Article by Edoardo Bellocchi

IT management costs: why it is important to rationalise the investments in IT

When we talk about IT in the company, we refer to a lot of different technologies. They can be hardware or software or something else, such as services or consultancy, but they have always had a common purpose: to manage the company and make it work better, to be more competitive and more able to deal promptly with the pitfalls of the market. These are not the only factors. Today, in the age of digital transformation, IT is the go to enabler of many of the new businesses or services that have appeared on the market. The examples, especially in terms of innovation, are many and these are just cases that would not exist if there was not an IT infrastructure which made them possible.

The two beliefs of corporate IT

Leaving aside these phenomena, which are interesting to fully understand how the digital transformation that is changing the face of the economy, IT is no less important in traditional businesses, as it constitutes a fundamental element for the correct management of companies, as well as being a powerful engine for innovation. In an era in which non-innovators are fatally destined to leave space on the market to those who instead make innovation a strategic priority, it therefore becomes essential to manage the IT budget in the most rational way possible. With two basic constraints: on the one hand, the tendency to keep the budgets unchanged, if not to limit them in a more or less perceptible way, and on the other hand the increasingly pronounced “dualism” of IT, which is both the management tool of the company and the engine of innovation.

Free resources to innovate

The real challenge of today is precisely that of being able to reconcile these different ideas of what goes under the name of “corporate IT”, with an approach aimed at maximizing the return on investment. Thinking strategically can be useful to understand which items of expenditure are to be optimised and which should be increased if possible. A first suggestion, in this era of digital transformation, is to allocate more resources to investments that can generate real innovation, that can be capable of ensuring competitive advantages to the company, or at least are capable of keeping it competitive. However, today it often happens that the general IT budget does not foresee significant increases, or that the “do more for less” rule prevails. It is in these cases that a structured approach to the different cost items can make it possible to find resources for investment in innovation, which can be derived by varying the mix of IT spending. It is well known that today a good part of the IT budget of the company is still destined to manage and to maintain the existing infrastructures, that is the so-called “legacy”.

Some suggestions

Options can vary: for those who have large infrastructures, operations aimed at consolidating the data centre can help, which is still one of the most important items in general IT spending. Still with regard to the data centre, some functions can be brought to the cloud, relying on a cloud service provider and transforming spending, which becomes operational and no longer capital expenditure.

Among other relevant examples of IT spending items that can be optimised, there are also those related to workstations: for some time now the market offers many options for the rationalisation of PC management, ranging from centralised management to PC transformation into thin clients, or to replace the same PCs with thin clients. This is a trump card for a reduction in TCO with a view to freeing up resources to be used in innovation: already in terms of energy consumption, the comparison with the traditional PC shows how the thin client is satisfied from 3 to 25 watts, while PC needs around 150 watts, with a calculated savings of up to 75 euros per year for each workstation. This is not the only benefit, thin clients also enjoy an extremely long average life compared with PC workstations, from 7 to 10 times higher, thanks to the fact that they do not have moving parts such as hard disks and fans.

Finally, by using a virtual desktop infrastructure, the investment in thin clients is characterised by being less subject to obsolescence. It is also for this reason that rationalising investments in hardware such as thin clients represent an excellent vehicle for incorporating innovation into the company, with the certainty of always having more flexible and more manageable infrastructure.

 

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