Skip to main content

The True Cost of IT Inefficiency

Song Pang
NetBrain Technologies

A recent study found that 75% of CIOs struggle to strike the right balance between business innovation and operational excellence. Finding this equilibrium can be challenging, as focusing on operational efficiency may come at the expense of innovation and growth. For all their excitement about digital transformation, AI, or cloud computing, enterprises spend a majority of their time simply keeping the lights on.

Since IT costs can consume a significant share of revenue — between 2 and 19 percent, depending on the industry — enterprises should (but often don't) pay close attention to the efficiency of IT operations at scale. Improving operational cost structures even fractionally can yield major savings for larger organizations, often in the tens of millions of dollars. Conversely, there are long-term financial consequences to not optimizing operational processes. One way to avoid these issues is through no-code network automation.

But first, it's important to understand the context of how enterprises have fallen into a pattern of ignoring the importance of operational efficiency. For decades, IT decision makers have mistakenly assumed that the capabilities gained by new technologies have been matched by advancements in the operation of those technologies. Unfortunately, this isn't the case. Not only do organizations rely on the same highly inefficient, labor-intensive operations and maintenance (O&M) plans and practices, they're growing in scale and consume an ever-larger share of IT budgets.

And that's where the problem lies; with the increasing complexity of hybrid networks and accelerating pace of technology refresh cycles, the number of service tickets is skyrocketing. But those outdated O&M plans dictate that every month thousands of tickets must be manually assessed by a help desk or level one engineer. The result is an average mean time to repair of up to two days. Moreover, in more than two thirds of cases, problems no longer exist by the time service tickets are escalated to skilled network engineers. Problems that do persist, no matter how familiar they are to the engineers working on them or how often they've been addressed in the past, tend to be resolved with brute force using basic tools.

This network operations efficiency problem also carries significant risks and costs for the entire business. These include:

  • An increased number of service disruptions, network outages and service degradations
  • Incidents that last longer, affect more users and take longer to resolve
  • Higher security risks, more "hidden" vulnerabilities and audit and compliance failures
  • Lower available computing capacity, degraded application response times
  • Higher Infrastructure carrying costs (including warranty) for devices no longer present
  • Declining customer satisfaction, retention and valuation
  • Negative reputational impacts
  • Limited available resources across geographies, higher staffing and training costs, mismatched skill sets, and increased escalations

It's fiscally and managerially indefensible for a modern enterprise to operate with these kinds of costs and risks hanging like a Sword of Damocles over their heads.

From a strategic point of view, IT leaders need to change the way they think about IT operations and service delivery. Rather than looking purely at IT products in isolation, they need to consider the fully burdened costs of owning and operating their digital infrastructure, with the primary metric being the total cost of service delivery per unit of work.

Of course, this can be a difficult transition to make as it requires IT leaders to first accept that their existing plans don't work. However, organizations that recognize the fundamental underlying problem and make improving IT operational efficiency a strategic priority do have a powerful tool at their disposal: no code network automation.

Simply put, no-code network automation empowers IT network and support teams to do more — much more — with less. It enables every existing network resource to become an automation expert by capturing and abstracting subject matter expertise, automating repetitive manual tasks (like network configuration, outage prevention, assessment and daily operations and diagnostic troubleshooting) and performing them efficiently at scale across every hybrid cloud-connected network infrastructure. Problems only need to be "solved" once and then can be corrected automatically when they reoccur.

The bottom-line impact of this kind of modern O&M approach is significant. Even small improvements can translate to significant cost savings at enterprise scale. A multi-billion-dollar enterprise, greater network operations efficiency could reduce costs by tens of millions of dollars per year.

Despite these compelling numbers, for most organizations the potential of network automation is still largely untapped. But as networks continue to grow in scale and complexity, IT leaders must pay closer attention to the structural and process inefficiencies that are eating their IT budgets. Continuing along the same path is simply untenable at a time when they are being asked by the C-suite to do more with less. Investing in network automation will not only provide financial rewards, but tangible benefits in terms of greater network reliability, improved performance and stronger security.

