Critical Facilities Site Management Survey 2015
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1 Critical Facilities Site Management Survey 2015
2 Critical Facilities Site Management Survey 2015 BACKGROUND In a world in which everything and everyone is connected, operations cannot work as separate entities anymore. Operations need to run 24/7, and management teams need to have access to the right information anywhere at any time. In 2015, Coromatic concluded its annual Critical Facilities Site Management Survey. More than 100 site managers in different countries responded to questions about the maturity of their organizations approach to Critical Facilities site operations. The questions spanned the areas of business dependency, business demand and budgeting of sites, both for operations and site investments. Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 The respondents came from several different industries with the majority in Financial Services (27%) IT & Technology (24%) and Government & Public Sector (26%). The represented organizations were of varying size with 20% of respondents working for enterprises that employ more than 10,000 people. More than 80% of respondents stated that they managed mission critical sites where failures would have a large impact or even threaten the future of their business. In a world in which everything and everyone is connected, operations cannot work as separate entities anymore. Operations need to run 24/7, and management teams need to have access to the right information anywhere at any time. A mission-critical facilities investment is becoming an increasingly complex, strategic issue. When new headquarters or production plants are built, various measures must be accounted for at the design stage to ensure that facilities are optimized to work without disruption. A missioncritical facilities investment is becoming an increasingly complex, strategic issue.
3 Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 Well-executed site management is necessary to ensure that robust critical infrastructure is in place within any company. The purpose of the survey was to understand if site management receives the top-level management attention it requires for the operational teams to be able to execute securely and cost efficiently. Critical Facilities and Site Management The term Critical Facilities (CF) refers to technical installations with varying degrees of mission criticality and required continuous operations during certain periods. A critical facility can be a complete building or facility, e.g. a datacenter, office, hospital etc or it may be a combination of supply systems providing Mission Critical Functions (MCF) within a larger facility, such as a hospital, office or power plant to mention a few examples. A requirement for a critical facility is that an unavailability of its function will have an adverse effect on revenues, corporate image, regulatory compliance, safety, or any other mission critical objective. According to the Construction Institute at University of Hartford, Mission Critical Functions include HVAC, power, security, controls, and communications. Site management is the strategic and operational management of one or more Critical Facilities or sites, where IT, communication and network equipment is being maintained. Site Management involves different departments and stakeholders in an enterprise. First, there is IT management of the software, hardware and communication aspects of the site. Secondly, Real Estate or Facilities Management will handle the physical site considerations, be it an office, a datacenter, or a powerplant. Thirdly, third party providers might be involved in parts or all of the operations of the site, on IT infrastructure or facility level. All these stakeholders input must be balanced in order to operate the site efficiently. Critical facilities is more than datacenters
4 Market trends A trend within the area of site management is to decommission existing smaller sites at kilowatt capacity and consolidate the equipment into mid-sized or larger sites, which are more cost effective and easier to continually develop and manage in a structured fashion. A strategy chosen by some enterprises for site management is co-location, i.e. placing the site equipment in a designated space provided by a third party that also hosts other companies equipment at the same site. The co-location providers in turn follow the consolidation trend by transforming the co-location sites they provide into larger, more effective ones than before. They also acquire other smaller co-location providers, reducing the field to fewer and larger players. On enterprise level, a path becoming more common for site management is to let a third party both own and operate the specific enterprise site, or datacenter, and deliver it as-aservice (DCAAS). The site is wholly dedicated to the specific organization without sharing access or service level agreements with others. The service fees are accounted for as operating expenses, removing the need for upfront investments and capital expenditure. The increasing need for enterprises continuous access to IT resources stems from a number of things. The globalization of companies, with growth across time zones and the work force residing in several different countries, customers conducting business online outside regular business hours and the steady progress of the Internet of Things (IoT) -permanently connected devices - are just a few of these underlying factors. Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 As companies adapt to this changing landscape and move towards requiring 24/7 access to IT services and applications, most enterprises must also increase their demands on site management to minimize downtime and to make sure employees and clients receive the near constant access to the data they need, wherever and whenever they need it. The dependency on access to information and communications have made IT and Real Estate two key resources in the company strategy, rather than just departments that serve as support functions of old. The trend of consolidation, co-location and asa-service plays out in parallel with this increasing demand for constant access to all things digital.
