|By David Mavashev||
|February 7, 2013 01:00 PM EST||
Ultimately, CIOs decide how best to manage their IT infrastructures to guarantee a quality of service to end users while staying within the allocated budget. Using a shared services approach for APM fits best in line with these goals. This approach can provide quality of service to all of the application owners and drastically reduce the cost.
As a general rule, corporations have multiple groups of application owners. The common practice is for each application owner to decide the APM solution required for their particular need at the time. To research the solution, one or more software vendors are contacted and when the application owner is satisfied that they have found their solution, a purchase is made. When you have numerous application owners, each individually purchasing the solution for their needs, this can be very cost prohibitive.
For example, Group A purchases Solution X, Group B purchases Solution X and Group C purchases Solution Y. All of these solutions perform the same functions, but they are purchased from two different software vendors. In just these three groups, they have purchased three sets of licenses to solve the same problem. This can result in hundreds or thousands of licenses being purchased that, depending on the size of the company, can add up to millions of dollars. For instance, if one solution license is $250,000, it's not necessarily a big expense. However, if that amount is multiplied by one hundred purchases, it adds up to $25 million.
When the purchases are not coordinated, the number of licenses purchased will exceed the number actually required. For example, if Group A needed 150 licenses, but could only purchase licenses in groups of 100, they would have to buy 200, resulting in the purchase of 50 extra licenses. The more groups that follow this pattern will result in unnecessary costs for unwanted licenses.
Looking beyond the cost of the solution, you have to consider the cost of operating, training and maintenance of the multiple solutions. Since each solution will require the application teams to be trained, procedures for usage to be created and the solution managed, the total cost will significantly increase. Once deployed to production, to have your applications run together successfully, it is important to have continuity across all solutions. When separate solutions are used, problem diagnosis, monitoring and management are different for each application, even though those applications may be interacting with each other. The lack of continuity in solutions could impact development, testing and, ultimately, the release of the application.
Through political divisions in a corporation, there are always going to be application owners that feel that the purchased solution is not the ideal product to meet their needs. Most of their theory usually lies in the push from the software vendor. In the long run, allowing individual application owners to purchase whatever solution they think they need will result in a waste of time and money. When purchasing from a "favorite" or "preferred" vendor, your application owners are going to buy the solution recommended by the vendor.
Up to this point, I have identified problems caused when not using a shared services approach. Now, I will explain why I think that adopting a cost-effective shared services approach will financially benefit your company.
In this approach, the shared services group within the infrastructure organization is responsible for the research, management, monitoring and purchase of the solution. By allowing one group to handle all solutions, you are able to purchase licenses in bulk rather than individually, thereby reducing costs. Furthermore, this would reduce the number of wasted licenses. Using a shared services approach, a company could purchase a quantity of the solution licenses to cover all the groups, in bulk, and at a substantially reduced rate per license. This would decrease the number of licenses needed for a solution, therefore reducing the total expense.
By using the shared services approach, your corporation's cost for solutions could be reduced by 10. Using the same example illustrated above, your solution licenses would be cut from $25,000,000 to $2.5 million. Another advantage in this scenario is all groups would be working with the same version of the solution. This would reduce the number of software vendors and associated administrative costs.
When the requirement for an APM solution is first identified, a possible approach would be for the first application group to take ownership of the process while coordinating with the shared services group, who will take ownership of the solution once the purchase is completed. This allows the application group to have input on the solution chosen while still maintaining the shared services approach.
By adopting a shared services approach to handle all solutions, you will be able to implement the best product for your needs - one that delivers the right services to the application owners, ensures that the specific processes of the business units are up and running, and provides high availability and reliability while significantly reducing overall costs.
Reduction of the expense on extraneous solutions would allow for better financial security, less time spent researching and purchasing a solution by individual application groups and the ability to hire additional personnel to create high-quality, user-friendly products.
The benefits of adopting the shared services approach to handle all solution transactions will progress throughout the corporation all the way up to happy shareholders.
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