Sinkholes Can Be Profitable with the Right Approach

Cisco Systems is out with an Executive Viewpoint piece on turning IT sinkholes into profitable areas. It could be helpful information for CIOs plagued with ongoing problems.

The report, available via, isn’t just a sales piece. Well, it is, but even sales pieces can impart wisdom. We have stripped out the marketing verbiage to get you to the salient points.

Probably most valuable is its approach to tackling this problem: IT spends 80 percent of its budget on operations management and support costs, leaving only 20 percent for innovative solution purchases.

Spoiler alert: we’re going to jump ahead to the report’s conclusion because it makes such an important point. “IT today must respond to unprecedented market transitions, new trends, business challenges and opportunities. But the burden of infrastructure operations and management makes it difficult for IT to meet those challenges and take advantage of the opportunities,” it said.

That is the basis of this observation. “CIOs are being tasked with figuring out how to move more of their ‘run the business’ operational expense into innovation efforts while at the same time cutting overall costs,” says Lui Fogolini, vice president of Cisco Systems’ worldwide services organization in the report. “They’re looking at reducing traditional budget areas by 50 percent, and that is a huge challenge that can’t be met with traditional operations management. They have to be able to do things differently.”

The piece determined, “Many enterprises are struggling to manage an infrastructure of sprawling networks often built reactively in support of separate initiatives. Today, there are software-enabled services and analytics that can help provide greater visibility and intelligence, improve efficiencies in operations management and support processes, and enhance overall performance of the infrastructure.”

A solution is offered. “By incorporating software automation, rather than relying solely on human intervention, to solve many network management and support issues, organizations can adopt a proactive, rather than reactive, strategy. The evolution of the modern automobile service model provides an apt analogy. In the past, mechanics serviced cars when there was an issue, often replacing parts to create the fix. Today’s service model is pre-emptive,” the paper says.

Research from Cisco indicates that large global customers have little visibility into the operations of their networks. Typically, 35 percent of network components are at the end-of-life stage, another 35 percent are of unknown equipment, and organizations are likely to be running multiple configurations using hundreds of different operating system versions. IT staffers are constantly in reactive mode, struggling to fix problems, tweak performance and update configurations.

The solution? Cisco says, “By automating operations, IT can automatically configure network, compute and collaboration devices and software to prevent incidents or reduce the impact of those that can’t be avoided. That alleviates time and costs spent responding to user complaints and tracking down inefficiencies and problems, and leaves more time to focus on IT transformation.”

The report emphasizes agility. “As every CIO knows, the goal of the agile organization is to be able to capitalize on tomorrow’s big opportunities. That requires continuous optimization of the IT infrastructure to keep the network and IT solutions operating at peak performance, a challenge as you evolve your environment and introduce new technologies to the infrastructure,” the report says.

It adds, “Having an effective optimization and change management strategy that incorporates automation and the latest analytics and diagnostic tools can help improve performance and availability. It can also increase speed and accuracy when implementing changes to your infrastructure.”

Keith Griffin
Keith Griffin is an award-winning business writer and editor with more than 30 years experience as a journalist. His work has been published in The Boston Globe, Medical Economist, Good Housekeeping,, the Hartford Courant, CT Law Tribune and numerous other regional publications.