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5 Tactical Ways to Control Costs

May 7, 2009
By

Valerie Arraj






A few months ago I wrote about 2009 being the year of doing more with less and referred to some broad ITSM/ITIL-based initiatives that can help you to prioritize your work and contain costs. Well, here are five more ways to identify and cut specific costs within your organization. As an added bonus, some of these suggestions will also help to reduce your overall carbon footprint.

Eliminate unnecessary, legacy services - The chances that you are supporting systems that are obsolete may seem very slim, but it happens more often than you think―especially in organizations that are extremely busy with day-to-day support activities and don’t have a good handle on their services, applications and infrastructure.

If you have an up-to-date service portfolio and/or catalog, configuration and asset repository, your ability to more readily identify these opportunities is much greater. But if you don’t, your first step is to get a handle on the list of components you do have. If you can’t locate an application owner or consumer, chances are this is a good candidate for retirement. Finding and retiring these obsolete services allows you the potential to save money on application, OS, and tool licenses; hardware and associated power costs; and support costs.


Identify and eliminate unnecessary hard copy reports - Look at your inventory of paper reports. Capitalizing on the inventory of services you may have collected to eliminate unnecessary legacy services, your first step is to identify the reports you are producing. Make sure these reports continue to be a requirement for decision making or analysis. In addition to eliminating obsolete reports, this may be a good time to consider implementing a strategy and training program for electronic content management. Minimizing hard copy reports can translate to significant savings by reducing paper consumption; reducing recycling costs; and reducing report processing support costs.

Evaluate your third party contracts - If you don’t have a central repository for all of your contracts, now might be a time to implement a supplier management process which begins with getting a handle on all of the contracts you currently have in place.

Once you’ve inventoried these, evaluate the contracts for opportunities to save money by:

  • Consolidating contracts: tactical, point solutions in siloed organizations obscure visibility combining contracts where possible to negotiate better pricing and simplify contract management.
  • Right-sizing service levels: determine if your service levels as represented in the contract remain appropriate to the business need. In busy, reactive IT organizations, contracts that automatically renew are oftentimes not reviewed prior to renewal and service levels needs may have changed leading to better contract pricing. 
  • Shopping for better pricing: where you have options for service provision from multiple vendors, now may be the time to shop around for better pricing. The economic climate is pervasive and both your current vendor and any competitive vendors may have better deals to consider.

Evaluate your capacity management strategy - Now more than ever it can be extremely beneficial to look at virtualization to assist maximizing the value of infrastructure and controlling costs. The benefits of server virtualization can include a reduction in:

  • Server hardware and hardware support costs. 
  • Energy consumption and costs.
  • Data center space and associated overhead.

Understand and manage the cost of changes - Good practice for IT governance suggests that all IT investments are managed for value. As such, it is important that you manage IT projects to assure that you are getting value for money spent. Large projects that require significant capital and resources should be managed closely to determine whether they are on track to produce the value that they were originally approved to provide. Projects that overrun costs and/or no longer will deliver the value proposed should be cut to eliminate unnecessary ongoing costs.

This is always a difficult decision once money is spent, but is important when evaluating business investment. Smaller components of work that are used to enhance or modify existing services, but don’t fall under the governance of a managed project should also be looked at for cost to value. Initial projection of cost along with post implementation review of changes along with a review of the number of changes being backed out or changes causing subsequent incidents should be analyzed on a consistent basis to drive continuous improvement into the change process to assure adequate value for the investment.

A single small change may be a small investment, but many small changes that are introducing risk and not providing value over time add up to significant cost.

Valerie Arraj is principal and managing partner for Compliance Process Partners, an IT compliance focused consulting and training company that uses service management and control objectives to help organizations lay the groundwork for compliance to regulatory and governance guidelines.


Tags: IT management, IT spending, IT budgets, IT Leadership, IT architecture,
 

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