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Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
Karen Forster Top 10 IT Costs
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Karen Forster Top 10 IT Costs

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Platform Vision Vice President Karen Forster's presentation about the Top 10 IT Costs (and how to avoid them) as presented at TechEd 2010 in New Orleans.

Platform Vision Vice President Karen Forster's presentation about the Top 10 IT Costs (and how to avoid them) as presented at TechEd 2010 in New Orleans.

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  • Email from SQL Server admin whose CIO insisted he rip out all instances of SQL Server and replace them with Oracle.Unintended consequences: Parts of the IT infrastructure cannot function without SQL Server: Windows Server Update Services (WSUS), Forefront, System Center, SharePoint, etc.Not to mention in-house and LOB apps.
  • Audience: Have you had unintended consequences of decisions?
  • November 2, 2009 Application Modernization And Migration Trends In 2009/2010 Are You Leveraging, Or Missing, An Opportunity? A commissioned study conducted by Forrester Consulting on behalf of BluePhoenix Solutions Ltd. 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 — relational and pre-relational databases mixed with sequential, indexed, and virtual file systems; obsolete languages, platforms and data trapped in application silos — that require different tools, skills, and staff to maintain “For 2009, approximately what percentage of your firm’s combined capital and operating budgetfor software will go to new initiatives and projects versus ongoing operations and maintenance?”Base: 1,044 custom software decision-makers at North American and European enterprises and SMBsSource: Forrester Research, Inc., Enterprise And SMB Software Survey, North America And Europe, Q4 200835%66%New software initiatives and projectsOngoing operation and maintenanceCosts, Agility, Compatibility, And Skills Issues Drive Migration Migration from obsolete technology or consolidation to a more homogeneous technology stack can help IT leaders streamline the waste from application portfolios. When asked about the factors that drive them to consider migration of their existing languages, DBMSes, and platforms, survey respondents rated several factors on a 5-point scale, from critical (5) to not important (1). Grouping the “critical” and “very important” responses together highlights the factors that are motivating respondents to migrate: Cost reduction remains a primary concern. With 79% of firms citing cost reduction as a motivating factor, clearly the redundant licenses and the excessive costs for lights-on IT have reached the point where they are intolerable (see Figure 5). 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. Application Modernization And Migration Trends In 2009/2010 - 8 - 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. Fears about future compatibility haunt us. Respondents worry about how long they can count on vendors to keep legacy technology environments compatible with new advances in technology. Sixty-nine percent of respondents cite future technology compatibility as a motivating factor. We badly want to reuse software assets through SOA. Respondents acknowledge the value locked inside legacy applications and reject the concept of “throwing the baby out with the bath water” that is inherent in big-bang replacement scenarios. Sixty-six percent want to leverage SOA to reuse the business logic that is locked inside their applications. Figure 5: Respondents’ Top Reasons For Migrating
  • Cost: Not just the cost of the solution itself, but also user productivity, business needs unfulfilled, wasted dev time, wasted integration time. New hardware? New processes? Compliance?Examples:One company deployed InfoPath only to find that nobody was using it. They finally integrated InfoPath with the workflow for expense reportingA real user need is what finally drove adoption and ensured that the investment was bringing value to the business.
