70% of U.S. IT budget is spent supporting legacy infrastructure
Businesses and the government rely on legacy infrastructure. For all intensive purposes, this is IT hardware that is still in use past its OEM supported date. We need to be smart about how we are supporting our technology and evaluating its refresh cycle.
Two verticals continue to lead in Technology Lifecycle Management - Banking and Retail. Let's break down some key factors why. Any of these things you and your team can relate to?
Banking
High turnover of branch tellers, cashiers, and other employees
Increased branch operational costs
Need for increase in Branch Uptime
Increase in technology investment due to compliance and regulatory requirements
Desire faster refresh cycle of branch based IT hardware
Desire for 'newer' technology to keep up with increased Information Security needs
Greater # of branches for each technology staff member to support
Need for easy remote management of branch technology
Retail
High turnover of store cashiers and personnel
Increase in monthly building Lease costs
Reduce store downtime due to older equipment
High maintenance costs for store infrastructure
Desire for better technology at a lower cost
Need for easy remote management of store technology
It is no surprise that both industries are exhibiting similar pressures; however, it is still interesting to see how many banks and retailers continue to struggle with bottom line improvement and have incredibly high IT operational inefficiency. More importantly, the result of which has shown an overall contraction in total number of Bank Branch locations and storefronts. This presents significant challenges to businesses that are looking for growth.
The Antidote
Identify key IT Initiatives and align them with the business Initiatives.
Build a long term Technology Lifecycle strategy
Leverage a combination of new and refurbished infrastructure (Lower upfront capital investment)
Layer in 3rd Party support on lower priority IT equipment (reduce annual operational costs 50-60%)
Utilize the savings from the above combination to lowering your refresh cycle to 3 years (get newer technology which IT needs)
Build an IT Asset Recovery partnership (get more value out of your hardware than if you waited 5-7 years)
Build in HW replacement services into your Maintenance agreement (optimizes long term operational efficiency and lower internal resources needed for new implementation)
Every industry and business has different external pressures and initiatives it is working towards. That said, as business leaders we can all find ways for continued improvement. It is easy for anyone to get stuck in ways of the past and the all too common, "well this is how we've always done it" mentality. Challenge your executive team to look to IT as a way to help the business accomplish its goals. Challenge your IT organization to take a step back from their day to day activities to help meet the objectives of the business. Challenge your business partners to get creative in supporting your organizations initiatives. Don't be afraid to move the boat together!
References:
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