Business case. IT antiques

I present to you the new management case.

Introduction

Real names have been changed, and some details and names have been omitted, in the interests of participants in past events. The company "Ilf and Petrov" trying to optimize the ongoing economic activity, hires a new CEO Osip Shor. The company worked in the field of accounting and consulting.

Problem

The recession of 2008–2009 severely affected the company's operations and health, as well as the entire global economy as a whole. This ultimately led to a significant restructuring, which was partially completed in April 2010 and led to the need for a new approach to managing the company.

Many established approaches to back-up and front-office activities were re-evaluated. If the current situation is described in a few words, then most likely it looks like a more careful control over any aspects of the company, its resources and business processes. The previous materials of the financial statements were studied more thoroughly and the entire personnel policy was reviewed.
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These processes also had a significant impact on the selection of the company's management, and a mutual one. Each party to the contractual relationship has become more picky about their duties and rights. The sober candidates approached the assessment of the future employer, and the company more rigorously assessed the capabilities and abilities of the candidates. However, some critical areas were missed, which soon became quite obvious.

Industry dynamics from 2007 to 2013

^{According to Kommersant}

As before, and in the current situation, in the process of choosing a new general, IT-director did not participate in this event. During the first visit of the new CEO to the department , Skeet Aytishnik requested a meeting. As a result of the meeting, Osip quickly became clear that the entire IT infrastructure and systems were terribly outdated, and more importantly, the department’s critical issues were generally missed during the interview and during the intercession. The CEO found out that all of the company's critical applications ran on servers and communication equipment that were quite old for such equipment from seven to ten years.

No less disturbing, was the discovery of the lack of ancillary equipment. The improvised data center was located in the premises of one of the branches of the company without air conditioning, which only miraculously has not yet led to overheating and subsequent equipment failure. Lack of backup power and completely led to the shock. In many ways, the capabilities of modern smartphones simply eclipsed the entire existing infrastructure. It was also worth noting that there was a backup system, but its ability to perform its functions was uncertain. To top it all, ITishnik quite clearly assessed Osip Shor's focus on optimizing and transferring the information department to another branch and quickly resigned.

The current system could not immediately affect the company's revenues, but a sudden failure of file servers or a power outage on one fine morning could lead to dire consequences. A business without access to e-mail or intranet will simply not be able to work with clients or make payments to employees. At the same time, the functionality of CRM is no less serious a question that can complicate the life of a company, but its shortcomings have faded compared to the very real possibility of the company to be taken out of business at any time by the enormous amount of current hardware infrastructure.

Reversal of the problem

Thus, Mr. Shor’s thoughts quickly focused on how to solve the company's information infrastructure problems. In this connection, several solutions appeared at once:

1. Move existing equipment to a commercial collocation facility to reduce the likelihood of a potential epicaphile. Such facilities have a wide range of auxiliary equipment (proper temperature control, backup power systems, etc.)
2. The purchase of new equipment and its installation in proper conditions, most likely, in a commercial establishment of a collocation, as described in the first paragraph.
3. Migration of all functionality to the cloud and the complete elimination of the internal hardware infrastructure.

Serious attention was paid to the elaboration of all options. The first option provided for the lowest initial costs, but did not solve the fundamental problem of obsolescence of hardware and software. The age of servers and other components of the infrastructure, which represents enormous technological risks, was not mitigated by its use.

Most small and medium-sized enterprises used a scenario similar to the second option to meet their IT needs. If a company owns or leases a facility that offers suitable conditions for maintaining a data center, this option is the place to be. But on the other hand, if you need to build a data center from scratch, as a result, you have to spend money on backup power, air conditioners and their maintenance, network services, this can cost you a lot of money. In this case, it is more economical to use the services of a commercial collocation facility. Most often, the second option looks the most reliable and convenient. On the face of the necessary security, as well as the tranquility of ownership and direct control of the company's equipment.

Option number three involves the decision to outsource the full cycle, in which the support of the IT infrastructure is performed by the subjects of commercial cloud capacity. Modern cloud technologies provide access to the network of a common pool of tunable computing resources. The supplier guarantees the availability of sufficient capacity, backup, security and functionality, which not every company can easily implement on its own. Most of the outsourced facilities are provided with reliable fully redundant systems with the required physical and virtual security operating 24/7.

results

It is not surprising, but the decision based on the third option turned out to the great surprise of Osip, the most cost-effective, both in terms of total investment and in relation to future costs. On the move, after the implementation of the solution, the company was faced with multiple cases in which the services provided by the cloud platform turned out to be particularly useful.

One of the main applications of the company before the transition was extremely slow. It soon became apparent that one of its own servers worked at the limit of its capabilities, with almost one-hundred-percent processor load, which in turn had a negative impact on the speed of work and usability. When using its equipment, the company would have faced the purchase, installation and configuration of the appropriate number of additional processors.

In working with the cloud provider, the company simply requested additional capacity. The company also ceased to maintain in the staff of the relevant specialists and engage in the maintenance of the main and auxiliary systems. All the necessary changes to the infrastructure configuration turned into a “black box” , but with all its advantages and, probably, its drawbacks. It should be noted that the cost of back-office functions are poorly paid back, not providing return on investment. Due to the difficult circumstances in which many enterprises find themselves in times of crisis, migrating computing power to the cloud can provide a cost-effective alternative to more traditional approaches to building and managing the necessary internal or rental infrastructure solutions.

In addition, the outsourcing of many tasks allowed management to focus on critical activities that generate revenue and profit growth.