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Consolidate Service Management to Drive IT Cost Optimization

Embrace a big picture approach to move beyond cost reduction.


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  • Milwaukee Health Department
  • Saskatoon Health Region
  • WR Starkey Mortgage
  • An additional ten companies contributed to this research. Due to the sensitivity of the information, their identities will be kept confidential.

Your Challenge

  • The Great Recession put IT leaders in a mode of frenzied cost cutting. As the recovery dragged along, IT budgets flattened and have recently increased only slowly.
  • IT leaders need to optimize costs and maintain competitiveness while preserving the organization’s ability to capitalize on a potential market upswing.
  • Having exhausted many of the conventional cost reduction tactics over the past several years, IT leaders have few options left for continued cost improvement.

Our Advice

Critical Insight

  • User classification opens the door to service tiering through identification of the real opportunities for service differentiation in the organization. It establishes a reasonable basis for multiple service tiers that goes beyond simply providing better service to the most vocal users.
  • Spikes in demand for different IT services do not normally occur at the same time. Share resources across services to reduce the capacity you need to allocate up-front.
  • Opening up resource purchase decisions to competitive bidding will not always bring you the strongest vendor options. Try to build multi-service vendor relationships with vendors who can cater to your user classes.

Impact and Result

  • Reduce costs while maintaining the ability to compete.
  • Plan to optimize not just your current level of expenditure but also expenditures foreseeable down the road.

Research & Tools

1. Build a strategy for optimizing IT costs

Reduce expenses while aligning services to user needs.

2. Learn about cost optimization

Build a plan for cost optimization.

3. Survey your user base for usage characteristics

Drive user classification.

4. Classify your user base

Derive appropriate tiers for user services.

5. Plan capacity across user classes and services

Reduce the amount of resource you purchase.

6. Identify opportunities for multi-vendor relationships

Build relationships with vendors that can support your user classes.

7. Prioritize your cost optimization efforts

Start with the low-hanging cost optimization fruit.

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