1. Sweat those assets

Make do and mend as the wartime motto went. Look your refresh cycles; redo the sums. Do all your desktops really need replacing right now or can you phase your refresh? Perhaps you could upgrade rather than rip and replace?

When it is time for hardware to be put out to pasture, many businesses instantly start totting up the TCO while it’s still en route to the skip, but the equipment often still has a value. Trading kit in rather than just binning it is a simple trick but it helps maximise utilisation and could lead to greatly reduced TCO.

2. Slim down, think virtual

It may be the buzzword du jour, but virtualization really can do wonders for the balance sheet, helping cut server numbers and power consumption and maximise processing and storage utilisation and efficiency. 

“With average savings equating to about 40% over three years compared with traditional computing architectures, virtualisation can have a phenomenal impact on TCO”, says David Newbould, UK product marketing manager at NEC Computers.

“One of the major TCO-reducing benefits of virtualisation is the increased system lifecycles. Traditional PCs have a lifecycle of around three years and are relatively expensive, requiring regular on-site maintenance and repair. Virtual PCs however, use small, inexpensive, robust access devices lasting up to nine times longer than traditional PCs, require no on-site maintenance, and that contribute to energy reductions of up to 77%.”

3. Look to lease

Leasing rather than buying may provide both better cost visibility and the flexibility to change, update, or expand IT provision more easily – and the Opex versus Capex benefits speak for themselves.

“Leasing also frees businesses from taking responsibility for end-of-life disposal of equipment”, says Philip White, CEO of IT finance provider Syscap. “And hardware, software, support, and services can be wrapped into a single agreement.” 

4. Outsource... carefully

Worth considering if only because the exercise of evaluating outsourcing options itself makes costs more visible... but, as ever, be careful not to throw the baby out with the bathwater.

Options like Software as a Service (SaaS) make sense here. With everything provided by the vendor, ‘hidden’ personnel costs are eliminated and maintenance headaches are removed too, notes Simon Etherington, head of SME at SAP UK&I.

Storing data at an offsite datacentre will save on capital storage, software, and facilities costs.

5. Consolidate to accumulate

While consolidating multiple point solutions will involve capital outlay, it’s often money well spent from the point of view of TCO. Replacing multiple security systems with a single multi-threat driven solution, for example, will make for up-front costs that are more easily justifiable, and also cut outlay on training, maintenance, and support over the long-term.

6. Rationalise software licensing

Unchecked, the proliferation of software licences can quickly become one of the biggest drains on IT budgets (and one of the hardest to detect and stem) – with ad hoc shrink-wrapped purchases being particular culprits when it comes to waste, duplication, and inconsistencies.

As Graeme Port, CTO at ManageSoft, notes: “Software is a significant component of IT cost. Studies show that 30% of IT budget is consumed by software licence and maintenance.  IT TCO can be significantly reduced by adopting better software asset management tools and practices to reduce the risk of software audit penalties and to deliver software cost savings.”

Consolidation (product standardisation, the rationalisation of licensing) is again a cost-saving option, as is better application allocation management (ensuring unused software is properly tracked, that unnecessary purchases are avoided, and that maintenance charges are reduced.)

7. ‘Finger’ print

Print is commonly overlooked when it comes to cutting TCO; incredible when you consider that print costs typically account for between 1 and 3% of a company’s revenues according to Gartner.

Most companies have machines from different vendors and that means different software and different consumables – and remedying this via the use of a managed print service solution (MPS) is one of the easiest ways to reduce print costs, says Lexmark’s Raj Meghani.

“MPS means the company can oversee, analyse, and consolidate its print usage by type of machine, by department, and by location and use this information to drive behaviour change – leading to sustained savings.”

8. Tidy up the datacentre

The eradication of the multiple inefficiencies that exist in most datacentres represents a huge opportunity for cost savings.

Most servers in most datacentres run at just 10-15% utilisation, says Richard Muirhead, CEO at Tideway Systems, so it stands to reason that this is one of the first places CIOs should be looking to cut TCO.

He recommends getting to grips with exactly how each physical and virtual server is used. What software is running on it? Which business applications does it support? What is each server’s actual value to the business? Once you can answer these questions, unused, unnecessary, inefficient hardware can quickly be weeded out.

9. Sharpen up on security

“Having identified potential security weaknesses following a vulnerability assessment, clients often feel the need to patch, update, and improve every
system – a process that takes up a lot of time and money”, says Steve Smith, UK managing director with risk management specialists, Pentura.

Instead, he says, businesses should spend some time identifying and classifying their most important assets, and defining where threats to them will come from – a process that will cut the number of solutions required.

10. Open up to Open Source

In a few years’ time, almost all businesses will be using open source software in one way or another according Gartner (it predicts more than 90% by 2012). That means free licensing of course, but champions of the technology say that open source does more than just cut up-front costs. In the past, they argue, companies have only bought as many licences as they could afford, but because open source licences are free, projects can be rolled out to as many people as needed.

There is a caveat though: just because the licence is free it doesn’t necessarily follow that overall TCO will be lower too, so be sure to do your homework.