Lowering Costs With It Infrastructure Hosting

Businesses are always looking for ways to streamline and reduce the cost of IT services

. However, the issue looms even larger in the current state of the economy. As IT spending continues to be scrutinized closely, technology managers really must do more with less. This article will provide you with information that will help you lower costs with IT infrastructure hosting.

IT INFRASTRUCTURE HOSTING: COST CONSIDERATIONS

When enterprises begin to analyze cost comparisons among their various IT management options, they consider numerous factors. IT managers must know the current costs associated with, and current state of, their IT operations. And, they must evaluate objectively the service levels associated with these costs to understand how a vendor's proposal might increase or decrease these. Other cost figures required include the total cost of ownership, the cost of hardware refreshes (and whether those will be capital or operating expenditures) and the cost impact on your disaster recovery plan. Finally, what is the cost of doing nothing and continuing as-is?

Compliance can create significant additional costs for businesses. For example, Sarbanes-Oxley, HIPAA, 21 CFR Part 11, SAS 70 Type II all come with hefty price tags. Examine if some of those costs can be deferred or eliminated by using an outsourcing vendor that can assist in the compliancy effort.

Who you select as your IT infrastructure hosting provider and how you select them can significantly impact your IT costs. To get the best fit, you need to determine what criteria matter most to you and your organization. And, do those criteria fit within cost objectives? Do you want your service provider to be onshore, offshore or something in-between? Additionally, is it important that your vendor have specific experience in a particular type of technology or industry vertical? These factors can impact price over a generic hosting vendor.

Another important consideration and one that will dramatically impact your IT costs is the type of delivery model your service provider will use. If you operate within a time and materials (T&M) model, you will pay for resource time as it is incurred. Each project, task and issue will be billed separately. You incur variable costs, results, and timelines and there typically are guaranteed service levels for service delivery. However, you have substantial flexibility in managing your projects.

With service level (SLA) models, you pay a defined fee for a defined service level. Your IT infrastructure hosting costs are fixed and your results are predictable as the vendor is managing your environment to an agreed upon service level and not the amount of time it takes to complete tasks. Most often, outsourcing providers require a contract term with the service.

Finally, the roles and responsibilities between you and the IT infrastructure hosting organization must be spelled-out. Discrepancies can wreak havoc on IT costs and performance. Your contracts, service level agreements and measurement criteria should clearly identify who will be doing what along with the associated expectations. Beware of the thought that by sharing some responsibility with the vendor when it comes to managing the environment that costs should be lower. Often times the additional account management resources required to ensure that both parties are interacting at the proper level nullifies any cost savings by sharing the work.

by: Chuck Vermillion

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