Over the next five years, IT automation will overtake offshoring as the next major efficiency trend in IT. For many companies, offshoring has been a way to reduce IT costs by lowering the cost of labor and facilities. However, offshoring is demonstrating diminished returns as IT infrastructure grows in complexity and service levels become more demanding. The decline in offshoring is already happening. According to the BDO Seidman 2009 Technology Outlook Survey, an annual survey of CFOs conducted in January of 2009, only 42 percent of the 100 CFOs surveyed said they have operations outside the U.S., compared to 79 percent last year.
Despite this, cost problems are not going to go away and companies will still need a way to achieve cost savings in IT operations.
The answer to this problem will be IT automation. Automation technology will drive further optimization and lower the cost of IT operations. In fact, automation technology not only drives significant cost savings, but also enables the better use of IT infrastructure and delivery of service.
Several factors are contributing to the coming age of IT automation, including cost reduction pressures and the need to align all business processes in a complex IT environment.
The first and most obvious reasons for IT automation are the opposing demands for cost reduction and improved service levels and capability. It is clear to everyone that this recession has forced IT professionals to squeeze every bit of extra cost out of their budgets, leaving them with a bare bones operating plan. At the same time, IT organizations continue to be asked to deliver more with less and to deliver business innovation with cost avoidance strategies. These pressures place severe time constraints on existing IT staff that are monopolized by manual tasks, leaving them little time to engage in strategic delivery of services and capability.
In a survey that UC4 conducted in April 2009, we found that an entire day out of the work week was dedicated solely to IT administrative tasks. That is a clear indication that we are wasting valuable staff cycles on well-defined, programmatic, repeatable tasks that could be handled by workload automation technology readily available today. According to a 2007 report by Enterprise Management Associates, without data center automation, the average company would have required eight additional staff, at a cost of $542,882. The survey also found that 77 percent of respondents reported that automation improved data center profitability.
IT staff and managers already recognize the benefit of IT automation software but lack the long-term perspective to carry it out. In a recent survey of Oracle Applications User Group members, UC4 found that the majority of respondents see IT process automation as a cost-saving measure, but budget restrictions in the tightening economy remain the biggest obstacle to wider adoption. More than 60 percent of respondents indicate they simply do not have the budget for automated solutions or tools.
Complex IT Environments
The most compelling reason for the rise in automation is that IT environments are becoming more complex. Enterprise systems are becoming increasingly diverse, with companies employing a range of financial, enterprise resource planning, customer relationship management and sales force automation solutions from a range of vendors. On top of that, IT environments are changing, with consolidation toward virtualized platforms and utilization of external cloud-based technologies to deliver a business service. Not only are infrastructures becoming more complex, but also the IT processes, as they typically span more than one application.
In the OAUG survey cited above, we also found that 75 percent of respondents report difficulties monitoring and managing processes that span more than one application. As a result, 57 percent of respondents report that these struggles have resulted in delays for the business, either in time-to-market or ability to integrate applications and processes.
It is easy to see in this context how administrative and management tasks would consume valuable resources just to ensure systems are up and running, let alone meeting service level requirements. Traditional job scheduling automation technology can't address this level of complexity. The days of rigid, highly structured scheduling are gone. We are operating in a world where thousands of streaming, interdependent events must be understood in the context of how they impact the ability of IT infrastructure to meet business requirements. What is required today in automation technology is real-time intelligence and just-in-time execution. This enables real-time monitoring and analysis of IT processes and allows companies to automate and connect between hybrid environments for a seamless integration, bringing visibility across processes and improved management and control over the success of transactions. Without this real-time integration, existing staff is blind to the business process impact across the greater organization.
The call to action is clear - as IT departments continue to do more with less and IT environments become more complex, the need to automate will be paramount. We are already seeing many vendors start to heavily market automation software and company adoption is increasing. The IT automation era is upon us and those companies that recognize it and adopt these technologies will have the competitive edge. Will you be one?