The Definitive Guide to

IT Optimization

Streamline processes, reduce costs, and increase efficiency within an organization, with IT optimization. Find out the best examples, main challenges, and possible strategies.

What is IT optimization?

IT optimization is a set of steps implemented by a company to improve operations, reduce costs and streamline activities. IT optimization can be implemented at any time.

However, any company in the process of restructuring (i.e. mergers and acquisitions) should take the opportunity to assess its assets and optimize IT functions.

Opportunities for technology optimization include:

  • Applications: All software (both in-house and third-party) used by the business to run various functions. Applications need to be rationalized and modernized to save on IT costs.
  • Services: Activities that deliver IT services to the organization. Services can be reduced during low usage times.
  • Infrastructure (servers, networks, storage): The hardware needed to run business activities. Infrastructure optimization includes upgrades and replacements to newer versions of the hardware.
  • End-user computing: all systems employees use. These are identified and optimized after analysis or upgrades.

 

Benefits

The benefits of IT optimization are numerous. Strategic IT optimization and management allow organizations to keep pace with growing business demands.

Technology optimization helps support the ongoing success of the core business, reduces costs, speeds up or automates processes, and boosts productivity. Information technology optimization is important for organizations of all sizes and in all stages of growth.

The main benefits of IT optimization are:

  • Increase profitability
    By saving money through IT optimization, businesses can use those savings to invest in development and the service they provide. This will lead to an increase in company profitability over time. 
  • Reduce costs
    Once the analysis of the current state IT landscape is done, assets can be upgraded, modified, or removed which will reduce unnecessary costs. This will help companies save money in the long run.
  • Reduce complexity
    Streamlining IT processes is a key benefit of IT optimization. By reducing the complexity of the IT landscape, applications can run faster, be more agile and provide a better user experience. Automating business processes is a great way to reduce complexity and free up time. 
  • Less compliance & governance cost
    It’s important that the company’s technology strategy aligns with its business goals. IT optimization aims for companies to negotiate contracts and remove tools with limited value. It also keeps governance costs down in the same way.
  • Boost productivity and growth
    The goal of IT optimization is to boost productivity and encourage growth over time. Automating processes, simplifying internal operations, and reducing costs across the IT landscape, all help.

 

Challenges

There are several challenges to IT optimization. The most common ones are lack of resources, workload, the rise of remote work, and lack of visibility between different areas of IT.

Organizations may not understand the value of optimizing their IT infrastructure if they don’t already run on lean or agile principles. 

  • Lack of resources and time
    One of the main challenges of IT optimization is the lack of resources and time. It takes work and time to successfully implement an optimization strategy and reap the benefits. However, optimizing the IT structure is an investment in the growth and success of the business as a whole and strengthens its foundation.
  • Repeating optimization
    Organizations that do not run on a lean or agile framework often repeat similar optimizations time and time again. With a detailed plan and targeted actions, overall optimization will be needed only every few years.
  • Rise of remote work
    As more people move to remote work, it can be harder to streamline business activities. Employees located outside of the office require new technology, security measures, and applications to work efficiently. This requires a lot of brand-new optimization measures.
  • Analytics and data management
    Organizations that lack transparency into business and IT will have difficulty optimizing their systems. Before IT can define a technology roadmap, a thorough IT assessment needs to be done to identify the current state.

Free White Paper

Application Rationalization Playbook

A guide to application rationalization for the modern enterprise.

  • When it's time to rationalize the application landscape
  • How to make the business case for application rationalization
  • A guide to rationalize your application portfolio
Download now!
Save IT Costs with application rationalization playbook.

IT optimization strategy

A strong strategy is vital to the success of any IT optimization process. The goal is to guarantee this process is not repeated and to set up the frameworks to run lean.

This is an effort that takes more than 6 months to complete. Once IT establishes the strategy, companies can begin the optimization with the right targets and set of tools.

1. Define the outcome and timeline

Before any hands-on work can begin, IT architects and strategists must define the desired IT optimization outcome and timeline of the project. This involves meeting with the correct stakeholders to produce a plan.

This plan will determine the amount of time and resources needed to achieve a successful IT optimization. During this phase the needs of the organization are defined; including processes, software upgrades, new tech, and cloud migrations.

