Informs and engages the UNB community on IT developments and news

ITS Management Briefing - IT Cost Optimization

Author: ITS

Posted on Jan 6, 2017

Category: General Interest , Management Briefings , News

Gartner Inc. is a leading information technology research and consulting firm, covering private, public, non-profit, and government sectors around the world. It produces many reports for use by its customers, vendors, and the public alike to help them understand the IT universe, and analyzes its vast data stores to report on industry trends and produce reliable forecasts of technology use. Gartner pays a lot of attention to the efficiency of IT services and tools, and provides advice on how to best utilize technology while ensuring costs are contained or reduced. Here’s Gartner’s current ‘Top 10’ list of IT cost optimization strategies, along with my comments on how ITS at UNB is applying them.

1. Create a shared-service organization for some or all IT services. ITS is the service provider for the Educational Computer Network (ECN), the shared IT services consortium of publicly funded higher education institutions in New Brunswick and Prince Edward Island. A recent briefing note provides details of the significant economic benefits the ECN derives from its shared IT services strategy. Collectively, members save over $1million per year on a variety of services we all need and would otherwise have to support individually at much higher cost.

2. Centralize, consolidate, modernize, integrate and standardize technologies. In 2012 ITS undertook a broad but detailed assessment of UNB’s IT environment, establishing baselines for service and performance standards. Ever since, ITS has been working hard to update all our systems and services to improve efficiency while lowering overall costs. A great example is server virtualization, a technology that allows multiple servers (and the applications they run) to be hosted on single physical machines, thus dramatically reducing space and energy requirements. ITS currently hosts over 520 individual servers on 21 physical machines; this translates into a virtualization rate of over 95%, far exceeding the industry standard baseline for server virtualization of 75%. Another successful consolidation is the UNB data storage environment. Safely spread over two data centres for redundancy and increased availability, UNB data is housed on state-of-the-art equipment, and optimized for best possible efficiency. Finally, the implementation of VOIP (Voice Over Internet Protocol), replacing our outsourced but obsolete land-line phone system with an internal system, is resulting in savings of about $4million over 10 years (we are in year 4, and have so far accrued savings of just under $2million).

3. Leverage cloud services. Cloud services (software applications, services, and resources hosted by third party vendors and accessed via the Internet) are becoming ubiquitous. Cloud services eliminate infrastructure requirements like physical servers and all the maintenance (energy, facilities, security, patching, updates, etc.) that go with them. ITS led the effort to outsource hosting of the Brightspace Learning Management System 5 years ago; while the up-front and annual costs of the system are the same to a similarly configured, internally hosted system, UNB personnel are released from having to maintain it, a significant saving. The same principle underlies the current migration of faculty and staff email, calendars, and personal file shares to Office 365, a Microsoft cloud service. Unlike Brightspace though, UNB will no longer have to pay any license or maintenance fees for these services, an annual savings of about $100,000. ITS follows a ‘cloud first’ policy when evaluating new and replacement enterprise IT services.

4. Increase IT financial transparency to better manage both supply and demand. ITS will soon be publishing its service catalog, which describes IT services available to the UNB community. The catalog will also contain cost information (for example chargebacks for phone services, prices for Print Services orders, etc.), making it the go-to resource for all things IT-related. Integrated into the catalog are service metrics, which specify exactly what turnaround times and associated costs community members can expect when deciding on what services to use. The service catalog is the authoritative source for IT service standards, and a new model for transparency at UNB.

5. Utilize zero-based budgeting on the right cost categories. ITS uses zero-based budgeting to create annual plans and targets for its ancillary units, Print Services and UCard. This helps us understand exactly what we need to invest to ensure sustainable operations. We also use zero-based budgeting to reset assumptions underlying other parts of the portfolio, particularly enterprise software licenses, which typically cost more each year due to inflation and $CDN exchange rates. ITS constantly evaluates the suites of software it deploys, and considers alternatives when available; the move to Office 365 is a good example of this process. Finally, ITS carefully assesses future enterprise technology needs, and creates a professional development and training budget each year to equip our staff to meet them.

6. Rationalize and standardize applications. ITS is participating in a huge initiative, Project FOCUS, which, when complete, will see the university’s key data processing application, Colleague, brought into line with current standards. The system (aka Datatel), has served UNB well for many years, but has been highly customized, to the point where it is increasingly difficult to manage and use. Many community members who rely on data from the system to do their jobs often find it hard or even impossible to access or manipulate the vital information they require. Project FOCUS will change all that, ultimately reducing costs in time, effort, and workarounds while increasing the value UNB gets from this essential—and expensive—system.

7. Optimize software licensing management and asset management capabilities. As already hinted, software licensing is a subject near and dear to ITS’s heart. Many of these costs are out of our control, but we do manage them as much as we can, and always seek opportunities for increased efficiency and lower costs. Did you know that UNB owns over 6000 computers? ITS manages each and every one of them, including the software that runs on them and the networks they connect to, plus all the peripherals (printers, cameras, phones, etc.) that they work with. We’re getting much better at solving the complexities arising from different operating systems (e.g. Windows vs. Mac vs. Linux), application patches and updates, and a plethora of security issues (everything from malware to viruses to phishing exploits to remote intrusion attempts, and on and on). Better management means better control of costs, and UNB’s huge investment in computing resources is optimized.

8. Improve procurement and sourcing capabilities. Through its sheer scale and scope, UNB is able to take advantage of many opportunities for saving money. On the IT side, the university annually spends considerable amounts on computer equipment and software, Internet access, data networks, and telephony (including office and mobile phones). ITS ensures that we get the best services at the best prices through the competitive bidding process; all major procurement is handled this way, and results in extraordinary savings and value for the university. In addition, our involvement with consortiums like ECN ensures that we benefit from sector-wide deals, for example anti-virus software, bulk paper, multifunction printer/copiers, and more. ITS precedes all large purchases with careful market analysis, needs assessment, and identification of value.

9. Invest in Mode 2 (exploratory, experimenting to solve new problems) capabilities such as agile and DevOps (IT culture focused on rapid development and delivery). ITS’s professional project managers frequently use the agile approach to project execution. Agile project management is particularly suited to software development projects that have no clear, predetermined outcome, that is, they are iterative (build, review, revise; build, review, revise….), incremental (new work builds on previous effort), and highly likely to have changing requirements throughout the project lifecycle. Lots of ITS projects have these characteristics, and agile methodology provides tremendous value by ensuring just the right amount of organization is applied to initiatives that are otherwise prone to failure. Ultimately, agile significantly reduces project costs by eliminating wasted effort and reducing planning time.

10. Re-examine how end-user computing is delivered. When’s the last time you heard reference to ‘mainframe’ or ‘client-server’ computing, or ‘floppy disc’ or ‘modem’? Today it’s ‘mobile’, and ‘BYOD’ (bring your own device), and ‘IoT’ (Internet of things) and ‘SaaS’ (software as a service). Change is the only permanent aspect of information technology, and ITS ensures that UNB keeps up. On a typical day during Fall or Winter term as many as 20,000 devices connect to our wireless networks, and this traffic keeps growing. And it isn’t just student activity; more and more faculty and staff connect their work and personal devices and keep them connected all day long. ITS supports this environment not only by ensuring we have excellent networks, but also by providing cost-effective devices, data resources, and the support to use them properly. This saves everyone time and money, extending the value of these services even more.

Terry Nikkel, AVP, ITS, Jan. 5, 2017