Song Pang is SVP of Engineering at NetBrain Technologies

Hot Topics

The Latest

Gartner highlighted the six trends that will have a significant impact on infrastructure and operations (I&O) for 2025 ...

Since IT costs can consume a significant share of revenue ... enterprises should (but often don't) pay close attention to the efficiency of IT operations at scale. Improving operational cost structures even fractionally can yield major savings for larger organizations, often in the tens of millions of dollars ...

Being able to access the full potential of artificial intelligence (AI) and advanced analytics has become a critical differentiator for businesses. These technologies allow for more informed decision-making, boost operational efficiency, enhance security, and reveal valuable insights hidden within massive data sets. Yet, for organizations to truly harness AI's capabilities, they must first tap into an often-overlooked asset: their mainframe data ...

The global IT skills shortage will persist, and perhaps worsen, over the next few years, carrying a collective price tag of more than $5 trillion. Organizations must search for ways to streamline their IT service management (ITSM) workflows in addition to, or even apart from, hiring more staff. Those who don't find alternative methods of ITSM efficiency will be left behind by their competitors ...

Embedding greater levels of deep learning into enterprise systems demands these deep-learning solutions to be "explainable," conveying to business users why it predicted what it predicted. This "explainability" needs to be communicated in an easy-to-understand and transparent manner to gain the comfort and confidence of users, building trust in the teams using these solutions and driving the adoption of a more responsible approach to development ...

Modern people can't spend a day without smartphones, and businesses have understood this very well! Mobile apps have become an effective channel for reaching customers. However, their distributed nature and delivery networks may cause performance problems ... Performance engineering can be a solution.

Image
Cigniti

Industry experts offer predictions on how Cloud, FinOps and related technologies will evolve and impact business in 2025. Part 3 covers FinOps ...

Industry experts offer predictions on how Cloud, FinOps and related technologies will evolve and impact business in 2025. Part 2 covers repatriation and more ...

Industry experts offer predictions on how Cloud, FinOps and related technologies will evolve and impact business in 2025 ...

Industry experts offer predictions on how NetOps, Network Performance Management, Network Observability and related technologies will evolve and impact business in 2025 ...

The True Cost of IT Inefficiency

Song Pang
NetBrain Technologies

A recent study found that 75% of CIOs struggle to strike the right balance between business innovation and operational excellence. Finding this equilibrium can be challenging, as focusing on operational efficiency may come at the expense of innovation and growth. For all their excitement about digital transformation, AI, or cloud computing, enterprises spend a majority of their time simply keeping the lights on.

Since IT costs can consume a significant share of revenue — between 2 and 19 percent, depending on the industry — enterprises should (but often don't) pay close attention to the efficiency of IT operations at scale. Improving operational cost structures even fractionally can yield major savings for larger organizations, often in the tens of millions of dollars. Conversely, there are long-term financial consequences to not optimizing operational processes. One way to avoid these issues is through no-code network automation.

But first, it's important to understand the context of how enterprises have fallen into a pattern of ignoring the importance of operational efficiency. For decades, IT decision makers have mistakenly assumed that the capabilities gained by new technologies have been matched by advancements in the operation of those technologies. Unfortunately, this isn't the case. Not only do organizations rely on the same highly inefficient, labor-intensive operations and maintenance (O&M) plans and practices, they're growing in scale and consume an ever-larger share of IT budgets.

And that's where the problem lies; with the increasing complexity of hybrid networks and accelerating pace of technology refresh cycles, the number of service tickets is skyrocketing. But those outdated O&M plans dictate that every month thousands of tickets must be manually assessed by a help desk or level one engineer. The result is an average mean time to repair of up to two days. Moreover, in more than two thirds of cases, problems no longer exist by the time service tickets are escalated to skilled network engineers. Problems that do persist, no matter how familiar they are to the engineers working on them or how often they've been addressed in the past, tend to be resolved with brute force using basic tools.

