IT infrastructure managers must simultaneously capture the next rounds of efficiencies, accelerate the transition to next-generation infrastructure, reduce risks, and improve organizational execution.
January 2014 | byBjörn Münstermann, Brent Smolinski, and Kara Sprague, McKinsey & Co.
This year has been tough for many organizations that manage IT infrastructure—the hardware, software, and operational support required to provide application hosting, network, and end-user services. Highly uncertain business conditions have resulted in tighter budgets. Many infrastructure managers have rushed to put tactical cost reductions in place—canceling projects, rationalizing contractors, extracting vendor concessions, and deferring investments to upgrade hardware and software.
We have conducted more than 50 discussions with heads of infrastructure at Fortune Global 500 companies over the past six months to get a sense of the issues they are wrestling with. Clearly, infrastructure leaders must meet 2013 budgets while ensuring they can address critical challenges in 2014 and beyond. They can do so by pulling 11 levers.
Capture the next round of efficiencies
There is no indication that 2014 will be dramatically easier from a budgetary standpoint than 2013 has been at many companies. Even as infrastructure organizations lock in 2013 savings, they need to take several actions to establish a pipeline of cost-improvement initiatives that will create space in their budgets for 2014 and 2015.