2. Assess the current IT state

Assessing the current IT state is a key part of IT optimization. IT assessments are done to identify gaps in the current technology and highlight any risks. Assessments can be completed in all areas of the IT landscape.

Infrastructure

All hardware comes with an expiration date. Keeping a checklist of company infrastructures, such as servers, networks, and storage – will make assessing their worth easier.

End-user computing

Including devices or end-user computing such as printers, laptops, desktops, smartphones, etc.

Technology is rapidly evolving all the time, so many of these assets can age quickly or be obsolete/low-value.

Assets that are no longer useful to the company can be sold or optimized. At the same time, data centers and storage can be moved to the cloud for usage-based pricing.

Applications

Application inventory, especially SaaS became a vital part of IT – but it can be a strain on resources if not properly managed and accounted for.

SaaS services are prone to be purchased without approval and unknown within the wider company. So-called shadow IT can be identified using SaaS management platforms.

Other

Other areas of IT that should be assessed are data centers, subscriptions and memberships, outsourcing, shared services, and employee headcount.

All of these can be a strain on company resources over time if not efficiently assessed and optimized. 

3. Map business capabilities

After the current state of IT has been determined, the next step is to map the technology to business capabilities or business processes. The aim of this step is to identify gaps and redundancies, improve value flow, and highlight inefficiencies within business units.

Business capability map templates

Business capability maps provide IT experts with a visual overview of their business and technology architecture. With these maps you can make informed decisions on how to optimize business units to reach the desired future IT state.

4. Rationalize

Organizations should then rationalize their technology. This is done by standardizing technology interfaces and technology portfolios. The consolidation of systems instantly creates a leaner and more cost-effective IT infrastructure.

It is important to note that rationalizing an organization’s entire IT infrastructure at the same time can pose risks, induce costs and create inefficiencies. As a result, IT rationalization must be completed in manageable chunks.

The main areas where IT rationalization can be implemented are applications, hardware, services, and IT projects.

Rationalize unused applications

By streamlining and rationalizing applications, organizations can improve efficiency, reduce complexity, and lower the total cost of ownership (TCO) for all applications.

Application rationalization is a process that will highlight redundant applications, and non-compliant applications, and shadow IT. This sets the basis for other cost-saving endeavors. 

The LeanIX EAM's application portfolio management module and SaaS discovery feature, allow organizations to find all applications and their business values. Therefore, it enables customers to use applications solely based on the positive effect they have on the business.

The platform also allows you to balance the value and cost of all existing applications and monitor their value over time.

Eliminate unused IT hardware

By removing unused or out-of-date of date hardware, businesses can avoid paying annual server fees and storage expenses.

IT hardware elimination is a straightforward way of cutting costs and freeing up time to research and implement more cutting-edge and useful technology. The kinds of end-user hardware found in workplaces include:

  • Desktop computers
  • Printers
  • Landlines
  • Servers
  • Data storage

All of these can be upgraded, eliminated, or optimized. Hardware rationalization may include removing unused desktop monitors, landlines, or printers.

Removing irrelevant IT hardware (like a fax machine, for example) will also free up space for new systems with higher business value.

Eliminate or scale back services

Large companies rely on a lot of outsourcing, and those shared services can rapidly reduce costs. All service level agreements (SLA) can be assessed to discover which IT services can be scaled back or eliminated for some period.

These services include help desks, call centers, maintenance services, or contract workers. SLA optimization includes:

  • Auditing licenses.
  • Utilizing cloud computing services with inbuilt tools for cost optimization.
  • Shutting down and reducing instances or usage at weekends, during holidays, etc.

Rationalize IT projects

Review all current and planned IT projects. The complexity of IT projects and the various departments involved can cause confusing overlaps or redundant workloads.

Eliminating, removing, or adapting projects can save organizations huge amounts of resources. A business capability map can help businesses discover which projects can be prioritized or postponed based on their proposed value. Categorize each project by:

  1. High business value project which directly supports the IT strategy.
  2. High business value project but doesn’t directly comply with the IT strategy and should be changed.
  3. Projects that comply with the IT strategy but have little business value should be postponed.
  4. Projects that have low business value and no IT relevance. These should be abandoned.

