Spend Less, Get More:

25 IT Cost Containment
Techniques
EXP Special Report
Michal Provaznk
Executive Partner
Based on research of:
Chuck Tucker and Tina Nunno

A Framework for Cost Optimization

Enable Innovation & Business Restructuring

Implement process improvement, business restructuring and

innovation
Implement cost-saving technologies in conjunction with the
business

Cost Savings within IT

Identify opportunities to reduce IT costs

IT Procurement
Get the best pricing and terms for your IT purchases
Execution of various types of cost optimization will involve different
parts of the organization and varying levels of control by IT alone.

Value

Difficulty

Joint Business and IT Cost Savings

THE BAD NEWS: For the First Time in 10 Years,

Global IT Spending Has Become Negative

Source: Gartner EXP 2009 Global CIO Survey 1Q IT Budget Update

CIOs are using a mix of cost containment

techniques that also yield business benefits
1. Understand your cost structure and potential for savings
2. Link costs to demand
3. Reduce resource costs
4. Change operating practices

Use the 25 common IT cost containment

techniques framework to identify
opportunities
Manage
Demand

1. Chargeback

2. IT PMO

3. IT Governance

4. Contingent
Workers

5. Software as a
Service

6. Capacity-onDemand

Link costs to demand

Shift to
Variable Cost

Spend Less, Get More | EXP Special Report | Oct.

2006

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4

IT cost contai

Reduce
Labor Cost

7. Staff
Reconfiguration

8. Selective
Outsourcing

9. Offshore
Outsourcing

10. Automated
Software
Distribution

11. Server/Storage
Virtualization

12. Voice/Data
Network
Reengineering

13. Voice over

Internet Protocol

14. Open-Source
Software

15. Data Center

Consolidation/
Automation

16. Standard
Operating
Environment

17. Teleworking

18. Refresh/
Upgrade Delay

19. Asset/License
Management

20. Print Fleet

Rationalization

21. Telephone
Expense
Management

22. Telephone
Bill Audit

Reduce Resource Costs

Reduce
Technology
Cost
Change IS
Operating
Model
Change
Operatin
g
Improve IS
Practice
Business Practices
s

23. Contract
Renegotiation

Spend Less, Get More | EXP Special Report | Oct.

2006

24. IT Operations
Process
Improvement

25. Apps Dev

Process
Improvement

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5

Use a mix of short- and long-term techniques

to ensure an on-going stream of benefits
Most Frequent Short-Term Cuts
2. PMO and 3. IT
governance working
jointly
7. Staff reconfiguration
18. Refresh/upgrade delay if
scheduled for current period
19. Asset/License management
23. Contract renegotiation

Most Frequent Med.-Term Cuts

11. Server storage
virtualization
10. Automated software
distribution
20. Print fleet rationalization
23. Contract renegotiation
19. Asset/License management

Across the Enterprise

Cuts
13. VoIP
17. Teleworking
21. Telephone expense
management
22. Telephone bill audit

Cuts With 3 Business Benefits

11. Server storage
virtualization
10. Automated software
distribution
20. Print fleet rationalization
23. Contract renegotiation
19. Asset/License management

Complementary Techniques
2. IT PMO & 3. IT governance
10. Automated software distribution & 16. SOE
11. Server/stor. virtual. & 15. DC consolid/autom.

Most Frequent Long-Term Cuts

8. Selective outsourcing
13. VoIP
12. Network re-engineering
16. SOE
9. Offshore outsourcing
24. IT operations
process improvement
Most Frequent Ease of Use
22. Telephone bill audit
18. Refresh/upgrade delay
23. Contract renegotiation
20. Print fleet rationalization
21. Telephone expense
management

12. Voice/data network re-engineering & 13. VoIP

19. Asset/license mgmt. & 23. Contact renegotiation
21. Telco expense mgmt. & 22. Telco bill audit

It's Time to Prepare for a Return to Business

Growth

IT Key Metrics Data 2009: Key Industry Measures:

Banking and Financial Services Analysis: Current Year

IT and he

conomy

Cost Optimization
SPECIAL FEATURE
IT Spending 2010
The Gartner Perspective

All recessio ns come to an end, and this one will, too. It is

now-as the recess ion gives way to growth-that there is great
opportunity to plan and enable your organization to take adva
ntage of a recovering economy. Glimpse into the powerful
insight Gartner can provide as you navigate through what may
be the most important year of your career.

Download the Free Booklet Now

Join the

Dialogue
I)

You '

Stay Connected
Jim Sinur, #Ga rtner,on his blog: What's
Hot in # BPM? http ://bit.ly/3Jd7Aq about 22
hours ago

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Resistance Is Futile : Andrea DiMaio ,
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Cost Optimization Spotlight

Gartner Fellows Interview:Ivan
Seidenberg, Chairman and CEO of
Verizon and New Chairman of Business
Roundtable
CEOs of so me of the largest U.S. corporations
believe the economy will improve, but it will
not return to pre-recession levels until the end
of 2011.

Cost Optimization Fundamentals

It Is Time to Rethink the IT

11

Get the best pricing and terms

Gartner ensures you get the best va lue
from yo ur IT purchases.Gartner
analysts and consultants review thous
ands of vendor contracts and proposals
each year.
Read More

Identify opportunities to reduce

IT costs
Leveraging proprietary data, Gartner
shows you exactly whe re yo ur spe nd
is high relative to best-in-class peers.

I Michael Gerrard I Susan

Managing in a Downturn: Focus on

Cost Optimization will Linger
Kurt Potter

Cost Cutting in IT: When to Use

Zero Based Budgeting

Implement cost-saving
technologies
Gartner ensures your success in
impleme
nting
priority
technology
initiatives
in
conjunction with the business.
Read More

Ken McGee

Restructure, improve
processes, innovate

It's Time to Prepare for a Return to

Partner with Gartner to advance your

technology initiatives to the next
level.

Business Growth
Spend Less, Get More

EXP Special Report

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Landry

Actions You Can Take Now

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Oct. 2006
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Page 9

Banco de Mxico Consolidating and

virtualizing servers, using VoIP and OSS
Key aspects:
Background
Central bank of
Mexico
headquartered in
Mexico City
2,750 employees and
6 branches

Consolidating and virtualizing servers

avoided US$200,000 new server costs in
2006
Work of 150 Windows servers consolidated on
to 100 servers using VMware in 2006
Will consolidate to 50 servers in 2007
Reliability increased, backups easier, restores
faster, support hours & power consumption
reduced, data center space freed-up

Installing VoIP with facility upgrades

VoIP standard for all new buildings & remodels

Reduced cabling costs & replacement budget
for old PABXs pays for VoIP switches & phones

Evaluating open-source software to save

50%
Testing Apache Geronimo application server
"We have been able to keep our IS budget flat, while business has grown, by replacing older
hardware and software with new technology, and using the savings to fund further investments
in new technology."
Marcos Prez-Hernndez, Head of infrastructure department

Spend Less, Get More | EXP Special Report | Oct.

2006

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