Still Looking to Cut IT Costs? Start With Your App Spend

Economic disruption has forced most organizations to prioritize cost cutting initiatives while continuing to fund business-critical activities and drive growth. Having thoroughly scrutinized and re-planned fiscal budgets to cut, delay or renegotiate every possible line item for potential savings, many are now searching to further reduce spend and cut costs. What should you prioritize first? This is an important decision with serious downstream implications. With new reduction opportunities not as immediately obvious, organizations must tread carefully.

The good news is opportunities to cut costs still exist. Comprising between 30 – 35% of all IT spend, the application portfolio is a clear target. However, knowing where and when to cut application spend, relative to function, business impact, and return on investment is key. Cursory and imprecise approaches to application optimization can create more problems than they solve. Most leaders find themselves unable to answer basic questions about their application portfolio because they are:

  • Overwhelmed by the number of applications in the portfolio
  • Unable to easily produce measurable business results associated with the project
  • Unable to connect their applications to the business outcomes they support
IT Spend - Still Looking to Cut IT Costs? Start With Your App Spend - Apptio
Applications represent up to 35% of IT spend, offering a targeted IT cost-cutting opportunity that will allow business-critical initiatives and growth to continue.


Identifying application cost-reduction opportunities

Focusing on the addressable spend within specific application support domains can quickly reveal cost saving opportunities:

  • Internal & External labor
  • Vendors – MSPs (Managed Service Providers)
  • Vendors – Software Contracts
Image 2 - Still Looking to Cut IT Costs? Start With Your App Spend - Apptio
Application costs can be reduced by optimizing direct labor and vendor components that support applications.


Realize IT cost savings in less than nine weeks

Responding to these challenges, Apptio is introducing a turnkey Cost Transparency solution that targets specific use cases to accelerate cost optimization opportunities within your applications. This solution is designed to help organizations identify addressable spend within the direct labor and vendor costs that support applications. By shifting or cutting applications costs, organizations can achieve better cost-alignment to value and appropriately re-prioritize to fund business critical activities.

With Apptio, organizations begin seeing results in as little as 2 – 4 weeks.  This turnkey solution is designed to target specific outcomes, while implementation support services establish initiative-specific action plans to track business impact:

  • For internal and external labor outcomes – value is realized within the first 3 weeks
  • For vendor (MSPs) – value is realized within 6 weeks
  • For vendor (software contracts) – value is realized within 9 weeks

Apptio helps healthcare provider unlock $17M through app & service optimization

For Marshfield Clinic Health System (MCHS), a healthcare provider serving rural Wisconsin communities, swapping out its legacy spreadsheet- and email-based costing process for Apptio was a no brainer. Its manual costing process ran about nine months, providing only a partial picture of IT spend as well as its application portfolio. Like most spreadsheet-based, homegrown approaches, the process was prone to several issues:

  • Required too much effort to customize
  • Difficult for all stakeholders to use
  • Difficult to track continuous improvement
  • Resulted in slow decision making

Today, with Apptio in place, MCHS benefits from:

  • Achieved $17M in savings, through 30 different optimizations
  • Automated costing process now runs days instead of months
  • Improved business conversations about IT spend with real-time answers

“The TCO data we receive supports our mission to help children, the elderly, mothers, and fathers.”

– Sara Scheu, Director of IT Business Management, MCHS

Quickly cut addressable application spend with Apptio. We will run this solution on your behalf and set you up for success. Contact us today to get started.

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