IT Focus Area: Data Center
May 4, 2016
10 Steps to a Successful Data Center Strategy
Business units used to have only one option when they needed new technology: put in a request with IT for custom-built systems and wait.
Now, they have endless options.
Companies can mix and match legacy, private cloud and public cloud systems to deliver the best solution at the best price, with the appropriate risk profile.
This ability to mix and match technologies makes enterprises more agile, innovative and competitive. However, running disparate systems can lead to a number of security and business risks.
How can companies deliver all these technologies in a reliable and secure manner?
A data center strategy that considers legacy, on-premises private cloud and public cloud infrastructure requirements offers the greatest predictability. However, it also makes IT more complex — as infrastructure that lives both inside and outside the enterprise.
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The new data center strategy requires an integrated approach. This allows companies to migrate to a hybrid data center hosting solution that improves agility, security and business results.
How to Create a Data Center Strategy
A data center strategy isn’t done in a vacuum. To succeed, the project will require alignment of the business and technology goals, as well as buy-in from several areas.
Consider the following three data center strategy options: consolidation, mitigation or migration. Looking to mitigate risks while staying in existing facilities or migrating all or part of the environment to a new data center? Newer technologies, such as cloud and other hosting solutions, now play a key role in many long-term data center strategies. This is because they offer greater agility and don’t take long to implement.
Here are 10 steps to help begin the journey:
1. Get clear on the objectives for the data center strategy.
There are many reasons why companies develop or re-evaluate a data center strategy. For example, they may want to mitigate risk, reduce their costs, use new technologies or maximize their IT real estate portfolio. Before beginning, it’s vital to get clear on the reasons.
Meet with C-suite executives to discuss business strategy and ensure that the IT strategy aligns with the business goals and objectives. Also speak with a core group of sponsors —such as –infrastructure domain leads, facility manager(s), legal, IT finance and procurement — to gain an understanding of their challenges and goals. The more aligned the IT strategy is with the business, the more buy-in will occur and the easier it will be to move the data center strategy forward.
2. Understand the current IT environment.
Documenting all of the IT assets can be very challenging. What assets are in place? Where are they are located? How do they integrate together to deliver services to the business? These questions can be difficult to answer, especially if the company has recently grown due to a merger or acquisition.
To simplify the data center strategy, first gain an understanding of the current environment and any new IT assets that may have been inherited through M&A activity. Mapping the applications is a great place to start, as it will help companies understand and baseline the current environment.
3. Understand how the IT environment is evolving.
Technology is moving at a rapid pace and is bringing the IT environment along with it. Understand how the IT environment has evolved over the past three to five years, along with how it has impacted both the business and the data center facilities.
Interview domain leads to learn how any current or planned projects will impact the strategy. Also learn how executing upcoming IT projects — such as virtualization, consolidations or technology refreshes — will play a key role in the strategy and should be included in the implementation roadmap.
4. Assess the current data center facilities.
Most corporate data centers are more than 20 years old and require significant improvements to align with new technologies. Many companies have multiple data centers due to mergers, acquisitions or periods of rapid growth.
It’s critical to understand if and how these facilities align with the overall strategy. Some facilities may be ready to decommission. However, others may require a significant capital investment to align with the new business and technology objectives.
5. Determine if being in the data center business is the best option and if so, to what extent.
Companies are realizing that it may not be the best investment to build, manage and own data center facilities. Data centers are costly to maintain, as the need for significant capital expenditures (CAPEX) and operational expenditures (OPEX) to align the facilities with the business, IT and availability objectives will be a key decision factor. Is the IT department the best option to manage data center space, power and cooling … or should those resources be focused on supporting key business initiatives?
6. Understand the current data center TCO.
Most executives have the expectation that a new strategy will reduce overall operational costs. This may be the case over time, but organizations should also be prepared for a short-term cost increase during implementation of the new strategy.
Understanding the current data center capital and operational expenses will help to create a financial baseline. This baseline can be compared to alternative solutions. Work with IT finance to identify these costs, along with the depreciation schedule that will be utilized while developing the strategy’s cost model. Financials play a key part in the selection of a data center, so it’s important to get clear on the current costs before evaluating other options.
7. Document the data center requirements.
After conducting interviews with domain leads, document and review their IT and data center requirements with the core project team. Their needs will likely include exceptional availability, performance, capacity and disaster recovery. The team can validate that these requirements are aligned with other business and IT objectives. Also, consider other requirements — such as improving compliance, efficiency, operational management and time to market.
8. Develop the proposed scenarios.
Obtain consensus from all stakeholders to agree upon which scenarios should be incorporated. Possible scenarios include:
Data center build-outs
Improving current facilities
There is no one-solution-fits-all model. Most companies fall into a combination of internal and external data center services to deliver the best results. It is important for IT organizations to embrace the power of the new IT operating model and drive digital innovation.
9. Compare the current state to each proposed scenario.
Once the scenarios have been identified, along with the current data center costs, then begin the evaluation. Develop both a short-term and long-term costs model that includes all capital and operational expenses for the strategic duration.
Extending the baseline (status quo) costs over a multi-year period will allow the company to compare the financials against each scenario. The insights provided by the executives in step one will be critical in evaluating the scenarios. In addition to evaluating the financial impact of each scenario, also evaluate their benefits, risks and implementation timelines.
Once each scenario has been evaluated, create a scoring matrix to compare them against each other. The scoring matrix will help validate the recommendation and develop the business case to present it to the executive team
10. Choose the best strategy and develop a roadmap to execute it.
The best strategy is not always the most cost-effective strategy. Many companies look at finances and go with the cheapest option instead of finding a happy medium of risks versus costs.
Status quo is often the most cost-effective short-term strategy. However, the reason the data center strategy is being evaluated is to address key business challenges. Consider promoting the most risk-adverse and cost-efficient solution. This will encourage discussions and help find middle ground.
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It Takes Time to Implement a Data Center Strategy
Changes to the data center strategy and facility footprint were traditionally a once-in-a-career effort and undertaking. With the abundance of choice regarding capability, cost and hosting solutions, data center strategies are now being re-evaluated every three to five years. Underestimating the amount of time it takes to implement a data center strategy is one of the biggest mistakes companies make. Trying to implement a data center strategy internally can cause roadblocks and time delays, especially if managing a data center isn’t one of the company’s core competencies. Consider working with a partner who can help develop and implement the data center strategy, while allowing the existing resources to focus on developing and supporting IT solutions to grow the business.
The marketplace is undoubtedly driving IT to become a supply chain manager of data center capacity and capabilities to provide utility IT services to the business. As companies focus their in-house talent on driving strategic projects that help the business grow and transform, they are also increasingly turning to off-premise, professionally operated data center facilities and choosing managed hosting and cloud services to run their infrastructure. By following these 10 steps, the organization will be able to determine the right combination of hybrid data center solutions to drive efficiency, agility, and innovation.