IT infrastructure consolidation has become a priority for many organizations—and the sluggish economy is accelerating the trend. As economic woes linger, CIOs continue to look for ways to rein in technology components such as servers, storage, desktop computers, networks and mobile devices.

However, like any other big technology initiative, there’s a right way and wrong way to consolidate. Do it the right way, and companies can save money, reduce energy consumption and improve efficiencies. Do it the wrong way, and they might wish they’d never started consolidating in the first place.

Most IT organizations have either launched consolidation projects or plan to initiate them, according to Forrester Research. Nearly 60 percent of 246 IT executives the firm surveyed in August 2007 said they had either completed or were actively executing an IT consolidation effort that involved servers, storage or an entire data center. Another 36 percent said they were considering a consolidation effort. Of those organizations considering an upcoming consolidation, 76 percent said they planned to begin within the next six months. That means that, at this point, almost nine in 10 businesses are knee-deep in consolidation projects.

As can be expected with such a wide-ranging task as infrastructure consolidation, the drivers for those projects vary greatly. Forrester found that the prime motivations for data center consolidation include im-proving operational efficiency, reducing complexity, enhancing operational staff productivity, reducing power costs, addressing disaster recovery inefficiencies, consolidating application workloads onto fewer servers and reducing overall data center costs.

Nevertheless, the study shows that consolidation is no quick-fix project: Nearly half of the survey respondents said they expected their IT consolidation to take between one and two years to complete.

This effort can pay off with significant benefits. Chris Curran, partner and CTO at Diamond Management and Technology Consultants, points to reduced costs due to a standardized technical environment, increased hardware utilization and decreased hardware footprint; increased agility through data center automation; and increased availability through greater uptime and disaster recovery capabilities.

CIOs and industry experts point to several tips and best practices for consolidating IT infrastructure:

Know your applications and understand how they apply to your organization.
“The main point with infrastructure consolidation is that it must be done within the context of an application architecture,” Curran says. “An organization has to know which applications align with the business strategy and direction and which don’t; which should be retired and when; and what kinds of functional gaps exist in the systems.”

With that knowledge, IT executives can plan proactively to retire some applications and consolidate the underlying infrastructure in a coordinated fashion. Without it, they can run into a variety of obstacles, such as unplanned outages or poor system performance in the consolidated systems.

Curran says that a Diamond client in the insurance industry conducted massive and successful server and storage consolidation only after it had completed a broad IT strategy project that included setting priorities for its applications and developing an application blueprint.

The IT department of a Diamond client in the financial services sector that was spending more than $30 million per year on storage was asked by business executives what value the firm was getting for that technology—and how costs could be reduced. “At the time, they didn’t have a business-driven set of projects and capabilities related to data, so answering that question was hard,” Curran says. “Consolidation was virtually impossible without shooting themselves in the foot regarding future needs the business might have. (Curran declined to name either client because of his firm’s relationship with them.)