An action plan for IT consolidation

One of the biggest trends for companies over the past year is IT consolidation. In other words, IT functionality is being consolidated once again into a single corporate department, rather than distributed across multiple lines of business.

It’s a function of the economy. In boom times – such as 1997 to 2001 – CEOs buy into the idea that lines of business can manage IT services more effectively and efficiently on their own, rather than depending on hidebound corporate IT departments. Thus, in good years, each line of business operates its own autonomous or semiautonomous IT department.

But when the economy slows, corporate IT pulls ahead. CIOs argue that the only way they can control costs is by regaining control of IT. That means network directors end up inheriting a hodgepodge environment from which they’re expected to carve 20 per cent, 30 per cent or even 40 per cent of operating costs, while maintaining or improving service quality.

If this is hitting close to home, don’t panic. What follows is a checklist of action items you can use to ensure that both your CFO and your users stay happy:

Step 1: Review all telecom contracts, no matter how recently signed. Be sure to include voice, video and wireless services as well as data contracts. In addition to basics such as pricing, terms and conditions, and duration, look specifically at service-level agreements and “out” clauses – scenarios under which you can exit the contracts without penalty. Look for anomalies that can be exploited (one of our customers discovered that its land-line long-distance per-minute charges exceeded its mobile per-minute charges, meaning that encouraging everyone to use cell phones saved money). If you’re lucky, your legal or procurement department has included merger-acquisition-divestiture clauses that let you exit the contract in case of a change in the service provider’s financial circumstances, which can be useful when your carrier goes belly-up.

Step 2: Review the architecture of your voice, video and data networks. This lets you benchmark the existing parameters of the system before making changes. Check for quality-of-service capabilities, peak and average capacities, and number of hops. Don’t neglect the type and number of PBXs, and voice mail capabilities.

Step 3: Benchmark, to the greatest extent possible, the user experience as it relates to networked applications and services. Are users happy with the response times of their critical apps? Why or why not?

Step 4: Review with corporate application developers (and purchasers) the plans for new application rollouts for the next five years. Keep in mind requirements for voice and video and more traditional applications. The more you know about how the network will be used, the better you’re able to plan.

Step 5: Based on all the information above, prepare a strategic plan. Ideally, this will include a new request for proposal (or multiple requests for proposal) for new services and an updated architecture, with improved SLAs and “out” clauses.

Johnson is senior vice president and CTO for Greenwich Technology Partners, a network consulting and engineering firm. She can be reached at