Press Releases
UK businesses fail to maximise use of IT assets
[02-04-2007]
UK businesses fail to maximise use of IT assets by not sharing capacity across the organisation
52% blame departments refusing to relinquish control of assets, 59% say no way to demonstrate savings
London – 2 April 2007 - Research released today by Morse, the business technology consultancy, has found that 59% of senior IT decision makers say their business doesn’t share the capacity of its IT assets, thereby maximising their use, because there is no way to demonstrate the savings realised by doing so. Other reasons for not sharing resource capacity were: individual departments refusing to relinquish control of their IT assets (52%); little perceived return on investment from sharing capacity (33%); and the process for sharing capacity being too complex (33%). As a result, UK businesses are failing to optimise their IT assets and are not benefiting from advantages such as cost savings by purchasing fewer devices and having a less complex environment to manage.
"Today’s businesses are faced with the challenges of ever increasing amounts of business critical data, a mix of storage and servers across multiple sites, and individual departmental purchasing and planning which have led to a complex, inefficient and costly IT environment," said Scott Reynolds, consultant, Morse. "Clearly there is a need to optimise the existing environment in order to make it easier to manage, to reduce costs by eliminating ad-hoc purchasing and to increase efficiency by sharing capacity across the business, using technologies such as virtualisation. By taking this approach, the IT department can move from being a cost centre to providing a flexible service to the business."
However, before businesses can go down this path, they need to address the bad habits that have put them in this position. The research found that 45% of senior IT decision makers would allow IT equipment like storage and servers to be purchased on a department by department basis, rather than being purchased centrally and owned by the IT department, with capacity allocated to different departments as required. This departmental purchasing approach can leave businesses with devices spread throughout the organisation which is very difficult to manage. The situation was even worse in the financial services sector with over half (57%) of those surveyed admitting that they allowed departmental purchasing.
When questioned further about purchasing strategies, 58% said they would let one department with urgent additional storage or server needs to purchase its own devices if it came out of its own project budget. While this allows the business to roll out new projects quickly, it also means that the devices purchased are typically under utilised as they are used for one project only and the unused capacity is not shared with other departments or used for different projects. This practice is even more widespread in the financial sector with 86% of senior IT decision makers allowing departments to purchase their own storage or servers if it is paid for out of their own budget.
Given such purchasing practices, it comes as no surprise that organisations do not have a clear overview of their IT estate. In fact, 52% of those surveyed said their organisation finds it difficult to say exactly how many IT devices it has and how they are being utilised and managed at any one point in time. This makes planning to share existing capacity almost impossible for IT departments and in turn, senior IT decision makers are more likely to agree to let departments purchase additional equipment for their urgent projects, rather than trying to assess if there is surplus unused capacity somewhere in the company.
The uncertainty over what devices the organisation has and how they are being used also makes it harder for senior IT decision makers to try to predict what capacity and devices the business will need in the coming year. When questioned, 74% said that they avoided asking each department to try to predict what server or storage capacity they might need in the next few months. Further, businesses often factor in more capacity than they actually need at the start of a project because it is viewed to be easier to purchase and deploy resource up front rather than to review and request more resource budget later. However, this overestimation means that businesses are buying devices before they need them and in some cases may never use up the excess capacity they have purchased.
"Although many businesses have fallen into the trap of accommodating different departments and allowing them to purchase their own equipment, steps can be taken to help bring the assets back under the control of the IT department," continued Reynolds. "Once the IT department has control of the assets centrally, it can begin to move towards a service-oriented ‘on demand’ structure where departments requiring storage or server capacity can request it from the IT department and have it allocated to them. This will allow the IT department to control the capacity usage, while the business benefits from cost savings achieved by purchasing fewer devices and creating an IT environment which is easier to manage."
The survey of 100 senior IT decision makers was commissioned by Morse and conducted by independent research company Vanson Bourne. Further details of the survey are available from Spark Communications on 0207 436 0420.
Notes to Editors:
About Morse
Morse is an international consulting company, offering our clients specialist business and IT advice and helping them execute for maximum benefit. We are a delivery-orientated company with focussed industry expertise, combining a powerful blend of management, application and infrastructure consulting skills.
Morse’s reputation is earned through providing essential industry know-how in a flexible and pragmatic style, where clients enjoy the benefits of innovative solutions and confidence from collaborating with a trusted and talented partner.
Morse provides technology and business consulting through three areas: Management Consulting which identifies business opportunities and enables the delivery of change to improve business performance; Applications Consulting which helps organisations put in place processes, systems and organisational design to improve business performance; and infrastructure consulting which advises businesses on provisioning, managing and operating technology to improve business performance.
Morse has a wide range of clients including EMI, Somerfield, Tetley, the Body Shop, Allianz Cornhill, Insight Investments Management Ltd, Investec Treasury and SEI Investments.