Inventory management efforts can help agencies save money in numerous ways, writes Christopher Stacy, a senior associate at Pace Harmon.
Christopher Stacy is a senior associate at Pace Harmon, an outsourcing advisory firm in Vienna, Va.
Although it has been well documented that federal agencies are struggling to meet the deadlines and objectives of the Federal Data Center Consolidation Initiative (FDCCI) launched in 2010, they should recognize that taking the first basic step of developing a thorough picture of their asset inventory could start them on the road to reaping significant benefits.
The initiative's skeptics cite a low likelihood of achieving the anticipated reduction in data centers. However, the benefits of inventory management can yield quick wins for reducing costs and improving operations, regardless of the initiative's ultimate outcome.
A report documenting progress on FDCCI released by the Government Accountability Office in July described a slow start to the five-year effort and said 14 out of 23 agencies had listed only partial information on their IT hardware inventories. Only one agency had submitted data for all inventory elements. That is not surprising given that even private enterprises tend not to focus on inventory management. The complex effort of collecting and maintaining accurate records often takes a backseat to more high-profile initiatives. Nevertheless, the lack of progress is fueling doubt about FDCCI's success.
Without question, there are many obstacles. The technical complexity of dealing with legacy applications can make consolidation costly or impractical. Uncertainty about funding can slow the execution of consolidation plans. Furthermore, future computing needs will increase data center demand, reducing the effects of consolidation.
Nevertheless, agencies should embrace creating an inventory baseline for significant cost-efficiency opportunities.
Acknowledging that some agencies lack the tools to collect the necessary information, the FDCCI Program Management Office is available to assist agencies in evaluating automated asset discovery and monitoring solutions. Having an inventory baseline supports a number of IT initiatives, including decommissioning unused servers, applications and licenses; optimizing software licensing; moving toward server virtualization; and migrating to cloud services.
Decommissioning unneeded equipment is typically the quickest and least painful route to savings. “Orphaned” equipment can represent 10 percent to 25 percent of existing servers and other equipment, and decommissioning such equipment yields savings in managed services, power, space and licensing. Those savings can be achieved relatively quickly, depending on contractual terms.
Optimizing software licenses and support can save an organization 10 percent to 20 percent on software costs. Support fees are particularly important to review given their recurring cost structure. Optimization can also reduce the risk of noncompliance with license purchases.
Server virtualization and migration to cloud-based services require higher levels of planning and expertise, but if executed successfully, they can yield savings in hardware refresh costs, managed services, power and space. Savings will vary by agency because security requirements and application profiles dictate the degree to which a hardware and application portfolio can be modified.
Furthermore, strategies for buying future equipment and software can be improved through a better understanding of the current asset inventory. Whether driving further volume discounts or optimizing the timing of events, inventory records are a first step in the assessment phase for acquisitions or upgrades.
The effectiveness of the overall FDCCI program will surely be scrutinized, but agencies should take advantage of the focus the initiative is putting on inventory management. No matter how many data centers are consolidated by 2015, getting a solid handle on inventory management will result in measurable cost-efficiencies — one of the initiative's ultimate goals.
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