  • Brian Komar’s story: Object lifecycle. Easy to create user accounts and groups, but no processes to get rid of them (except maybe user accounts). Who should be in a group, who owns them, when to be reprovisioned. Verifying on a regular basis that the rights are still in effect. Cost= security, crap when you have to change something so you have to step through every group and track down the rights and members; divestiture; compliance – auditing; group policiesDevelopers: devs want to use directory but want to do schema changes; very high bar and overkill for some little app (global infrastructure affected); ADLDS (renamed ADAM) exists to let you create an LDAP style directory that you can populate with AD and you can change it any way you want. App can access corp data but different form how it is represented in AD, so use ADAM and pull a feed of just the attributes you need. App developers are unaware of ADAM. 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. App model overlaid on AD that you can write to.no company had fewer than 18 different directories! Imagine the cost of supporting all those directoriesNo trust relationship among the directoriesAverage of over 30 user directories (including SAP, LDAP, Domino, AD); easier to consolidate than implement a metadirectoryAn example of this came from a large financial services company that was part of our study. They estimated that an entire administrator FTE could be redeployed within corporate IT by reducing the directory integration headaches and manual processes they currently employed for Lotus Notes/Domino (setting up trusts solves this; Use one user account)Forefront Identity Manager (FIM) connectors that connect its metadirectory to other directories.Use a third-party tool as a service on UNIX/Linux that lets you authenticate against ADSharePoint groups, DLs
  • Respondents seek guidance through application assessments. The popularity of single and multiple application assessments — 75% and 71% respectively — confirms that companies lack a basic inventory and descriptive metrics to guide the depth and sequence of modernization efforts. Application assessment is a growth area. Boeing example: SharePoint, Search, Intranet (Rob)Audio conferencing charges is definitely #1 today.  Companies pay a service provider anywhere from $.02 - $.10 per minute for audio conferencing which can be reduced by bringing this service on-premise.  When brought 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.  We have seen around 70% audio conferencing cost reduction based on this. A major cost of audio conferencing are the small (less than 5 user) conferences that users leverage a service provider bridge for when they could be using the capabilities found in their current PBX today to accomplish these conference calls.  Users do not do this because the default, easier way to do things is just use the conference service for all call with more than 2 users. Office Communicator makes it easy to complete a conference call (both reservation-less and reserved) which speeds adoption of leveraging VoIP for these calls bringing VERY fast cost savings for the customer.
  • Business units creating their own apps, purchasing software, isolated from IT and not aligned to It policies and strategies. Support costs. Licensing costsBy 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 Business units often purchase their own business intelligence (BI) solutions without going through IT. Numerous web conferencing solutions and IM solutions.Redundancy makes it nearly impossible to track IT costs throughout an organization because IT is often unaware of all the solutions implemented in business units.Invest a lot in creating similar functionality or modules for different appsExample: Unified Communications—As a rule of thumb, a large enterprise will have 10 applications, representing an investment of $500,000 and requiring at least one full-time staff position to support those. Payback is usually immediate when the purchase, upgrade or replacement of the existing diverse applications can be avoided. Staff savings from consolidation can be $75,000 per year and 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)
  • 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. 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? –David Chernicoff (http://blogs.zdnet.com/datacenter/?p=223&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ZDNetBlogs+%28ZDNet+All+Blogs%29)(Comment at http://techrepublic.com.com/5208-6230-0.html?forumID=102&threadID=327322&tag=col1;brand-bridge) actual costs of problems in the computer network and with cloud computing outages in service. Chris's article mentions Northwestern Mutual Life assigning an actual cost to such problems. To quote " that causing problems in the underwriting process costs $11,000 an hour in lost productivity, and problems that keep the field force from using their client management tools costs $25,000 an hour. (Chris Murphy, http://www.informationweek.com/news/global-cio/interviews/showArticle.jhtml?articleID=223600008)
  • One company was wasting a huge amount of time rebuilding desktops. Sneakernet (Zappos.com) IT didn't realize the company's EA would allow them to take advantage of free consulting time and imaging. Another company bought MS software piecemealThey could have received a considerable discount if they had used their EA for the purchases. Microsoft often has a hard time expressing the financial value of the EA in terms of cost and investment. 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
  • The last three drivers — each cited by 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.1
  • Transcript

    • 1.
    • 2. Top 10 Hidden IT Costs and How to Avoid Them<br />Name Karen Forster<br />Title Vice President<br />Platform Vision www.platformvision.com<br />SESSION CODE: ARC307<br />
    • 3. TOP 10 HIDDEN IT COSTS<br />And How to Avoid Them<br />
    • 4. IT Decisions Have Consequences<br />
    • 5. Unintended Consequences<br />
    • 6.
