Public sector organisations are facing up to real pressure around cuts in spending. In the UK, the Comprehensive Spending Review announced big reductions in budgets across central government departments, local authorities and services from healthcare through to policing. In the US, areas such as education and healthcare are facing their own pressures around meeting the needs of the organisation while also being restricted. These cuts will have a profound impact on how the public sector in general approaches its goals, and the IT side is no exception to this. Budgets are going to be severely squeezed for years to come, leading to reductions in IT spending, but IT is also going to be an important route to efficiency for other departments.
IT asset management will be a crucial part of the overall approach to managing budgets more efficiently. Looking at customers that I have worked with, 80 per cent of spend is currently associated with keeping the IT lights on, while only 20 per cent is allocated to new investments that can drive greater value. While the spending cuts will immediately make this investment in innovation more difficult, the biggest opportunity for cost savings in IT, and for IT asset management in particular, is around reducing those existing management expenses.
What do you have?
There are three areas to consider around these ongoing overheads: software, hardware and staff. From an asset management perspective, software is the area where cost control can be established fastest. In the public sector, there are differences between the central approach to software licenses and the options available to local organisations.
In the UK, discussions with large players such as Oracle have led to Memorandums of Understanding being signed, in the aim of reducing the management costs associated with large IT projects. We have also already seen large-scale Enterprise wide Agreements being brought to an end at the NHS with the likes of Microsoft and McAfee. For an organisation regularly cited as the third biggest employer in the world, this is a serious change.
However, the requirement for software licenses has not gone away. When large-scale changes in licensing strategy hit the organisation, there is the opportunity to reduce costs and align with the new business goals that can be achieved in this market. IT at the local level should know what their part of the organisation really uses, and therefore reduce wasted spend. However, taking advantage of this relies on having procurement staff with in-depth knowledge of software licensing, as well as getting the IT staff to assess what they have and what is being used. Software asset management is therefore going to be an in-demand competency.
At the heart of this is the fact that too many organisations don’t know exactly what assets they are paying for and how much they are being used. Having an inventory of everything on the network is different to knowing how best these resources can be paid for over time, and often there is both software and hardware that has been added at some point in the past and then been forgotten about. ITAM skills can therefore help organisations identify straightaway what assets they actually have in place and then they can go through ones which are no longer needed, which ones must remain in place and also which of those that are staying need renewing.
Undertaking this exercise should not be viewed as just a compliance procedure: looking at how IT assets are being used can help to show opportunities for either asset reduction, or for moves over to different asset licensing approaches that can provide better return on investment.
Extending the value of hardware
IT hardware is another area where usage data can be useful. Server virtualisation has already being used by many public sector organisations to reduce their hardware footprint and power consumption. However, management rules around virtual machines still have to be put in place. If they are not there, then there is the potential for additional software licenses to be required as more machines are created to fill gaps in services.
End-user desktops are another area where investment can be more carefully considered. Many public sector organisations have been considering whether to roll out Microsoft Windows 7, particularly as large numbers of their desktops need to be replaced. In these cases, some existing PC assets will be capable of running the new OS version, while others may have to be updated or replaced in order to run Windows 7. Using your existing asset management records can help to show what desktops can be salvaged, which should be disposed of and how best to approach rolling out the OS to the rest.
Standardising the desktop estate can help to drive out some of the costs associated with patching and updates being applied. It also makes support and service desk tasks easier, as applications can be installed in the same approach. This can save IT staff valuable time that can be better spent on other activities that provide more value back to the organisation.
The value that IT staff can offer
The final area for cost savings, and potentially the most emotive, is around staff. Whenever savings have to be made, the automatic assumption is that staff numbers will have to be reduced. Public sector organisations are faced with a choice: either outsource their IT to a third party, or look to make their remaining existing staff more productive.
This is not necessarily an ‘either / or’ decision, as different parts of IT will provide value back to the organisation if they are held in-house, or bought in. However, while moving sections of IT over to a service provider or other outsourcing company can help reduce costs in the short term, any contract will have to be worked out to the advantage of both the public sector organisation and the service provider.
If the organisation wants to retain its staff, then it has to look at where work can be automated wherever possible in order to reduce costs and make those employees as productive as they can be. Tasks such as deploying software updates and security patches can be time-consuming if each machine has to be done individually. Travel time has to be added on as well if there are multiple sites within the organisation. IT administrators often spend their evenings and weekends doing these updates so as to lessen the disruption to the organisation: if you choose to outsource, then this can be a significant additional cost.
With systems management tools in place updates and patches can be deployed across the company network within minutes, across multiple locations. By reducing the weight of IT administration this frees up staff time to focus on ways to solve other business IT issues.
Systems management skills and solutions will have an important part to play in the cost reductions that have to be found across the public sector. Whatever path a particular organisation chooses to go down, awareness of the long-term costs that exist around managing and maintaining IT assets will be a challenge to overcome. This involves making best use of assets that currently exist, as well as determining where costs can be reduced around keeping the lights on.