Optimizing Data Center Cost Efficiency

Consolidating data centers can be one of the best ways for significant and lasting cost reduction. But many organizations don't have a good understanding of the total cost of a data center including all real estate, power and cooling costs. As data center managers look to optimize their cost structure, they should fully understand the cost to operate and maintain each data center (per sq foot, per rack unit, and/or per BTU) and consider shifting resources, consolidating data centers or co-locating to less expensive space. Apptio's Technology Business Management solution helps customers model the total cost of IT, including data center costs, and provides the analysis capabilities to understand which option provides the best long term ROI.

"Establishing Cost Transparency into our data center operations was a critical first step towards helping us improve the ROI of our IT infrastructure. Apptio's activity based costing, IT best practices, and rich reporting enabled us to understand IT costs, improve utilization, and identify cost savings within six months that will justify our investment in the solution." Jeff Shipley, Director IT Infrastructure and Operations, Blue Cross Blue Shield of Kansas City

Making Better ROI-based Decisions

IT managers often have many good ideas for reducing cost in IT, including data center consolidation. The more difficult challenge is being able to accurately assess the current baseline cost structure, accurately calculate the potential ROI of a cost reduction project and presenting management with a project proposal backed with defensible data and business case analysis.

Apptio's Technology Business Management (TBM) solution provides the robust enterprise platform to track the cost of data center infrastructure and facilities at a very granular level, provide the analysis and What If tools to find and justify cost reduction projects and the reporting capabilities to track long-term project success.

Apptio provides five TBM applications designed to help manage the business of IT more effectively: IT Service Costing, Bill of IT, IT Benchmarking, IT Planning and IT Service Performance. These applications help IT and IT Finance managers manage the cost of IT, systematically reduce cost, improve the budgeting and planning processes and better communicate the value of IT to business stakeholders.

A More Informed Approach

Whether you have acquired multiple data centers through acquisition or are assessing consolidating into a larger more efficient data center, it is critically important to understand the cost ramifications of any move. The first step is to make sure you understand the total cost of operating a data center, including all facilities costs, labor and infrastructure. A true understanding of the cost drivers and their relationship to the infrastructure and IT services they support provides the foundation for all cost and ROI analysis moving forward. Apptio is designed to model unit cost, quality and other metrics and their relationship to IT services and business units, in order to drive deep analysis and better decision making.

A second area where Apptio can help is scenario planning for various data center configurations. Apptio provides What If scenario planning, allowing multiple configuration scenarios to be analyzed and ROI calculated.

Finally, post consolidation, Apptio tracks the cost of data center operations in order to showcase the cost savings and operational efficiency.

Implementing Proper Financial Management Processes

Through proper Technology Business Management processes IT can systematically reduce cost, improve productivity, increase service quality and more effectively communicate the value of IT across the organization. It may start with data center consolidation, and grow to include managing the cost and quality of all IT, forming the basis for Continual Cost Optimization. A Bill of IT provides business units with clear transparency of how their IT budget is being spent, and provides a platform to drive better behavior on the demand for IT Services. Budgeting and Planning based on TBM translates a traditional cost pool view of the budget into an IT services perspective, enables tracking actuals to budget in real time and reduces the time spent in budgeting by half. Companies implementing the complete suite of TBM functionality have realized value many times the initial investment.