JUNE 7-10, 2010 | NEW ORLEANS, LA

Top 10 Hidden IT Costs and How to Avoid ThemName Karen ForsterTitle Vice PresidentPlatform Vision www.platformvision.com

SESSION CODE: ARC307

TOP 10 HIDDEN IT COSTSAnd How to Avoid Them

IT Decisions Have Consequences

Unintended Consequences

How to Avoid Unintended Consequences?

An Architectural Platform Approach

Make the Most of What You Have

“In the absence of a formal technology life cycle, adoption of new technology creates overly heterogeneous computing environments. Over the past four decades, companies have accumulated heterogeneous environments from several technology genres. Today’s application portfolios are a mashup of technology genres . . . that require different tools, skills, and staff to maintain.”--Application Modernization And Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)

Platform Vision?

Platform Vision IT Architectural Model

Top 10 Hidden Costs

THE COUNTDOWN STARTS

Hidden Cost # 1

If you build/buy it, they will come.

That might work for a baseball diamond in a cornfield

But in IT …. Not so much

How to Avoid the Deployment vs. Adoption Cost• Integrate business need with value to users• Leverage existing solutions• Before building or buying, evaluate the costs of the solution throughout

the IT stack. If a solution is deployed but not adopted, costs include:• Purchasing the solution itself• Continued loss of user productivity that the solution was meant to address• Wasted IT time in integrating and deploying the unadopted solution• Continued unmet business need that the solution is meant to fill• Wasted development time• Potential purchase of new hardware for the solution• New processes to support the solution• Security and compliance measures

Hidden Cost # 3

Does Your Network See Dead People?

Photo from http://girisopinion.files.wordpress.com/2009/03/scifi_ghosthunters21.jpg

How to Avoid Hidden Costs of Directory ManagementAdhere to object lifecycle policies to separate the living from the dead

Creating user accounts and groups is easyEnforce processes to get rid of themRegularly verify that the rights are still in effect

Who should be in a group? Who owns each group? When is the group reprovisioned. Implement a business process: Thou shalt consolidate

Consolidate directoriesOrganizations have an average of 30+ user directories (including SAP, LDAP, Domino, AD)It is easier to consolidate than implement a meta directory

Set up trusts: Thou shalt use the account directoryA large financial services company estimated that an entire administrator FTE could be redeployed within corporate IT by reducing the directory integration headaches and manual processes currently employed for Lotus Notes/Domino (Use one user account) Use a third-party tool as a service on UNIX/Linux that lets you authenticate against AD

Meta directory servicesForefront Identity Manager (FIM) connectors that connect its meta directory to other directories.

FederationDevelopers want to use AD but want to do schema changes; global infrastructure can be affected

ADLDS (renamed ADAM) lets you create an LDAP style directory that you can populate with AD and change any way you want. App model overlaid on AD that you can write to.Use ADLDS/ADAM and pull a feed of just the attributes you need. Cost = delay in implementation of app because you have to go through a lot of process to prevent problems. Next-gen AD goes one step further.

Hidden Cost # 4

The Cost of Spaghetti Code Is Nothing . . . Compared to a Spaghetti Platform

Redundant InfrastructureTHIS NOT THIS

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Ramifications of Redundancy“Our portfolios are bloated with redundant technology. Redundancy keeps resurfacing in survey responses as an opportunity to exploit: 70% cited the need to eliminate obsolete languages, databases, and platforms. Source: Application Modernization And Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)

By making purchases independently of the IT organization, business units risk creating silos of applications and information, which will limit cross-function analysis, add complexity, and delay to corporate planning and execution of changes. Thus resulting in much higher costs and lesser returnsSource: Gartner

Cost of RedundancyUnified Communications

A large enterprise will have 10 applications, representing an investment of $500,000 and requiring at least one full-time staff position to support thoseStaff savings from consolidation can be $75,000 per year Licensing avoidance will approximate $100,000 per year over 5 years. (Source: “Achieving Cost and Resource Savings with Unified Communications,” by Marter Parker, Don Van Doren, March 2009)

Audio conferencing chargesCompanies pay a service provider anywhere from $.02 - $.10 per minute for audio conferencing On-premise, users can leverage VoIP and native bridging capabilities of OCS leaving only toll-free number access for external participants (internal participants and federated business do not even result in this charge) as remaining cost which is typically $.01 - $.03 per minute.  70% audio conferencing cost reduction is possible

