Gartner recommends four part framework for IT cost optimisation

Gartner’s ‘Cost Optimisation framework’ includes two lower levels – IT procurement and cost savings within IT – focused on internal cost reductions, and two upper levels – joint business and IT cost savings, and enabling innovation and business restructuring – involving IT and the business. “Whether it’s due to efficiency, response to competitive action, meeting the needs of a powerful customer or dealing with an economic downturn, a sudden, renewed focus on IT costs can sometimes lead to ill-considered management responses,” warns Barbara Gomolski, managing vice president at Gartner. “However, experienced IT leaders know that cost-cutting campaigns seldom leave the organisation positioned well for IT innovation-enabled and new value creation-based expansion,” she adds. Gartner’s framework explores cost optimisation issues by technology, domain, technology role, supporting facts and quantifications – and provides estimates of savings and risk, as well as, in some cases, by industry sector. Kurt Potter, research director at Gartner, recommends the framework be used as a structure against which to track cost cutting programs, as well as communicating their impact on the business. “As the immediate needs of the business change in relationship to the macro-economic climate, more optimisation focus will be transferred to the higher levels of the framework, reflecting efforts to enable a return to growth,” says Potter. “As organisations focus on the higher-level cost areas, they will recognise and communicate higher levels of business benefit aside from cost cutting.”