Optimize or Perish?

Saturday, July 04, 2009

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It's the enterprise's unwritten slowdown mantra for 2009: Optimize or perish.

And so there's intense pressure to optimize resources. But howfar do you go? At which point do you lose productivity-or busi-ness?

The first casualty is the 'capex refresh' cycle. Most enterpriseshave a refresh policy: software services companies would usuallyupgrade key hardware (like developer PCs) every 3 years.

That's not happening. Even the cash-rich Infosys and TCS genrehave slowed down on hardware refresh. Even hardware sales folkshave seen their own laptop upgrades slow down. “Why aren't youusing those nice, light, colorful things you're selling?” Embarrassedpause.. then, “Oh, we have a capex freeze..”

Prasanto K Roy (pkr@cybermeda.co.in)  is president and chief editorat CyberMedia's ICT Publications. You can find him at twitter.com/prasanto

And if that's happening with hardware, you can imagine theimpact on software refresh. Microsoft still gets by because of li-cense-fee arrangements, but the pressure on all software productvendors is intense, as new or upgrade sales slow down.

That's not unlike a hiringfreeze. “No replacements!!”But if a key manager leaves, what then?

If key hardware or software fails, what do you do? Suspend op-erations?

Blanket, universal freezes don't make sense, whether on capexor HR. That isn't optimization.

Instead, optimization is about intelligently evaluating resourcesto see where you can squeeze more productivity, space, power.

Take energy and power backup costs-just the night-time en-ergy use by a company, where there may be just a handful of peopleworking, so all servers are running. Others may have left their desk-top PCs running, so the whole network is alive, and the generatorskick in when the power fails. Needless use of diesel, night-shiftgenset operators...

So you'd need a hard audit to identify what is required to keeprunning. Can PCs be powered down automatically? Can serverspower down and leave only one server running essential serviceslike connectivity? You may not even need the genset then: the UPSwill do, supported by emergency lights or inverters.

An energy audit can bring up surprising results-and lead tosavings well beyond your electricity bill. Es-pecially if you have significant backup costs.If there's any expansion in a location, an energyaudit can save you money by letting you “livewithin the backup envelope”--and cut down newcapex.

Where else do you learn what to optimize?Well, there are some very good, free optimizationconsultants out there. They're called customers.

At a retail store, I stood in a checkout queue for 40 minutes andcounted: seven minutes per customer. Someone behind me got dis-gusted, dumped her cart, and walked off. The checkout clerk saidhis terminal was slow and keys kept “getting stuck”; it was due forreplacement last year but there was a freeze on equipment purchase.

How much business were they losing? I'd put the ROI break-even on a new terminal at less than a month, not counting thingslike customers who don't return.

So that enterprise-a major national retail chain-got thewrong end of the stick. It thought optimization was stretching equipment life by two years.    While it was really about enhancing as-set utilization and productivity

They needed to cut turnaround from six minutes to oneminute-to ramp up business and retain customers-and investfor that. Then they'd have really understood optimization.

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