How to Avoid the Hidden Cost of Redundant or Isolated Solutions

Understand the cost of multiple solutions to the same problemBefore developing or buying new software

Perform an organization-wide inventory of standalone and third-party software and identify areas to consolidateFind out if business units are trying to solve problems that are already addressed by existing software (e.g., BI) that they’re unaware of

Hidden Cost # 6

“I’ve looked at clouds from both sides now…”–Joni Mitchell

“I Really Don’t Know Clouds at All” – Joni Mitchell

http://www.lifeclever.com/wp-content/uploads/2008/01/lightning.jpg

Cost of Cloud Repercussions “How do you maintain that intellectual capital that enables the effective utilization of information technology, especially if you outsource IT and treat it like the electric bill?” –”A Hidden cost to cloud services; maintaining your IT edge,” by David Chernicoff (http://blogs.zdnet.com/datacenter/?p=223&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ZDNetBlogs+%28ZDNet+All+Blogs%29 )

We aren’t doing enough innovative work for the business. Wasted resources have an even darker side in the form of their opportunity cost; The opportunities were not pursued, because the resources needed were wasted on non-productive/less important work. Innovation suffers, and 76% of respondents want to reduce the time/effort/cost to add new functionality. Source: Application Modernization And

Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)

“Imagine the cost of a service outage from your cloud provider that takes an hour to fix. Imagine the cost if it's a day to fix,” (Reader comment at http://techrepublic.com.com/5208-6230-0.html?forumID=102&threadID=327322&tag=col1;brand-bridge On Chris Murphy’s article at http://www.informationweek.com/news/global-cio/interviews/showArticle.jhtml?articleID=223600008)

Northwestern Mutual Life estimates “that causing problems in the underwriting process costs $11,000 an hour in ost productivity, and problems that keep the field force from using their client management tools costs $25,00 an hour.”

How to Avoid Hidden Costs of Cloud SolutionsAssess the effort and time required to make your on-premise and cloud solutions coexist efficiently

For example: What will it take to integrate your on-premise and cloud directories?Inventory third-party add-ons for desktop users and determine the cost of managing desktop integration

Determine whether you will need dedicated data storage to meet compliance requirementsDetermine the cost of a retreat strategy in case the cloud solution doesn’t work outDetermine how much an outage would cost you

Hidden Cost # 7

The other side of the coin

How to Avoid Hidden Costs of On-Premise vs. CloudConsider hardware lifecycle costsGauge the impact of application lifecycle costsDetermine how much additional staffing on-premise IT requiresDatacenter heating, cooling, and powerAssess the agility and opportunity costs of on-premise IT

How fast can you ramp up your infrastructure to gain new business?Look at your business’s seasonality and activity bursts

Does your solution remain idle except during peak periods?

Hidden Cost # 9

Are You Leveraging Your Enterprise Agreement (EA) Benefits?

Hidden Costs of Not Leveraging EAs• One company was wasting a huge amount of time rebuilding desktops. • The company's EA included free consulting time and imaging

• Another company bought MS software piecemeal• The company’s EA would have provided a considerable discount for the

purchases. • Microsoft often doesn’t clearly express the financial value of the EA in

terms of cost and investment, so• Many companies don't consider: • In the first 3-year cycle of your EA, you’re paying for the license plus Service

Agreement (SA)• In the second 3-year cycle, you’re paying just for the SA cost (maintenance)• Result: Companies don't amortize their EA over 6 years

Hidden Cost #10

Are You REALLY Reading Your EULAs?

Hidden Costs of Not Reading EULAs

How to Avoid the Hidden Costs of Not Reading EULAs

Read them!

Hidden Cost # 9

Skill Drain

Failing to Plan for Future Skills Needs

Between. . . 59% and 65% of respondents highlight fears about the current and future availability of skilled personnel. One respondent noted the difficulties in motivating new-development staff to do maintenance work. Other respondents noted that hiring industry-specific skills in combination with legacy skills was particularly troublesome. Whatever the current level of skills-supply in your region, retiring Baby Boomers will exacerbate skills shortages. Retirees who walk out the door with legacy application knowledge will create turmoil in the staffing marketplace. Practicing good workforce planning today may mitigate some of the adverse impact of skills shortages.Source: Application Modernization And Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)

How to Avoid the Hidden Costs of Skills DrainApplication Modernization can eliminate dependency on obsolescent skillsPlan for technology additions that do not rely on rare or faddish skills and that integrate with existing skillsetsCross train new and long-time employeesDocument everything!

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