Alignment Is Critical
In almost every customer briefing that I have (over 70 in the last 4 months), I find one missing piece that can costs these companies 10’s of millions of dollars every year. It’s the alignment between Facilities and IT.
My primary job at Sun is to bridge the gap between the Facilities organization, who manages the real estate portfolio and executes projects in the datacenters (compression, expansion, retrofit), and the IT & Engineering organizations that actual occupy and use the space. I’ve only found a few companies that actually have a team like mine (GDS). I don’t think it is clear to most that not having that role, seriously limits the capabilities of both sides. Facilities is worried about cost to operate the business Real Estate portfolio. This is everything from the type and amount of toilet paper in the bathrooms to the utility bills for these high density cabinets in the datacenters. They are driven by cost reduction and usually don’t have the luxury of innovating or driving next generation solutions. IT on the other hand has to constantly deliver performance in the datacenter. They too are also worried about costs, but uptime and performance of their datacenter equipment is the most critical aspect of their business. They will purchase more hardware to fulfill a business need and expect that it will be able to run in their datacenter. The challenge is, this is not normally discussed with facilities until orders are placed or, worse yet, when the equipment arrives. Then it becomes a reactionary exercise to bandaid the problem to fulfill the need. It can be very costly and inefficient, let alone the time it takes to get it done.
My team is responsible to bridge this gap and I like to think we do it pretty well. By being able to speak the language of IT & Engineering and understand the technology and business drivers they have, we can distill the requirements and implement the right solution in the facilities side. On the other side of the coin, we can understand how to squeeze every last ounce of efficiencies out of the datacenters by deploying innovative, future proof designs. These designs usually add about 10-15% to project costs, but literally can save 100% of the cost in the future. Most data centers that grow to double their capacity would require facilities to do major retrofit, or bandaid work or worst yet, build another datacenter.
Bottom line, Workplace Resources (WR) has been a key enabler for Sun to beat it’s 4% operating margin target for FY07 by 4.4%. We were able to achieve 8.4% operating margin without sacrificing the performance of the IT & Engineering datacenters. The customers are better off after the consolidations than they were when we started. They are not only able to handle today’s high density, but they can quickly scale for future equipment loads. If we had not been there to translate/bridge, we would have had a short term cost reduction, but had even more capital outlay in the future. This is in the 10’s of millions of dollars every year.
It feels great to know that an operations business can be the enabler for significant savings -and- provide flexibility for our customers to seize those business opportunities when they arise. It sounds like I’m trying to justify my teams existence, but it is the reality of the business. Any company that has a large technical infrastructure, can’t afford not to have someone to bridge this gap. It’s all about costs, and this is a small but very effective investment.
This strategy is detailed further in the Alignment solution brief that we published for the launch on 08/21. Please feel free to comment if you agree, disagree or even want further discussion/information about this.