IT cost effectiveness

Have you done your deed, and do you know your total IT costs?

In order to be able to identify the appropriate levers for optimizing IT costs, an organization-wide transparency of the type and amount of costs incurred is necessary. Even here, many companies fail, because besides complex and opaque cost structures, it is not possible to clearly define which costs can be attributed to IT. This makes it difficult to derive measures that will lead to a significant reduction in IT costs in the long term. In the worst case, exactly the opposite effect will be achieved, since in the case of uncoordinated action, the focus is only on the short-term aspect of the measures. What is missing here is an overall view of all areas and services of IT as well as consideration of the long-term effects on the business. A structured approach and a clear plan are essential here!

Do you have a structured procedure model to attack and sustainably reduce your IT costs?

Too often measures are defined hastily without considering the necessary steps before - usually there is no structured procedure. In this case, we are at your side with a tried and tested procedure consisting of 3 phases:

Phase 1: Creating transparency

In order to gain transparency over the existing cost structure, a profound understanding of the IT organization and the services provided is essential. This is the only way to ensure that all cost drivers are properly recorded in the subsequent phases of the analysis. It is crucial here to achieve the broadest possible, objective view of the entire organization. Focusing on certain areas of optimization too early can lead to further savings potential not being taken into account. In this case, it is a good idea to break down the cost blocks on the basis of the central units of IT (infrastructure, applications, cross-sectional functions). For each unit, transparency is then created in detail about the respective cost types (e.g. personnel, investments, contracts with service providers).

Phase 2: Identify cost drivers

Once transparency has been achieved in the existing cost structure, the central cost drivers are identified. In order to narrow down the cost drivers, the cost items must be understood in detail. A detailed analysis and quantification of the cost drivers according to their savings potential is crucial for deriving effective measures. Subsequnetly the analysis results are consolidated and clearly presented. The document serves as a basis for decision-making to determine the focus areas for the implementation of measures.

Phase 3: Derive measures

When deriving measures, in addition to effectiveness and effort, particular attention must be paid to feasibility, compatibility with the IT strategy and sustainable success. Savings can also be achieved through new approaches and technologies. Based on these criteria, the measures are evaluated in a decision matrix. The preparation of a detailed implementation plan for the prioritized measures forms the conclusion - depending on the scope, experience shows that the implementation period extends over 3-12 months.

Innovations in and for IT require financial power. This is the only way to create the conditions for transforming IT into a driver of innovation. Create the appropriate financial freedom through a structured approach to sustainable cost reduction. Are you ready?