    • 7. How to Avoid Unintended Consequences?<br />An ArchitecturalPlatform Approach<br />
    • 8. Make the Most of What You Have<br />“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.”<br />--Application Modernization And Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)<br />
    • 9. Platform Vision?<br />
    • 10. Platform Vision IT Architectural Model<br />
    • 11. Top 10 Hidden Costs<br /> THE COUNTDOWN STARTS<br />
    • 12. Hidden Cost # 1<br /> If you build/buy it, they will come.<br />
    • 13. That might work for a baseball diamond in a cornfield<br />But in IT ….<br /> Not so much<br />
    • 14. How to Avoid the Deployment vs. Adoption Cost<br /><ul><li>Integrate business need with value to users
    • 15. Leverage existing solutions
    • 16. Before building or buying, evaluate the costs of the solution throughout the IT stack. If a solution is deployed but not adopted, costs include:
    • 17. Purchasing the solution itself
    • 18. Continued loss of user productivity that the solution was meant to address
    • 19. Wasted IT time in integrating and deploying the unadopted solution
    • 20. Continued unmet business need that the solution is meant to fill
    • 21. Wasted development time
    • 22. Potential purchase of new hardware for the solution
    • 23. New processes to support the solution
    • 24. Security and compliance measures</li></li></ul><li>Hidden Cost # 3<br />Does Your Network See Dead People?<br />
    • 25. Photo from http://girisopinion.files.wordpress.com/2009/03/scifi_ghosthunters21.jpg<br />
    • 26. How to Avoid Hidden Costs of Directory Management<br />Adhere to object lifecycle policies to separate the living from the dead<br />Creating user accounts and groups is easy<br />Enforce processes to get rid of them<br />Regularly verify that the rights are still in effect<br />Who should be in a group? Who owns each group? When is the group reprovisioned. Implement a business process: Thou shalt consolidate<br />Consolidate directories<br />Organizations have an average of 30+ user directories (including SAP, LDAP, Domino, AD)<br />It is easier to consolidate than implement a meta directory<br />Set up trusts: Thou shalt use the account directory<br />A 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)<br />Use a third-party tool as a service on UNIX/Linux that lets you authenticate against AD<br />Meta directory services<br />Forefront Identity Manager (FIM) connectors that connect its meta directory to other directories.<br />Federation<br />Developers want to use AD but want to do schema changes; global infrastructure can be affected<br />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.<br />Use ADLDS/ADAM and pull a feed of just the attributes you need. <br />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. <br />
    • 27. Hidden Cost # 4<br />The Cost of Spaghetti Code Is Nothing . . . Compared to a Spaghetti Platform<br />
    • 28. Redundant Infrastructure<br />THIS<br />NOT THIS<br />http://www.arch.columbia.edu/files/gsapp/imceshared/dca2110/whole.jpg<br />
    • 29. Ramifications of Redundancy<br />“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. <br />Source: Application Modernization And Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)<br />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 returns<br />Source: Gartner<br />
    • 30. Cost of Redundancy<br />Unified Communications<br />A large enterprise will have 10 applications, representing an investment of $500,000 and requiring at least one full-time staff position to support those<br />Staff savings from consolidation can be $75,000 per year <br />Licensing avoidance will approximate $100,000 per year over 5 years.<br />(Source: “Achieving Cost and Resource Savings with Unified Communications,” by Marter Parker, Don Van Doren, March 2009)<br />Audio conferencing charges<br />Companies pay a service provider anywhere from $.02 - $.10 per minute for audio conferencing <br />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.  <br />70% audio conferencing cost reduction is possible<br />
