It is completely without doubt that the current Covid-19 crisis is having an effect on businesses across the globe. With workforces seriously diminished either by government restrictions or by the virus itself, many companies are understandably looking at ways to reduce operating costs and increase margins. There is clearly a trade-off between operating a stable, remote-working environment, providing customers with a high quality of service, and staff retention.
Because of the recent shift to virtual work, IT’s role in day-to-day activities is now more central to survival than ever before. IT is the organisation responsible for the implementation and ongoing operation of the tools supporting virtual work. Without these tools, any hope for progress comes to a halt. So what can IT organisations do in their current environments that both cut costs and improve the performance of the digital services they are delivering? In short, optimise existing fundamental aspects of the IT infrastructure.
With optimisation comes efficiency and sustainability, and that means a reduction in operational overhead and thus reduction of costs. Many businesses will look at streamlining their workforce in such difficult circumstances. Cutting costs without sacrificing capabilities seems to be the general goal. Rather than laying workers off, or reducing salaries, companies should first consider whether their operational efficiency is maximised. An HBR study suggests that during economic downturns, cutting costs in the right areas and investing for innovation in others, dramatically increases an organisation's odds of surviving during, and thriving after, a downturn. In fact, the majority of organisations that were the most successful did not cut staff. Operational efficiency, in this context, is about employing the right resources in the right way to increase enterprises profit margins by reducing infrastructure costs and generating more revenue.
If a business wants to exit the coronavirus pandemic unscathed, then cutting your workforce is not the way to go about it. Any business that does manage to traverse the difficult terrain we are all facing needs to do so with a full workforce intact. Otherwise, how will your business continue effectively post-Covid-19? With a limited workforce, you have no chance of surviving once the world’s workforce returns to regular operational status.
Businesses are encountering inefficient infrastructure caused by lift & shift and legacy practices of over-provisioning. In reality, most businesses today run on low server utilisation rates of 10 per cent-40 per cent, which translates to a costly waste no matter the situation. But when considering the current economic climate, this is exasperated as managers try to reduce operational waste to keep costs down.
The answer is to look at the operational efficiency of your infrastructure. In doing so, you can avoid cutting down on your headcount while making improvements that will increase your margins, not your workforce. The benefits of optimisation will continue long after implementation and, as a result, your business will see improvement in the long-run, with your workforce intact. In short, the pathway to profitability does not entail reducing your headcount.
Startups, too, should be considering efficiency as the first port of call when it comes to streamlining the business from the outset. Many startups focus on growth, but a business cannot grow unless the business model is able to demonstrate efficiency from the start, as proclaimed best in the lean startup methodology. If you want your business to grow, that means ensuring it is sustainable in terms of cost. Rather than look at the size of your workforce and the potential reduction thereof, you can streamline efficiency in other areas, such as your IT infrastructure. The more efficient and robust your infrastructure is, the less you will have to spend resolving issues. This will lead to growth in the long-run.
As businesses are seeking to keep costs at a minimum, they are in turn not considering adopting new technology that allows optimisation and improves infrastructure performance. That is due to the financially and temporally expensive nature of implementing research and development overhauls. However, adopting new technology isn’t always as expensive as it might initially seem. And in fact, new technologies could be exactly the solution to businesses looking to reduce their infrastructure costs while maintaining high performance.
Adopting a pragmatic approach
There is a fine balance to be struck between cutting costs and spending that will determine the ability of a company to exit the pandemic in a stronger position than it entered it. A study headed by Harvard Business Review in 2010 concluded that businesses that manage both the cost-cutting and investment at the same time, maintaining the balance between the two, “saw a 37 per cent chance of exiting [a recession] stronger than entering.”
This balance still rings true today and should be applied when developing a strategy to exit the pandemic with your business ready to cope with the post-Covid landscape. You should use this as an opportunity to optimise the costs and performance of your business while retaining staff and maintaining a happy workforce. So, how can this be achieved?
A new approach for optimising the use of compute resources has recently emerged that might be the perfect fit for the critical operational efficiency challenges that organisations are facing. Operating systems, one of the main building blocks of any infrastructure, were designed to be generic general-purpose systems supporting acceptable performance for different applications and use cases. In their core, operating systems are trying to achieve interactivity and fairness in resource management, therefore resulting in suboptimal performance of all tasks for overall general performance. However, applications and workloads running in production are mainly designed for performing specific, repetitive tasks at high performance and scale. In these environments optimising decision making for an application specific goal such as response time or throughput, rather than interactivity or fairness, leads to significant performance improvement.
This new frontier of real-time continuous optimisation enables organisations to leverage AI-driven infrastructure optimisations that are suited specifically to the running workload.
By learning the application’s specific resource usage patterns and data flow and analysing CPU scheduling order, oversubscribed locks, memory, network and disk access patterns it is possible to identify contended resources, bottlenecks and prioritisation opportunities and solve them using scheduling and prioritisation algorithms.
To conclude, cutting swathes through your workforce is not the answer if you want to see growth within your business. You must adopt a pragmatic approach to operations if you wish to see your business thrive in these difficult times and emerge from the pandemic with a positive outlook and bright future ahead. Optimisation of your processes is key to this.
Asaf Ezra, Co-founder and CEO, Granulate