IT Cost Reduction

Where do I focus Cost Reduction efforts?

Most IT managers know the tactics on how to reduce costs. The internet is full of ideas and advice on server virtualization, data center consolidation, desktop virtualization, application portfolio rationalization, and on and on. What many managers struggle with is understanding the TCO of their current IT services, what the key cost drivers are, and quantifying the ROI of these various tactics so they can chose the right option that has the biggest business impact. Wouldn’t it be nice to have a way to easily analyze the cost drivers of your IT services, identify a few areas for potential cost reduction projects across those services, create an ROI proposal based on actual cost data and track progress against that ROI as the project is implemented?

Apptio’s approach to IT cost transparency enables exactly that. For instance, recently a customer realized, by analyzing the cost drivers for their desktop services that they were paying 25% too much on software licensing fees. 25% of their desktops were not using a particular software program, and yet still being charged under a general site license. They were able to renegotiate the licensing terms based on the hard data revealed by Apptio, and save the company $400,000 per year.

A Process to Optimize Cost Reduction Initiatives

Apptio changes IT cost reduction strategies from a shotgun in the dark approach to a data-driven, laser focused process that optimizes savings.

Apptio is a Software as a Service (SaaS) solution that automates the modeling and tracking of IT costs providing accurate, fully-loaded IT Service costs, enabling analysis of IT unit cost drivers, comparison of internal unit costs across services, functions or geographies for targeting of cost reduction initiatives, and rich reports and analytics to create cost reduction proposals and better communicate the financial performance of IT with key stakeholders.

As another example of cost reduction analysis, many companies are implementing server virtualization technology to consolidate the number of physical servers under management. Apptio can track the cost and utilization of all servers deployed, and allocate the appropriate portion of that cost to a service or application, thereby enabling an easily digestible view of which servers are targets for virtualization, which services would be affected and the total cost of those servers including associated network, storage, administration and facilities costs. To then calculate the ROI of a proposed virtualization project, Apptio can create a “What If” project model to show the new cost and utilization levels including virtual machine software and allocations to shared physical servers for an accurate analysis of the proposed cost savings and project ROI.

With Apptio, you can:

• Accurately model IT costs to better understand and provide a consistent model for per-Service costs, per-Line of Business costs, per-data center costs or any level of unit cost analysis
• Maximize savings in cost reduction projects by identifying the optimal areas for cost reduction and accurately assessing the potential savings and project impact.
• Justify cost reduction projects with custom ROI reports based on actual cost data
• Significantly save in person-hours per quarter by automating regular cost model updates and IT financial reporting
• Optimize IT operational efficiency by addressing high-cost, low-value services or functions and monitoring the cost and performance of IT at a service or line of business level

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.