IT Cost Optimization

IT Cost Optimization

Evaluation of the application portfolio to better align with Business objectives based on assessment of value and risk to the business, building capabilities for the future, and effectively managing IT investments, including:

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Move dialogue with the Business from “cost of IT” to “value of IT”.

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Reduce and optimize on-going IT costs while still improving service to the Business

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Build Executive level consensus based on fact-based data.

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Outcomes Delivered

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Focus on “value of IT” to the business, rather than looking at IT as a “cost”.

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Scenarios show where and how deep to cut IT costs based on current and forecasted conditions.

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Opportunities identified to reduce and/or balance the overall IT spend – covering both business-focused IT spend and IT focused spend.

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Opportunities identified to reduce the long-term non-discretionary portion of IT spending and transferring that to capability building investment, while maintaining or improving service levels.

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Understanding of the value of the savings and the level of investment required to achieve the savings.

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Roadmap to harvest the savings and build the capabilities.

Sample Questions Addressed

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What areas should the company focus on to reduce its IT costs?

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Which existing initiatives provide the greatest value? Which provide marginal or inadequate value?

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What criteria/rationale should we use to determine priorities?

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What best practices should we focus on to meet our expectations for efficiency, flexibility and value?

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What is our IT spend by category, how does it compare with comparative organizations?

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What are the governance requirements to realize cost reductions and high value IT initiatives?

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How do we realize savings/benefits? How do we measure success?

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What business decisions and cost drivers have the biggest impact on IT costs?

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How does our IT spending mix compare to industry averages?

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Does disproportionate IT spending result from weaknesses in capability?

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Where, and by how much, can we reduce IT costs without impeding business performance?

Application Portfolio Rationalization

A fact-based understanding of full costs to IT for on-going delivery of IT applications and identification of opportunities for refinement of the portfolio while maintaining service levels and reducing costs.

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Outcomes Delivered

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A fact-based understanding of full costs to IT for on-going delivery of IT applications and opportunities for refinement.

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Collection and analysis of application and infrastructure quality, quantity and cost data to right-size the application portfolio.

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Opportunities identified to reduce and/or balance the overall IT spend – covering both business-focused IT spend and IT-focused spend.

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Understanding of the value of the savings and the level of investment required to achieve the savings.

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Identification of relevant initiatives and projects, implementation timeline, and cost impact of the roadmap on the on-going IT cost structure

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Obtaining documented consensus and leadership approval for elimination, consolidation and enhancement of specific applications to enable achievement of the right-sized application portfolio and cost savings.

Sample Questions Addressed

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What is the full inventory of applications in our portfolio? Does it include applications not under IT organization’s control but in their spend budget?

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What is the Total Cost of Ownership (TCO) for the applications in the portfolio?

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What is our IT spend by category, how does it compare with comparative organizations?

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Are there applications in our portfolio that are not adding business value anymore?

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Where are the opportunities to Optimize, Keep, Replace or Eliminate applications?

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What is the road map to optimize and right-size the application portfolio?