In our review of how companies reduce IT costs, we have determined that there are many strategies which organizations can apply, ranging from simple “Expense Reduction” actions (e.g., eliminate travel, training, consultants, etc.) to significant “Cost Restructuring” initiatives. The opportunities that will be viable for each organization will be a function of several factors:

• Their business and IT strategies
• Current IT architecture and capabilities
• Cost reduction targets and timeframe
• What has already been accomplished
• Their ability to invest money to reap additional savings

The “Expense Reduction” strategies are the first type of actions that most companies take, but they are often not sustainable. We assist our clients in tackling the more impactful “Cost Restructuring” strategies such as improved demand management, structural cost transformation, and lean IT, to name a few. Our experienced consultants have identified and delivered dramatic reductions in costs for large and small IT organizations in a variety of industries. Based on this experience we have developed an effective, comprehensive approach to IT Cost Reduction which will help you quickly identify additional opportunities to reduce IT spending, and then help you define and execute the projects that will be required to actually achieve the target savings.

Description

The IT Cost Reduction offering provides a “play book” process that leverages three phases to help clients develop and execute strategies for effective, sustainable IT cost reduction. The “play book” process and key deliverables are outlined below:

IT Cost Reduction Calibration Phase

During the IT Cost Reduction Calibration phase, we work with our clients to analyze their current and projected IT spending, understand the cost reduction actions that have already been taken and are underway and assess the approach you are taking to manage the actions to deliver committed cost reductions. We will then identify and size additional potential IT cost reduction opportunities and work with you to set revised overall cost reduction targets.

Key Deliverables:

• IT Spending and staffing baselines
• IT project portfolio review
• Assessment of current cost reduction plans and projects, including recommendations
• Opportunities for additional IT cost reduction
• Preliminary IT spending targets
• Charter, work plan and staffing plan for the Opportunity Analysis and Planning phase
• Executive education on the financial dynamics of IT and the results of the IT Cost Reduction Calibration phase

Opportunity Analysis and Planning Phase

During the Opportunity Analysis and Planning phase we work with our clients to complete the detailed analysis of their current IT spending, and to evaluate and verify the cost reduction opportunities identified in the Calibration phase. We help you establish the necessary program governance structures, processes and team structure required to achieve true savings. We partner with our clients to facilitate the process for achieving the targeted results in the desired timeframes. The key outcome of this phase is an agreed to, detailed, resource-loaded plan for achieving the target cost reductions.

Key Deliverables:

• Detailed IT financial analysis
• Evaluation and verification of IT cost reduction opportunities, including time-phased benefits, as well as resources and investments required to achieve the benefits
• Pro-forma IT budgets for the next two-to-three years
• Cost reduction project charters, work plans, resource estimates and schedules
• Integrated IT cost reduction program plan

Cost Reduction Program Execution

It is one thing to identify cost reduction opportunities and set targets. It is more difficult to actually deliver and measure the savings. We work with our clients to manage and guide their teams in executing the IT cost reduction programs.

Key Deliverables:

• Cost reduction results!
• Project management reports (budget, schedule, issues, risks, etc.)
• Key metric tracking
• Benefits reporting
  • Benefits delivered
  • Risk-adjusted benefit projection

Target Audience

CIO, COO, CFO

IT executives and senior management responsible for the IT function and for corporate budgets and spending. Our process will assure them that their IT investments deliver value as efficiently and effectively as possible. It will also improve alignment between the IT function and the business by developing a shared understanding of the drivers of IT costs and the sources and uses of IT spending. Our approach requires that the business partners with IT in identifying and prioritizing the optimal cost reduction opportunities and resulting service levels.