IT consolidation and strategic advantages: The ultimate guide
Insights 8 minutes read

IT consolidation and strategic advantages: The ultimate guide

Uncover the strategic advantages of IT consolidation with this comprehensive guide. Learn how consolidating IT resources can help improve business performance.
Published on
June 27, 2024

In today’s rapidly evolving technological landscape, the concept of IT consolidation has gained significant traction. In fact, there’s been a noticeable trend towards consolidation in the realms of IT and cybersecurity – with many attributing this shift primarily to shrinking budgets.

But it’s more than that, as businesses across various industries are increasingly adopting strategies to streamline their IT infrastructure and cyber security measures. Notably, this trend is not merely a response to budget constraints, but a strategic move towards enhancing operational efficiency, delivering business agility, and bolstering security protocols.

According to industry trends, most organisations are actively pursuing IT consolidation initiatives to optimise resources and mitigate risks associated with fragmented IT environments.

On the security front, 75% of organisations aim to consolidate their number of cybersecurity vendors. This effort is driven by heightened concerns about operational complexity and the need to improve risk mitigation, according to Gartner research.

Whether you’re a business leader in the transport sector or a tech executive in pharmaceuticals, IT consolidation is an industry-wide challenge. Today’s business leaders must have a strategic plan for consolidation to stay competitive and efficient.

What is IT consolidation?

But first, what does it boil down to? Essentially, it’s about maximising efficiency through consolidation.

Analysts tell us that IT consolidation refers to the process of integrating and centralising IT resources, systems, and services within an organisation. Instead of maintaining disparate systems and infrastructure elements, consolidation aims to create a cohesive IT framework that enhances scalability, flexibility, and security.

What’s more, IT consolidation involves the strategic process of streamlining and optimising various aspects of a company’s IT landscape to achieve three primary goals: enhanced efficiency, cost savings, and overall effectiveness.

Trends and business drivers for IT consolidation

So, let’s explore some of the trends shaping today’s business landscape, as several key factors are pushing organisations towards IT consolidation.

Cost efficiency: With 76% of IT leaders citing cost reduction as a primary driver, consolidating IT infrastructure minimises redundant systems and slashes operational expenses associated with maintenance and licensing fees.

Enhanced security: The escalating threat landscape highlights the need for robust cyber security measures. By consolidating IT resources, businesses can bolster their defence mechanisms and mitigate potential vulnerabilities across integrated systems.

Operational efficiency: Streamlining IT operations enhances workflow efficiency and employee productivity. 67% of organisations report improved operational efficiency as a significant benefit of IT consolidation, enabling teams to focus on strategic initiatives rather than managing disparate systems.

Regulatory compliance: Centralising IT resources facilitates adherence to regulatory requirements and industry standards. This ensures consistency in data management practices and reduces compliance risks.

Pain points for tech leaders

Let’s examine the challenges. Amidst the push towards consolidation, tech leaders face several critical pain points.

Complexity and fragmentation: Many organisations struggle with disparate IT systems inherited over time through mergers, acquisitions, or departmental silos. This fragmentation leads to increased complexity in managing IT environments and hampers operational agility.

Security vulnerabilities: Maintaining security across fragmented systems poses significant challenges. Gaps in visibility and control can leave organisations vulnerable to cyber threats and compliance risks, necessitating a more unified approach to cyber security.

Cost inefficiencies: Operating multiple, overlapping IT systems results in redundant hardware, software licenses, and maintenance costs. Consolidation aims to streamline these expenses and optimise IT spending, but the initial investment and migration costs can be daunting.

Lack of scalability: Legacy IT infrastructures may lack scalability, hindering organisations from efficiently scaling operations to meet growing demands or technological advancements.

Additionally, cloud optimisation is vital to the IT consolidation story – and a major pain point for tech leaders. Businesses face significant challenges in preparing for cloud migration, such as right-sizing, platform consolidation, and assessing cloud readiness. Unmanaged cloud expansion often leads to soaring costs, making it a crucial aspect to manage carefully.

Moreover, managing multiple IT vendors adds layers of complexity and inefficiency. The absence of a standardised approach to IT asset management further complicates the landscape, leading to fragmented systems and increased operational costs.

Therefore, integrating cloud strategies into the IT consolidation plan is essential for achieving streamlined operations, cost savings, and enhanced overall efficiency.

What are the benefits of IT consolidation?

Considering all of the factors discussed, what exactly are the benefits of IT consolidation? Here are five to consider.

