If your business goal is increased profitability, then reducing TCO must be a high priority business case. It’s about ‘Optimizing’ cost, and doing ‘more’ with ‘less’. If your annual IT budget is USD 100 Million, a 5% TCO reduction can add USD 5 Million straight to your bottom line.
Two key parameters that influence your business growth are eliminating waste and re-deploying capital into the right opportunities; this thumb rule holds good for technology too.
Gartner says (IT Key Metrics Data) up to 60% of IT costs are dedicated to IT Infrastructure and Operations. The budgets are not going to increase much. IT Infrastructure leaders are under pressure to implement cost cutting initiatives faster. However, to identify waste and eliminate them, and make new investments across the technology stack is a challenge; add to it, the disruptive nature of technology due to growth of virtualization, cloud, big data, analytics and social media, the complexity only gets multiplied.
So, you need to analyze your current IT landscape, extrapolate it to the emerging trends, identify areas to optimize cost and inject capital, develop business case hypotheses, validate them with pilot projects, and subsequently roll-out implementation programs. This could range across the depth and breadth of your technology stack or the people and processes deployed in your IT organization.
Few common strategic choices available to optimize your cost are:
- Sourcing Strategy
- Asset Costs
- Remote Infrastructure
- Consolidation
- Tiered Infrastructure
- Green IT
By optimizing your IT Infrastructure you can reap several benefits such as:
- Shared resources, Faster responses, Easier administration
- Reduced operational cost and complexity
- Reduced energy consumption
- Safe disposal / recycling of IT assets
- And thus, increased profit !
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