Reduce IT Support Costs

One of the Largest and most Volatile IT Cost Drivers

Business applications are a critical set of services which IT delivers and the business depends on to interact with customers, process new orders, manage inventory, and coordinate the supply chain.

Support costs for those applications are typically around 18-20% of an overall IT budget. As a result of their significance in the total IT budget, business applications are often targeted for cost reduction by many IT departments.

IT teams that are trying to reduce their application support costs often target maintenance fees from application vendors but those typically make up only about 10% of the total support costs. Alternatively, internal personnel costs for application support tend to make up 75% or more of the overall cost for support and thus can make a great target when cost reduction is the goal.

Cost Transparency for Application Support

Many IT organizations today lack the ability to easily allocate and analyze total support costs by application or by the type of service that the support team offers to the business.

With the Apptio IT Cost Transparency solution IT organizations can very easily establish a deep understanding of their application support costs and readily identify ways to reduce costs and optimize their support operations. Support leaders can readily establish a comprehensive view of total costs and get visibility into:

• Cost of support by IT Service or by support activity
• Support cost and performance by region to optimize workload across geographies
• Cost and performance by support group/team to get visibility into workload across teams
• The impact of various methodologies on chargeback (Flat Rate, Weighted, Assigned Group)
• Change management activity costs by classification

There are a number of alternative support delivery models IT can consider to reduce the cost of support and improve service such as business process outsourcing (BPO), software as a service (SaaS), offshore outsourcing, application instance consolidations, reduction of duplicate applications for similar functions, consolidation of decentralized application support staffs, reducing the pipeline of application enhancements and movement to suite-based applications from niche products. Or IT can simply improve internal support efficiency. Whichever the approach, a better understanding of the cost drivers within application support helps identify the root problem and thus an appropriate solution. And using the Apptio ‘What If’ analysis capability, users can simulate the impact on costs of various scenarios to determine the most beneficial.

Getting Started with IT Cost Transparency

In today’s tough economic climate it has become even more important to reduce IT costs and improve operational efficiency. Many companies such as Alaska Airlines, Blue Cross Blue Shield of Kansas City and NYK Systems Research Institute are turning to Apptio to optimize cost reduction in IT. To get started today contact us for a Free Demo and on-site Proof of Concept. Or to learn more download our solution whitepaper or one of our customer case studies.