Baseline Magazine - April 2008

Proving the value of IT is the most difficult side of this equation since technology becomes commoditized almost as quickly as it’s installed. Many companies do capitalize on technology to give them a strategic advantage in the marketplace, but that advantage often dissipates as their rivals adopt the same technology, rendering IT merely a cost of doing business. Hence, the plumbing analogy.

But information technology can create efficiencies and reduce operating costs, and that is where IT professionals can become heroes in the eyes of their business compatriots. The key is to present business executives with a strategic vision for IT without bogging them down with technical details. Unfortunately, that often proves more difficult than shooting an eagle on the back nine.

Based on my 20-plus years in IT management, I’ve gathered some low-hanging fruit that’s worked well for me—and should work for you too.

greatest impact on the bottom line. Through standardization, you reduce costs by minimizing complexity and buying software and hardware in bulk. And standardization often produces greater operational efficiencies, since maintenance and training are more easily executed.

Executives don’t need to know the logic behind strategic I T issues such as standardization. What they do need and want to know is that a technology initiative will improve performance and lessen the burden on the corporate balance sheets.

Troon Golf began its standardization efforts in 2001, and about 65 of our operating facilities now work within the set standards. For those properties, we’ve been able to leverage a support team of just four technicians. Contrast that with the 20 facilities that don’t work with our standards, each of which has its own I T support person or team. The leverage in standardization is roughly one-fifth the human resources required.

MANAGING LICENSES

Software license management is a challenge that plagues nearly every enterprise. Most companies either use expired/unlicensed software (out of compliance) or are over-subscribed (more licenses than are needed). Neither position is good, since expired licenses expose a company to fines for using unlicensed software, and over-subscribed licensing means that a company is paying for software it isn’t using.

The first key to strategically managing software licensing is to ensure that you have a solid system in place for procurement, deployment, license tracking and compliance management. Second, make sure that you, or someone on your team, is experienced in reading software license agreements, so that you can assess the appropriate number of licenses and decide whether software maintenance programs are in your company’s best interests.

An interesting statistic that I often tout is that 100 percent of the operating facilities for which Troon Golf has taken over management have had a software licensing issue. You heard me correctly: Every operating facility that we have taken over either has used unlicensed soft-

ware or has been over-subscribed. The good news is that we have implemented a solid software license management process—including procurement, deployment and compliance management—to ensure that all our properties are minimizing expenses and risks.

Almost all software has an annual fee to cover technical support, patches and enhancements for that application, but not all software maintenance programs are required. If maintenance is an option, make sure you understand the alternatives, as there may be a more financially suitable solution for your company.

PROMOTING TCO

Let’s start with total cost of ownership (TCO) for computer hardware. Most non-IT executives view hardware as a one-time capital expense, and they fail to understand the necessity and the benefits of a strategic replacement program. The hidden costs of powering, operating and maintaining a piece of hardware often outstrips the purchase price. For example, according to some studies, the cost of powering a storage server is three times the purchase price over the life of the device.

Maintenance and operating costs increase dramatically after a device has exceeded its planned life expectancy—usually three years. By demonstrating how technology costs increase over time if an organization doesn’t retire and replace devices, IT professionals stand a better chance of gaining support for a strategic replacement program.

In the late ’90s, before Troon Golf introduced a strategic technology refresh plan, our facilities spent an average of $800 per month on support. Eight years and one hardware refresh plan later, the monthly average support is down to $300—a saving of roughly $50,000. Throw in cost savings from increased user productivity, less downtime and reduced data loss, and you’ll realize that TCO can be optimized through a planned refresh strategy.

Through
standardization,
you reduce
costs by
minimizing
complexity
and buying
software and
hardware in
bulk.

STANDARDIZING IT

Standardize, standardize, standardize. I can’t use this word enough in front of executives. Most of them see standardization as a way to make IT jobs easier. That’s partly true: The more standardized the technical environment is, the easier management becomes. That means fewer tools and human resources are required, which results in lower costs.