Negotiating the data network labyrinth

In today’s dog-eat-dog world of high risk and financial uncertainty it can be easy for businesses to become disorientated and lost in their ongoing quest for a greater competitive edge. This can take on many forms, but it’s interesting to note that the number of banks and financial services organisations taking steps to upgrade their data networks, as a means of staying ahead of competitors, has increased hugely in recent years.

Clearly, the ‘Promised Land’ for all decision makers is an increase in overall connectivity to drive efficiency. But what’s perhaps less well known is the potential for these continually upgraded networks to turn into a complex labyrinth, which could hinder progress more than it helps.

Today, an increasing number of financial service organisations are subscribing to the view that by continually upgrading by bolting on storage, applications or services to existing data network infrastructure they are giving themselves the ability to be more agile and efficient. What few stop to consider is the enterprise-wide wake of legacy kit attached to an increasingly labyrinthine network behind them as a direct consequence.

It’s a situation that’s exacerbated by mergers, acquisitions and divestments, both on the client and supplier side. As a result, the waters are muddied, and IT decision makers are left struggling to make sense of what they have in the way of existing infrastructure before they invest in new data network equipment.

It’s also true that the larger an organisation is, the greater the likelihood they will be forced to deal with significant challenges around their data network inventories. The scale of the challenge is typically made even larger by poor inventory management. As employees leave or move without rationalising the networks they’ve built or sharing their knowledge, only serves to blur the lines even further.

In my experience, less than half of all large banking or financial services organisations actually know what they spend on data networks, or even what percentage of their corporate expenditure is spent on data network infrastructure. However, when you consider that many of these organisations have complex, highly secure networks, and that data constitutes almost two fifths of an overall telecoms bill, then one thing’s for sure – it’s certainly a substantial amount.

To solve this problem there are a number of steps to take to ensure that they are not only planning forwards, but also backwards, when it comes to managing the costs accrued by their data networks.

As a first step, an organisation needs to give themselves a regular health check to see what equipment they have, what it adds to the overall business performance and what results they have delivered. This should help IT departments to identify inefficiencies, redesign and strip out the unnecessary equipment and will allow them to move further up what I call the ‘maturity line’ as a result.

Above all, however, it’s clear that in order to beat the data network conundrum, a closer control of spend is required. The easiest way to achieve this is to shift the owners of governance closer to the business itself. Typically, governance is the last thing that’s looked at in any kind of restructuring or M&A activity, which means it can be easy to lose money as a result.

Getting this right up-front and aligning it with specific business objectives can not only save money (as much as 10 per cent of an IT budget in my experience), but can also help businesses to identify equipment they do not need. As a result, it could save organisations from getting lost in a spiral of inefficiency, and could even produce significant savings too!