1. Price/cost reduction

Consolidating IT resources eliminates redundancies and reduces operational costs associated with maintaining multiple systems. This leads to significant savings in hardware, software licensing, and maintenance expenses.

2. Improved work efficiency

By streamlining IT operations, employees can access unified platforms and tools, fostering collaboration and productivity. This efficiency boost allows organisations to focus more on innovation and core business objectives.

3. Improved product and process sustainability

Centralised IT infrastructure enables easier management of resources, ensuring sustainable practices in both product development and operational processes. This contributes to reducing the organisation’s overall environmental footprint.

4. Increased quality of service

Consolidation enables IT teams to deliver consistent and reliable services across the organisation. Standardising processes and workflows enhance service delivery, leading to improved customer satisfaction and loyalty.

5. Improved information security

Centralising IT resources enhances control and visibility over data and systems. This proactive approach strengthens cybersecurity measures, safeguarding sensitive information from potential threats and breaches. According to a Gartner survey, 75% of organisations pursued security vendor consolidation in 2022. Sixty-five percent of organisations consolidated their IT systems to enhance risk posture.

How to consolidate

Considering the above, what are the steps to get you on your consolidated journey? Consider these 4 best practices.

1. Identify current state and opportunities

Assess existing IT infrastructure, identify inefficiencies, and pinpoint areas for consolidation. Evaluate scalability requirements and regulatory compliance needs.

2. Find solutions best suited for the business

Select IT solutions and platforms that align with organisational goals and enhance operational efficiency. Consider scalability, compatibility, and integration capabilities.

3. Test and troubleshoot

Implement consolidation strategies in phases to minimise disruption. Conduct rigorous testing and troubleshooting to ensure seamless integration and functionality.

4. Execute changes in phases

Implement executive changes gradually to manage transition risks effectively. Communicate changes transparently across the organisation to gain stakeholder buy-in.

Power of assessment

The journey towards IT consolidation typically begins with a comprehensive assessment of the organisation’s current IT infrastructure.

Undoubtedly, organisations often face challenges such as legacy systems, decentralised IT management, and varying levels of technological maturity across different departments or locations.

By conducting a thorough assessment, businesses can pinpoint opportunities for consolidation that align with strategic objectives, whether it’s reducing costs, improving security, or enhancing scalability.

Key steps include:

  • Identifying disparate systems and redundant processes
  • Pinpointing areas where integration can enhance efficiency
  • Addressing challenges such as legacy systems and decentralised IT management
  • Following the assessment, develop a strategic roadmap for consolidation:
  • Prioritise initiatives based on impact and feasibility
  • Consider regulatory compliance and risk management
  • Implement in phases to minimise disruption
  • Ensure clear communication and stakeholder engagement

This approach helps create a cohesive and efficient IT environment, aligning with strategic objectives like cost reduction, improved security, and enhanced scalability.

Power of cloud optimisation

Certainly, optimising cloud resources plays a crucial role in the broader IT consolidation strategy.

Without a thorough cloud readiness assessment, companies risk inefficient cloud migration, oversizing, and overlooking critical security and performance considerations. Poorly optimised cloud usage can deplete financial resources, affecting other vital investments. Fragmented vendor relationships can result in inconsistent service levels and increased costs, leading to inefficient asset allocation, lack of visibility, and overspending.

Gartner research suggests that 70% of organisations that optimise their cloud operations report significant cost savings and improved performance.

Today’s business leaders need streamlined IT management for enhanced efficiency and cost-effectiveness. That’s why unified IT solutions are essential for simplified management and reduced costs.

Leading the charge – Why Interactive for managed IT services?

Let’s face it: While budget pressures may initiate the journey towards IT consolidation, the broader benefits extend to operational efficiency, cyber security resilience, and strategic agility across industries.

By addressing pain points proactively and leveraging industry-specific insights, tech leaders can steer their organisations towards a consolidated IT future that supports sustainable growth and competitive advantage.

Partnering with trusted providers like Interactive enables businesses to navigate the challenges of digital transformation with confidence, ensuring long-term success in a competitive market.

For its part, Interactive offers comprehensive managed IT services through Interactive Anywhere, a flexible and scalable solution tailored to support IT consolidation efforts. Prioritising reliability, security, and innovation, Interactive empowers businesses to streamline operations and achieve sustainable growth.

For more information on how IT consolidation can benefit your organisation, explore Interactive’s Interactive Anywhere services here https://www.interactive.com.au/services/interactive-anywhere/

We do everything IT – anywhere.

Interactive is your all-encompassing outsourced IT managed services provider.

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