This network operations efficiency problem also carries significant risks and costs for the entire business. These include:

  • An increased number of service disruptions, network outages and service degradations
  • Incidents that last longer, affect more users and take longer to resolve
  • Higher security risks, more "hidden" vulnerabilities and audit and compliance failures
  • Lower available computing capacity, degraded application response times
  • Higher Infrastructure carrying costs (including warranty) for devices no longer present
  • Declining customer satisfaction, retention and valuation
  • Negative reputational impacts
  • Limited available resources across geographies, higher staffing and training costs, mismatched skill sets, and increased escalations

It's fiscally and managerially indefensible for a modern enterprise to operate with these kinds of costs and risks hanging like a Sword of Damocles over their heads.

From a strategic point of view, IT leaders need to change the way they think about IT operations and service delivery. Rather than looking purely at IT products in isolation, they need to consider the fully burdened costs of owning and operating their digital infrastructure, with the primary metric being the total cost of service delivery per unit of work.

Of course, this can be a difficult transition to make as it requires IT leaders to first accept that their existing plans don't work. However, organizations that recognize the fundamental underlying problem and make improving IT operational efficiency a strategic priority do have a powerful tool at their disposal: no code network automation.

Simply put, no-code network automation empowers IT network and support teams to do more — much more — with less. It enables every existing network resource to become an automation expert by capturing and abstracting subject matter expertise, automating repetitive manual tasks (like network configuration, outage prevention, assessment and daily operations and diagnostic troubleshooting) and performing them efficiently at scale across every hybrid cloud-connected network infrastructure. Problems only need to be "solved" once and then can be corrected automatically when they reoccur.

The bottom-line impact of this kind of modern O&M approach is significant. Even small improvements can translate to significant cost savings at enterprise scale. A multi-billion-dollar enterprise, greater network operations efficiency could reduce costs by tens of millions of dollars per year.

Despite these compelling numbers, for most organizations the potential of network automation is still largely untapped. But as networks continue to grow in scale and complexity, IT leaders must pay closer attention to the structural and process inefficiencies that are eating their IT budgets. Continuing along the same path is simply untenable at a time when they are being asked by the C-suite to do more with less. Investing in network automation will not only provide financial rewards, but tangible benefits in terms of greater network reliability, improved performance and stronger security.

Song Pang is SVP of Engineering at NetBrain Technologies

Hot Topics

The Latest

Gartner highlighted the six trends that will have a significant impact on infrastructure and operations (I&O) for 2025 ...

Since IT costs can consume a significant share of revenue ... enterprises should (but often don't) pay close attention to the efficiency of IT operations at scale. Improving operational cost structures even fractionally can yield major savings for larger organizations, often in the tens of millions of dollars ...

Being able to access the full potential of artificial intelligence (AI) and advanced analytics has become a critical differentiator for businesses. These technologies allow for more informed decision-making, boost operational efficiency, enhance security, and reveal valuable insights hidden within massive data sets. Yet, for organizations to truly harness AI's capabilities, they must first tap into an often-overlooked asset: their mainframe data ...

The global IT skills shortage will persist, and perhaps worsen, over the next few years, carrying a collective price tag of more than $5 trillion. Organizations must search for ways to streamline their IT service management (ITSM) workflows in addition to, or even apart from, hiring more staff. Those who don't find alternative methods of ITSM efficiency will be left behind by their competitors ...

Embedding greater levels of deep learning into enterprise systems demands these deep-learning solutions to be "explainable," conveying to business users why it predicted what it predicted. This "explainability" needs to be communicated in an easy-to-understand and transparent manner to gain the comfort and confidence of users, building trust in the teams using these solutions and driving the adoption of a more responsible approach to development ...

Modern people can't spend a day without smartphones, and businesses have understood this very well! Mobile apps have become an effective channel for reaching customers. However, their distributed nature and delivery networks may cause performance problems ... Performance engineering can be a solution.

Image
Cigniti

Industry experts offer predictions on how Cloud, FinOps and related technologies will evolve and impact business in 2025. Part 3 covers FinOps ...

Industry experts offer predictions on how Cloud, FinOps and related technologies will evolve and impact business in 2025. Part 2 covers repatriation and more ...

Industry experts offer predictions on how Cloud, FinOps and related technologies will evolve and impact business in 2025 ...

Industry experts offer predictions on how NetOps, Network Performance Management, Network Observability and related technologies will evolve and impact business in 2025 ...