If IT leaders hope to operate their infrastructure both reliably and cost effectively, they will need to take an active approach to the immensely power-hungry world of corporate data centers, according to Diamond Management & Technology Consultants, Inc.
Corporate data centers have become incredibly powerful while also reducing their physical footprints. However, these data centers-arguably the engines of the US economy-have played a significant role in bringing to light the frailties of the US electrical grid.
"We are encouraging IT leaders to employ a multi-pronged approach-one that ranges from demand optimization on site to active participation in the legislative process-to bring their demand for electricity under control, said Jeff Hughes, a partner in Diamond and practice director of the firm's Technology Operations services. "Failure to do so could have a detrimental impact on the growth of this critical economic sector.
"Power issues-on both the generation and consumption sides-have a direct and measurable impact on IT leaders' ability to operate their infrastructure reliably and cost effectively. We believe CIOs have the means and the opportunity to curb power consumption.
Diamond has developed a five-part framework for how CIOs can take an active role in growing industry-wide initiatives to solve this critical power problem, and demand optimization is key. Demand optimization through active IT portfolio management provides an effective means of reducing energy costs-rigorously reassessing which assets warrant further investment and which assets can be cut back. "Companies can easily make the mistake of overlooking the benefits of reducing infrastructure to support a more optimized technology portfolio, Hughes said.
Diamond research shows an increasing recognition that optimizing the technology portfolio can yield significant benefit. Eighty-nine percent of CIOs polled were aware of portfolio management practices, and 65% believed proactively managing their IT portfolio would yield cost savings and improved alignment with business objectives.
Oftentimes, demand optimization produces benefits that wouldn't have been apparent at the outset. For example, Diamond worked with a Fortune 500 insurer to help the company simplify a portfolio of more than 500 applications across 200 business functions. Diamond quickly identified 90 simplification opportunities that translated into $10 million in annual savings on maintenance, development, and infrastructure-which also helped the client improve the effectiveness of its technology governance committees by building a tighter linkage to business units.
In addition to demand optimization, CIOs should work with both hardware providers and utility companies to achieve near-term relief in managing their infrastructure power concerns. IT leaders should collaborate to bridge inconsistencies in electricity production, regulation, and transmission infrastructure. Finally, while industry group can help technology leaders find common ground, these same CIOs must help draft public policy to help the US' struggles in defining a comprehensive energy strategy that meets demands of cost, environmental responsibility, reliability, and even national security.
Hughes said: "Since information technology is the engine that propels growth across every domestic industry, the nation's IT leadership is uniquely positioned to assist in defining public policy regarding energy production, transmission, and consumption.