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10 Best Practices for IT Cost Optimisation

10 Best Practices for
IT Cost Optimisation

  March 31, 2020      Steven Middeldorp

The focus on costs is never more critical than today. Every organisation must as a priority attempt to optimise it’s IT costs. Enterprises that do it best will focus on cost optimisation as an ongoing discipline, not as a one-off exercise. That means your IT leaders should be developing a plan before a crisis hits and budgets are suddenly cut.

This pro-active approach will prove far superior to a “wait-and-see” approach to cost optimisation. A good framework for a “front-foot” style of IT cost optimisation can be outlined in these top ten best practice points below.

1. Make Cost Optimisation an Ongoing Discipline

IT cost optimisation is often a reactionary impulse rather than a planned strategy. Before you even begin developing your strategy, you must commit to making cost optimisation a top priority. Every dollar saved goes to the bottom line.

2. Budgeting & Planning

In order to evaluate your budget and spending, you need to consult service-based data and analytics. With an automated ITFM software solution, you will gain invaluable insight on exactly how much you are spending, and for what purposes.

3. Conduct Benchmarking

Now that you have an in-depth report on your own budget and spending, you should compare your costs and operations with those of other organisations in your industry. Implementing an automated IT Financial Management software system is an excellent way to ensure the accuracy and relevance of key IT financial metrics.

4. Forecasting & Funds Allocation

Once you have your ITFM software solution implemented, your IT team is equipped with vital information regarding industry trends and your company’s current accurately calculated costs. The CEO, CFO, and CIO can now plan how to allocate IT funds to achieve your strategic business objectives.

5. Hold Every Department Accountable

With service-based IT financial metrics, you will know exactly how each department influences your IT spend, and communicate your plans using a common language that everyone understands. No longer will your IT team impulsively cut costs on IT, based on business demands.

6. Eliminate Unnecessary Spending

When reviewing your data, your IT team will be able to identify services that are duplicated or no longer adding value to your organisation. Compare your Activity Catalogue to your Service Catalogue, eliminate any unnecessary spending or padding.

7. Make Strategic Investments

By eliminating unnecessary spending, you will discover more room in your IT budget to make strategic investments with the funds you have already dedicated to IT. Focus your spending on areas that drive the most revenue for your business.

8. Planning for Innovation

Now that you have begun to make more strategic decisions with your current IT spend, you can plan for innovation. Figure out which new elements you would like to incorporate in your environment.

9. Position for Sustainable Growth

When you no longer have to worry about managing day-to-day tasks, your IT team will be more future-oriented. This can support long-term growth while operating more efficiently on a daily basis.

10. Walk Before You Run

Start the ongoing journey and share what you find with your department heads. Make it clear that their departmental requirements drive your IT spend. Your team may not obtain perfect data on Day 1, as few organisations have all the necessary information immediately. However ongoing commitment and focus to these 10 points will have you producing timely and accurate, defensible reports and information at speed.

 

Intelligent information means intelligent decisions.

Intelligent decisions mean intelligent business.

 

For more information on how to implement our Intelligent IT Financial Management tool, within 90 days, speak to one of our team today.

CategoriesBlog

TagsIT Financial Management software, ITFM, ITFM software, IT Financial Management tool, CIO, CFO, IT Financial Management, IT financial metrics, TBM, Technology Business Management

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