    • 31. How to Avoid the Hidden Cost of Redundant or Isolated Solutions<br />Understand the cost of multiple solutions to the same problem<br />Before developing or buying new software<br />Perform an organization-wide inventory of standalone and third-party software and identify areas to consolidate<br />Find out if business units are trying to solve problems that are already addressed by existing software (e.g., BI) that they’re unaware of<br />
    • 32. Hidden Cost # 6<br />“I’ve looked at clouds from both sides now…”<br />–Joni Mitchell<br />
    • 33. “I Really Don’t Know Clouds at All” – Joni Mitchell<br />http://www.lifeclever.com/wp-content/uploads/2008/01/lightning.jpg<br />
    • 34. Cost of Cloud Repercussions <br />“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)<br />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)<br />“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)<br />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.”<br />
    • 35. How to Avoid Hidden Costs of Cloud Solutions<br />Assess the effort and time required to make your on-premise and cloud solutions coexist efficiently<br />For example: What will it take to integrate your on-premise and cloud directories?<br />Inventory third-party add-ons for desktop users and determine the cost of managing desktop integration<br />Determine whether you will need dedicated data storage to meet compliance requirements<br />Determine the cost of a retreat strategy in case the cloud solution doesn’t work out<br />Determine how much an outage would cost you<br />
    • 36. Hidden Cost # 7<br />The other side of the coin<br />
    • 37. How to Avoid Hidden Costs of On-Premise vs. Cloud<br />Consider hardware lifecycle costs<br />Gauge the impact of application lifecycle costs<br />Determine how much additional staffing on-premise IT requires<br />Datacenter heating, cooling, and power<br />Assess the agility and opportunity costs of on-premise IT<br />How fast can you ramp up your infrastructure to gain new business?<br />Look at your business’s seasonality and activity bursts<br />Does your solution remain idle except during peak periods?<br />
    • 38. Hidden Cost # 9 <br />Are You Leveraging Your Enterprise Agreement (EA) Benefits?<br />
    • 39. Hidden Costs of Not Leveraging EAs<br /><ul><li>One company was wasting a huge amount of time rebuilding desktops.
    • 40. The company's EA included free consulting time and imaging
    • 41. Another company bought MS software piecemeal
    • 42. The company’s EA would have provided a considerable discount for the purchases.
    • 43. Microsoft often doesn’t clearly express the financial value of the EA in terms of cost and investment, so
    • 44. Many companies don't consider:
    • 45. In the first 3-year cycle of your EA, you’re paying for the license plus Service Agreement (SA)
    • 46. In the second 3-year cycle, you’re paying just for the SA cost (maintenance)
    • 47. Result: Companies don't amortize their EA over 6 years</li></li></ul><li>Hidden Cost #10<br />Are You REALLY Reading Your EULAs?<br />
    • 48. Hidden Costs of Not Reading EULAs<br />
    • 49. How to Avoid the Hidden Costs of Not Reading EULAs<br />Read them!<br />
    • 50. Hidden Cost # 9<br />Skill Drain<br />
    • 51. Failing to Plan for Future Skills Needs<br />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.<br />Source: Application Modernization And Migration Trends In 2009/2010: Are You Leveraging, Or Missing, An Opportunity? by Forrester Consulting (November 2, 2009)<br />
    • 52. How to Avoid the Hidden Costs of Skills Drain<br />Application Modernization can eliminate dependency on obsolescent skills<br />Plan for technology additions that do not rely on rare or faddish skills and that integrate with existing skillsets<br />Cross train new and long-time employees<br />Document everything!<br />
    • 53. Resources<br />Learning<br />Sessions On-Demand & Community<br />Microsoft Certification & Training Resources<br />www.microsoft.com/teched<br />www.microsoft.com/learning<br />Resources for IT Professionals<br />Resources for Developers<br />http://microsoft.com/technet<br />http://microsoft.com/msdn<br />
    • 54. Complete an evaluation on CommNet and enter to win!<br />
    • 55. © 2010 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.<br />The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.<br />

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