Reduce IT Costs

The world today is confronted with a global economic recession. The CIO is faced with enormous pressure to reduce IT cost, but in ways that optimize efficiency without the luxury of eliminating or reducing existing services. Hence terms have originated such as IT Optimization Models, Optimized IT Investments, IT Efficiency Models and so forth. Why is there so much pressure on the CIO to “do more with less?” Smart companies have realized IT and the Business are inextricably linked. IT usually represents a significant cost for the business. There is general recognition that IT technology innovation is constant, and therefore likely an area of opportunity to improve efficiency and deliver more value with less cost.

IT Complexity

While this seems like a relatively easy and straightforward matter, in practice it’s enormously complex and difficult. The very nature of how IT has historically been implemented from the bottoms up to automate specific business processes, coupled with the fact IT is a complex heterogeneous environment with a conglomerate of mismatched tools, redundant people, processes and technology, virtually makes the ability of gaining holistic transparency to IT virtually impossible. IT management has become large multidimensional optimization problem. The IT environment is not going to become less complex anytime soon. In fact if there is one thing you can count on, it’s increased complexity as new technology and IT innovations are introduced to improve various aspects of operational efficiency.

How is this accomplished today?

So how does the Office of the CIO (OCIO) accomplish identifying opportunities to reduce cost, derive transparency of impact to business services, identify risk associated with the transformation, and ultimately determine priority of cost opportunities that have the largest cost reduction impact with the least business continuity risk, and greatest efficiency gain? If pressed by the business:

Execute a broad brush percentage cut of staff resources and press remaining staff to more Outsource the service; make it someone else’s issue to optimize cost of service delivery Use innovative technology approaches such as “Cloud Computing or Virtualization” They standardize and consolidate Eliminate IT services to the business, or reduce SLA’s Leverage different license models, i.e. Open Source or SaaS

So what’s the problem?

There is enormous competitive pressure in the modern business world. The typical approaches are very much a bottom’s up approach and without context and priority to business strategy and objectives. All of the approaches are absolutely valid approaches to reduce cost, but they need to be considered with context to the business and in context with existing services provided to the business and their associated relevance and value.

How do I solve this?

What the OCIO needs is an authoritative IT system that takes a “Top Down” approach to the matter. That system should understand and prioritize existing IT services to the business, the cost associated with those services, the relative performance of those IT services, and the priority and criticality of those services for the business. That system should also understand new business strategies and initiatives, the corresponding cost and impact of those transformations and the expected business results and priority of those initiatives for the business.

Only when the OCIO has the complete understanding of cost and relevance of existing IT operations, and an understanding of cost and relevance of IT Transformation initiatives, can they derive the entire IT landscape that must be considered for optimized cost reduction. That system then has the relevant information with contextual understanding of the business to model alternative IT models and through advanced algorithms provide options with clarity to cost, impact and risk. With that derived clarity the OCIO then has the ability to execute those cost reductions with deliberate intent and alignment to the agreed upon business objectives, and measure ongoing performance of both the execution of the transformation, but also the ongoing monitoring of service delivery.

What does “Emerald City” look like?

IT and the business will work from a common business model, and speak a common language. IT will have transparency of cost of services and understand relevance and risk associated to those services. IT will work with the business on understanding goals of the cost reduction, agree upon priority and relevance of services, and with that knowledge IT can produce various alternative cost models of services with their associated risk and relevance to the business. IT will then share and collaborate with the business upon various cost optimization models, and IT will manage the transformation execution with ongoing measurement of performance of delivery and results achieved.

That day is upon us!

With Gravitant the CIO and the OCIO have that system to unify Business and IT. IT decisions to reduce cost can be optimized from a top down approach to achieve optimized IT service delivery back for the business. With Gravitant, IT and the Business will speak a common language and work from a common business model. Decisions will not be “best guesses” but be informed and be substantiated. Gravitant empowers the business with reducing cost and maximizing business performance.

Learn more about Gravitant Solutions:

Gravitant Solutions

IT Management for Project Management Office (IT PMO)

IT Management for Network Service Operations (IT NSO)

IT Management for Vendor Management Office (IT VMO)