FREE POSTER

Optimize IT Portfolio with Application Rationalization

  • Scope and inventory the application portfolio, assessing each by functional fit, technical fit, and lifecycle
  • Identify opportunities for investment or the decommissioning of redundancies, and decide on a desired future state of technology architecture
  • Plan and implement the roadmap for success, including key financial metrics and governance.
Get your free copy
Application Rationalization Framework poster

5. Optimize

Optimizing a company’s enterprise architecture will build a lean portfolio and benefit the entire organization’s business process. IT modernization is key to growth, as businesses must adapt to advances in technology so to stay competitive.

Architecture optimization is based on the application of three principles: Virtualization, Automation, and Consolidation.

Virtualize

Adapting infrastructure so it becomes more agile is a key part of IT optimization. All infrastructure assets can be optimized to meet current and future business growth. Some examples of virtualization include:

  • Removing redundant hardware by creating virtual desktop servers that run on pools of servers that can be remotely accessed.
  • Enhancing application services through grids that provide pools of application containers spread across hardware servers.
  • Improving business scalability at lower cost by using logical disk storage managers.
  • Adopt Infrastructure-as-a-service (IaaS) which will modernize IT systems automatically.

The result is a virtualized, modern data center that can maximize performance, scalability, and flexibility to support the business over time. 

Automate

Enterprise architecture and ITAM (IT asset management) are disciplines that help organizations automate and modernize all IT assets. Enterprise architecture aligns technology with business processes to create solutions that meet business goals.

EA leverages application portfolio management and business capability mapping to highlight areas of improvement and automate necessary systems and processes. Consistent application performance management (APM) such as this is an important aspect of lean IT optimization.

ITAM is a similar discipline that keeps account of technology asset lifecycle costs and risks to maximize business value. It keeps track of all hardware and software used to run business activities.

If any of these assets are not used, they can be flagged, removed, or upgraded. Businesses can benefit hugely from both EA and ITAM.

Consolidate

To benefit from a robust IT infrastructure, all data centers, applications, and systems must be consolidated. Knowing exactly where resources are being spent, it will make the process of improving systems simple and more effective.

6. Adopt cloud computing

By adopting cloud computing, businesses can provide access to their platforms, services, and tools from any device connected to the internet.

Cloud computing services are:

Companies don’t have to spend large amounts on purchasing and maintaining technical equipment or hiring large IT teams. They can use that money elsewhere.

These services also require less in-house maintenance and come with advanced protections like encryptions, access control, and layered authentication modules to protect customer data.

Furthermore, organizations can retain their competitive edge through regular upgrades and developments.

7. Follow up on impact

Final review is important to know how successful the applied IT optimization strategy was. Track and follow up on efforts by regularly revisiting changes and by tracking IT costs and data.

This will help determine if the strategy worked in targeted areas and which areas may need to be revised in the future.

If the optimization efforts were successful, large-scale optimizations won't be necessary as IT should now run leaner than before.

 

Conclusion

While IT optimization might seem complex, the process uses logical steps based on lean principles to streamline operations, save costs and boost productivity.

By leveraging EA software and the SaaS management platform, companies can create an optimized IT portfolio that will impact the whole organization from top to bottom.

This creates a robust IT foundation that requires less maintenance, less complexity, better integration, and less cost. From here on, any future IT cost optimization or cost reduction initiatives will become easier to achieve. 

Free Poster

6 Ways to Save Your IT Costs

Get more insights on how to get yourself on the right IT cost-saving path.

Download your Poster now!

6 ways to save IT costs framework
check-alt

Context and visuals to support each of your cost reduction initiatives

check-alt

Access additional cost-saving resources to support IT financial management (ITFM) and enterprise architecture (EA)

check-alt

6 easy ways to start saving on IT costs with LeanIX

Answers to frequently asked questions on IT optimization

What is IT optimization?

IT optimization is a set of steps taken to streamline processes, reduce costs and increase efficiency within an organization.

What is the use of IT optimization?

IT optimization is used for companies to gain immediate benefits by cutting costs, removing unnecessary assets, and streamlining operations. 

What is optimization in information technology?

Optimization in information technology describes the process of upgrading and improving IT processes to make them more efficient, reduce costs, and speed up productivity. 

6 ways to save IT costs framework

Free Poster

Save Your IT Costs

Support your cost reduction initiatives

Download now!