5 Seamless access to data from and between enterprise headquarters, offices, plants, factories and datacenters, not to mention the outside world, is paramount to avoid disruptions to any business today. Moreover, as organizations consolidate into larger sites or clusters of sites, it is time for effective site management to be part of the enterprises management agenda, not just the IT or Facility Management one. Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 KEY SURVEY FINDINGS The survey conducted highlights different areas within site management; Operating expenses, Performance improvement and Strategic planning and management control. Some areas are functioning well and some show that improvements can be made if enterprises are to benefit fully from the investments they have made into their sites. In response to what the business impact would be if the sites managed become unavailable, near 80% of the respondents stated that their business would suffer. A subset of the group went so far as to notice that the overall business would be at risk. This supports the view that site management is becoming increasingly critical and that the management of sites, connecting IT and Facilities as well as third party strategies, should be treated as a part of company strategy. Operating expenses To manage site changes cost efficiently, access is most often required to business plans and to early indications of coming changes in site demand from the business. Four in five respondents state that they are able to plan site changes cost efficiently thanks to being informed well enough about the organization s strategy and changes in business demand. Furthermore, managing sites means having to balance different short-term activities and costs within a limited operating budget. The next positive finding in the survey is that four in five respondents find current operating budgets enough to meet the assumed business needs of their operations. This, together with having access to the company strategy shows that a good baseline for enterprise Management and site management to have a fruitful dialogue is already in place. However, the outlook becomes a little bleaker after that. Coromatic has more than 50 years of experience in emergency power solutions
6 Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 Performance improvement Site management include looking at long-term investments for improving site performance in line with business demands. Most organizations require business case calculations before approving funding of site investments. However, one in three survey respondents have avoided making investments to improving site performance due to business case demands being too complex. This increases the risk of the sites in questions not running at optimal capacity. Depending on what the investment need is they are probably also at greater risk of disruptions due to out of date or inadequate site equipment. The avoidance of new investments also means enterprises might miss out on the cost savings that could come with updating and improving the necessary IT equipment. Strategic planning and management control It is essential for effective site operations to have clear and well-defined business leadership demands to meet. Service Level Agreements (SLAs) are considered good practice in defining business demand on site management. The survey shows that for the past two years, two in five respondents have been operating their sites without any measurable Service Level Agreement (SLA) from management. Bearing in mind that 80% of respondents stated that the site they manage is critical, this response should open up for immediate discussions on management level regarding the clarity of business demands on sites. A starting point for establishing the criticality and vulnerability for a site is the Business Impact Analysis (BIA). A BIA is an essential component of an organization's business continuity plan; it includes identifying vulnerabilities and planning for minimizing risks for the entity it evaluates. Site management include looking at long-term investments for improving site performance in line with business demands.
7 Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 The survey shows that for the past two years, three in five organizations have not performed a Business Impact Analysis for their critical sites. This means that management might be unaware of the criticality of the site at hand and that they have little overview of the consequences of a disruption to that site. Considering again that almost 80% of site managers attest to managing a critical site, there is a clear disconnect between their assessment of site criticality and the awareness of the same at management level. Despite efforts, disruptions and downtime occur. Many go unreported to the public but a few notable site failures in the last couple of years have been brought to light. They have forced one company to issue a multi-million NOK profit warning stemming from fires and outages, another to deal with a flooding in the data center and yet another to declare impairments to their yearly results because of events directly connected to a major company site. The survey shows that for the past two years, three in five organizations have not performed a Business Impact Analysis for their critical sites.
8 KEY CONCLUSIONS To be able to determine what actions should be taken to avoid events of this magnitude, management should drive the strategy development for critical sites on which their operations rely. The survey shows us that; one in three companies currently miss performance improvement and cost reduction opportunities because site management is not discussed high enough on their management agenda. The overall lack of Business Impact Analyses and Maturity Assessments that entails critical facilities and sites impede an informed management approach and the possibility to govern site management effectively through Service Level Agreements. What top level management must address in 2015 For companies to close the gaps identified in the site management survey, a few measures must be taken. Coromatic Critical Facilities Site Management Survey REV#1 - AUGUST 2015 Analyze, act and sustain: Firstly, enterprises should obtain an informed management approach by prioritizing their facilities from a business criticality perspective. This is done by performing Business Impact Analyses where company sites and their criticality are included. One of the first questions to ask is what type of disruptions or failures each site can manage without adverse effect on the overall business of the enterprise in question. In the next step, cost drivers and potentials for performance improvement of said sites should be identified. This can be done through maturity assessments or benchmarks of site operations towards other players in the field. The BIA and benchmark findings, taken together with management expectations can be transformed into expected service levels. These should then serve as the basis for an improvement plan for site management and a discussion on the cost vs risk of not improving operations. Finally, companies should ensure that sustainable operations are in place over time by operating under management approved Service Level Agreements. Deciding on and monitoring Key Performance Indicators is also a good way of keeping track of site efficiency. COROMATIC GROUP Norrbyvägen 32, SE Bromma, Sweden Phone: coromatic.com info@coromatic.com COROMATIC Phone Website Coromatic International coromatic.com/international Coromatic Sweden coromatic.se Coromatic Norway coromatic.no Coromatic Finland coromatic.fi Coromatic Denmark coromatic.dk
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