is also not just about the price but about the economics, business and not to mention scalability. If for instance you have a startup – it will be extremely hard to find a buyer if you’re running .NET applications than running PHP or Java.
  4. Buy software as a service: Smaller companies may soon be able to fulfill all their software needs over the internet. Google already offers corporate email, calendars, website hosting, blog hosting, and even spreadsheet and word-processing software as utility services. The days when small businesses had to run their own servers for email and other basic applications are rapidly coming to an end.
  5. Buy hardware as a service: One of the leading providers of Hardware as a service is online retailer Amazon, which has opened up its computing systems to outside companies – think Amazon S3. For a low, usage-based fee, IT firms can store their data and run programs on Amazon’s machines.
  6. Think thin: Rather the Thin Client paradigm where the personal computers are stripped down network terminals which draw their software applications and data from central servers. Thin clients are cheaper than PCs, but the real cost savings come from lower maintenance and upgrade costs.
  7. Conserve power: User energy-efficient equipments. Employees leave their PCs on overnight, often running screensavers on their monitors; this wastes a lot of electricity. Just shutting off these machines when not in use can produce big savings—and helps the environment.
  8. Offshore work: Among the biggest IT costs of all is salaries and benefits. Shifting jobs to countries with lower wages continues to offer cost cutting opportunities.
  9. Avoid customisation: I’ve experienced and learnt from this one, this waste lots of time. Customisation also increases complexity, which can push up maintenance costs and make collaboration with business partners more difficult. So, don’t try to be innovative for the wrong cause.
  10. Procrastinate: Procrastination is bad for everything else except spending money. Companies that steer clear of brand new software reduce their chances of being saddled with buggy technology. They can also learn from the successes and mistakes of early adopters, enabling them to avoid unnecessary costs and often build better systems as well.