A survey by Gartner Dataquest last year found that 45% of UK organisations had no plans to consolidate their systems. Why is the number so low, given that the savings consolidation can offer are so high?
Simon Walsh at Computacenter, the UK-based provider of IT infrastructure and consolidation services, offers one explanation: “Consolidation requires board-level commitment in order to succeed. You have to be given the remit to go ‘cross border’ to audit and review each business unit.” And that, of course, means overcoming considerable political, organisational and even personal issues.
Perhaps the biggest obstacle to consolidation is the deeply ingrained departmental and divisional barriers that frequently exist within organisations. Departmental managers may be unwilling to change systems or applications with which they are comfortable, and they may also express concern about relinquishing control to centralised management. For this reason, advisors say that staff must be clearly informed and educated about the changes as they occur.
The Prudential Insurance Company of America, which consolidated its operations last year, for example, set up a variety of workshops and training sessions to ensure affected employees were kept in the picture as much as possible, making sure they were comfortable with new systems as soon as they became operational.
Consolidation, however, almost always results in some support roles being rendered redundant. Rationalisation of staff is, in fact, an inevitable part, if not an outright goal, of consolidation. But as Jim Cassell, research vice president at the Gartner analyst group, suggests, “It is important to stress that you will do everything you can to find affected staff a place within the company. That makes things much easier than saying ‘look to your left, look to your right: one of you guys is going to be gone’.” In fact, consolidation can provide an ideal opportunity to re-deploy staff in more forward-looking and possibly rewarding activities.
So how do companies go about the process in a way that maximises benefits and minimises disruption? Consultants say there are six key stages.
The first stage is to set out the company’s key objectives and construct a detailed plan of consolidation. Consolidation projects that begin to unravel further down the line usually do so because of bad planning at the outset. Furthermore, objectives should not only be clearly outlined but also agreed by all those involved in the decision making.
Organisations frequently underestimate the extent of the work and the preparation that is necessary in order to yield the kind of return on investment and productivity improvements they set out to achieve. “Choosing the style of consolidation to get the best results can be complicated and may alienate the IT department,” says Iain Stephen, industry standard business manager at Compaq, which provides a range of services for organisations looking to consolidate. “Seeking external help can have a big benefit.”
Organisations also often underestimate the number of people and the amount of time that will actually be required to carry out the consolidation work. According to Stuart Murray, solutions architect at Computacenter, major consolidation projects can take six months.
The second stage of the process is the audit. This is not a task to be relished at the best of times. It entails carrying out an exhaustive inventory of every single IT resource within an organisation. One company – a client of Hewlett-Packard (HP) that prefers not to be named – found that this process in itself saved money. It found many servers, complete with database licences, that were simply unused. The audit must cover all business units and all infrastructure elements. That means including server hardware, operating systems, applications, databases, storage, disaster recovery and networks. Instances of poor project planning are often a direct result of inaccurate auditing, so it is essential to make sure adequate time and resources are applied to the process.
“Financial benefits can only be quantified if the audit is completely cross-business,” says Walsh. “If it comes to one cost centre having to make a goodwill write-down so that the overall business benefits, then this ultimately needs to be sanctioned by somebody in a very senior role.”
At the design stage, project managers should start to think carefully about current IT alliances, and how best they can be modified to improve efficiency. Zoe Frost of services marketing at HP, which recently set up a division dedicated to offering consolidation services, says, “We have found that around half of companies are working with between five and 20 different IT suppliers. So it is a case of asking: ‘Which suppliers do I actually need to work with?’ Understand your user needs and how they can be driven by the business and then engage with the right suppliers.”
It is obviously important not to forget to consider future needs and requirements. But as Computacenter has found, organisations do not necessarily know what those future needs and requirements may be, so the environment should be designed to be flexible enough to grow as and when required. “If the solution has been designed well, there should be a good one-to-one match between initial expectations and end results,” says Murray.
Most advisors say that technical diversity should not be encouraged. In other words, it is best to reduce the number of operating systems, databases, networks and other areas where confusion currently reigns. Consolidation not only gives greater control, it also means less day-to-day fire-fighting. And, of course, it means organisations can concentrate on developing deeper skills in their chosen environments, rather than maintaining a broad but shallow skill set.
“Choose standards-based environments, with as few proprietary components as possible,” urges Stephen. “Use software with freely available resources. Don’t get fenced in with something that has limitations.”
After all the planning, the migration can begin. Sufficient planning will ensure that services are migrated in a logical order, at times that will cause the least amount of disruption. Cassell suggests starting with a safe environment, which is not absolutely mission-critical, and consolidating that environment first. “Then progress step by step, learning each time you add another environment into the consolidation what the various problems are.”
The importance of timing will become particularly evident when it comes to migrating systems and services that demand constant availability. “Dealing with systems that are required on a 24×7 basis, where there is no opportunity to take the system down, is certainly one of the biggest problems,” says Murray. “You are then looking at strategies for copying data in real time.”
Another problem companies have encountered when migrating involves replicating environments that have been modified and added to within the organisation – often without sufficient documentation.
Chris Franklin, enterprise class marketing manager at HP, explains: “Quite often, customers will have done a lot of customisation to their own environment, in which case those modifications also need to be transferred over. This is typically more labour-intensive than the commissioning of the hardware, the applications and operating systems in the first place.”
Consolidation is not an exact science, and analysts and vendors both agree that learning from mistakes made in a controlled environment will provide a much greater understanding of the IT environment in the long run. And, as Jim Cassell at Gartner points out, “the world is not going to come to an end if there is a half-hour outage on an email server.
It is inconvenient, but you are not losing customers.”
Implementation is the final stage in the consolidation process and – on condition of the previous steps having been carried out successfully – it should, by this point, be reasonably self-evident how to proceed.
“The order of implementation is pivotal to the smoothness of transition from the ‘old’ environment to the ‘new’ one,” says Murray. “And care should be exercised that changes to the scope of the consolidation are fed back through the design phase to ensure that all dependencies and potential issues are caught. A consolidation exercise has the potential of running forever or of not delivering the value desired if the scope is not tightly managed.”
One major US insurance company ensured its own consolidation project was kept on track by setting up a ‘transformation team’ to ensure their goals were met.
“One customer we worked with went from managing 33 suppliers down to one,” says Frost at HP. “There has to be a clear understanding of business service levels, so that the benefits that were defined through the IT consolidation project are continuously met and revised as business changes dictate.”
For companies to gain the optimum benefits from consolidation, it is also important to work out what happens once the project is finished.
“As part of the handover there are a number of options,” explains Murray. “But if a company chooses to go it alone, once the rationalised infrastructure is in place, documentation should be created and training provided so the company knows exactly what they have and how to modify it.”
Bill McDougall at Baring Asset Management (which recently undertook a consolidation project with Computacenter) explains: “Consolidation for us is really a strategy, not just a one-off project. We’ll be continually reviewing our infrastructure and looking at ways to improve it. We are currently looking at implementing global standards across the group, which will bring a more real feeling of unified purpose and direction.”