The Value of Technology Consolidation

Published on December 22, 2017 - LinkedIn - Pieter willem van der Merwe

Unnecessary IT adds complexity and cost, reduces effectiveness and stalls innovation. The answer to this issue lies, according to Forrester research, in strategic and ongoing consolidation to eliminate redundant capabilities. There are compelling reasons why an organisation should consider technology consolidation that delivers benefits at tactical, operational and strategic levels.

Why Consolidate?

Consolidation, at its core, is the simplification of the technology environment. The past decade has seen the rise of many technologies with niche, effective uses. Organisations have acquired them, trying to understand and take advantage of new technology trends for their organisations. However, due to the lack of appropriate resources and skills, many organisations have been accumulating duplicate technology capability.

The introduction of ‘Software as a Service’ (SaaS) solutions have decoupled business functions from traditional heavy-weighted large enterprise systems, which cluttered environments. These older systems increased the amount of integration required and the data sharing across systems, networks and hosting environments.

Today, companies like Microsoft are building solutions that have a wider range of capability in a single product stack, allowing departments to reduce the level of complexity that exists in their environments. These result in improved efficiencies, reduced cost and innovation.

However, most organisations still have many discrete solutions providing duplicate capability to users. Consolidating these can benefit organisations in three ways:

Tactical Benefits

Tactical benefits are the reduced licensing costs, centralised storage, streamlined operations and the management of workstations, servers, and networks.

These benefits are the most obvious way consolidation increases productivity: by the reduction in the maintenance and management costs of technology. Most tools and software platforms require time for upkeep. By cutting down on the number of tools to be supported and managed, organisations can save up to 25% on costs and resourcing hours.

Operational Benefits

Operational benefits are the time saved through increased system availability, reduced downtime, and optimal disaster recovery. To achieve these, consider standardising assets and processes, reducing workarounds, and removing inefficiencies generated by moving between different solutions.

An example of standardisation is the time spent at the start of every remote meeting. The time wasted by setting up email invitations, video, and microphones can be avoided by a consistent and universal use of Skype for Business. The time saved with operational benefits can add up to 3-7% of baseline costs, not including productivity benefits.

The other operational benefit is that the team will be able to become experts in their domain, allowing more efficient use of training budgets. A more focused team with a deeper understanding of the singular should result in innovation by freeing up time and focusing attention. You as the employer are creating an environment for innovation through having a focused more knowledgeable workforce – with the added benefit of reducing costs of training.

Strategic Benefits

Strategic benefits emerge in improved organisational responsiveness via a flexible and scalable IT environment that can quickly adapt to future growth.

Forrester’s 2010 report found that "companies that took a holistic rather than a piecemeal approach to their virtual infrastructure were able to dramatically increase infrastructure consolidation gains and improve their flexibility, responsiveness, and resiliency – at a cost they could afford. The incremental cost saving achieved through tactical deployments will not save nearly as much as those who take a strategic approach to virtualization and consolidation."

A well planned and executed IT consolidation strategy – communicated correctly – can provide an organisation with the ability to continuously evaluate new, possibly beneficial technologies. Aligning technologies to organisational goals and capabilities will drive clear and compelling value to the organisation and the end user, as well as assist in investing limited resources into the right areas.

Should My Organisation Consider an IT Consolidation Strategy?

There are several indicators that an organisation should be pursuing with an IT consolidation strategy.

Data Disparity

If an agency has multiple repositories of data, there is significant time spent entering, maintaining, and collating that data. Disparate data create the potential for data to be significantly under-utilised across the organisation, resulting in lost value for users and customers.

Information is valuable. There is, however, a big difference between information and data. Information is like crude oil – it needs to be refined to yield useful knowledge and insight. By placing the data in one location, organisations can take advantage of data analysis technologies and mine for information, which will, in turn, suggest trends, improvement and innovation on services.

Branch Offices

Government organisations with offices in different locations are excellent candidates for consolidation. Branch offices mean the distribution of data and systems at multiple locations, causing several business information challenges.

To solve this, ensure that a centralised source of truth, in the form of an IT system, a centralised data source, virtualisation, trend source, or communications system exists. This reduces repetition of work, boosts productivity radically by synchronising efforts of users and delivers a more seamless citizen experience.

Multiple New Technologies and Vendors

The rapid pace of technology change has seen an exponential increase in the number of technologies and vendors to manage. A long shopping list of new technologies being added every year without a connection to organisation strategy may be an indication that an IT consolidation project is needed to stop the continued adding of technologies.

Getting Started

IT consolidation can be a painful and disruptive process, particularly when tools and products are removed. All technology consolidations also require a shift in culture. Usually, each technology has managers or maintenance staff looking after it, and removing it means re-evaluating the best use of their role. This organisational change of re-training staff and re-allocating roles is challenging, but is an opportunity to expand the scope, responsibility, and importance of staff from maintenance of the old to implementation of the new technology. For an IT consolidation project to be successful, the right internal champions on each level of the organisation need to be identified.

The benefits of consolidation span across functions, geographies and business areas. A company should undertake a consolidation project when the indicators appear. Consolidating technology ensures that the IT reality can serve the over-arching organisational strategy.

News Stories