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Writer's pictureAlucid Team
Nov 14, 20222 min read

70% of U.S. IT budget is spent supporting legacy infrastructure

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

  1. Identify key IT Initiatives and align them with the business Initiatives.

  2. 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!


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