IT cost transparency
The advent of cloud computing and specifically its highly transparent pay as you go usage model has provided a new imperative to solve the difficult question ‘What is the real cost of IT?’
Our model answers this question in a straight-forward and rapid manner using technical and financial expertise, along with the power of community based knowledge. Our model harnesses the knowledge already present in your people and provides them with the means to very rapidly describe the composition of individual IT services and to allocate validated costs to each area.
This community based approach provides a very rapid solution because it focuses on and utilises the knowledge and experience of people as well as making use, where appropriate, of technology. It is an approach that leverages the important, existing assets residing in an organisation’s people, whilst at the same time creating a consensus view.
Aligning IT and finance systems
The key consensus is that between the finance team and the IT team. Our model provides the fundamental basis for such alignment. Once obtained it is very easy to establish valid IT benchmarking measures in different parts of an enterprise. With effective benchmarking in place, we have found that IT cost reductions will almost certainly follow.
How the model works
Building on the highly effective frameworks and templates in the model, the community delivers and helps validate the information required. This drastically reduces the implementation time whilst also providing a common platform for shared understanding of the composition of IT services and associated costs.
Our model is specifically designed to facilitate the sharing of information followed by collaboration to achieve results. Very often collaboration is around sharing best practices within an organisation and or, selected and trusted peers.
The financial case
In this example, based on a real deployment of our model, we are comparing costs amongst a trusted internal corporate company. The sharing of WAN costs within a group structure using our model clearly identified some substantial cost saving opportunities.
The chart below demonstrates that not only could we identify where opportunities might exist to extend internal best practice, but we could also drill into high unit costs and explore the financial impact of alternative technologies.
We could then drill down further into data centre costs for Division B, and identify areas where new technologies, such as Amazon Web Services, could have a directly beneficial financial impact.
In this case, ‘Backup, failover, and archive look like good potential candidates for the Cloud.
Drilling down even further into the ‘Backup, failover, and archive’ we could identify that nearly 50 % of the associated cost is for failover servers. The production systems these support are up at least 95 % of the time, and therefore we could demonstrate that almost all of the annual cost was effectively un-used.
A comparable reserved Cloud-based instance would cost less than 10 % of this figure, with no capex.