Cost Optimization Framework

There is an absolute need to revisit the IT Cost Optimization parameters at specific duration and frequency. Developing a structured approach helps organizations to solidify the fundamentals of IT operations and also optimize the operational cost. Strategic cost optimization programmers are important and help organizations achieve long term gains. This also gives opportunities to re-evaluate the complete IT operational efficiency and eliminate redundancies.

Pains are evident in all every IT operations. Cost of running IT enable operation is increasing day by day in every size of business operations. It is extremely important to develop an internal framework to have check and to optimize the IT enabled enterprise operations. Strategic cost optimization programmers are important and help organizations achieve long term gains. This also gives opportunities to re-evaluate the complete IT operational efficiency and eliminate redundancies. Various factors influence the decision which make it more complex and requires exclusive attention to evaluate and define the cost reducing parameters. The cost optimization process needs to be very systematic and the decision requires high level of commitment to enforce certain changes. The effort also needs to be revisited and redefined in specific duration. There is also a need to apply the defined cost optimization framework on regular interval to gain the maximum advantages.

Every enterprise needs to clearly define the “Basic” functional, organization need by which the enterprise operations can be supported. All the surrounding applications can be developed, energized on the Basic IT enabled services need. The second level of maturity comes when you develop the “Global Template” to standardize the certain functions and operations. Operational Innovation Framework can be utilized to optimize the related operational functions and key indicators can be further supported and enhanced to optimize the IT expenses. It is important to segregate the Dynamic nature of the operational support and related IT aspects.

Because of the operational risk it is extremely important to keep the priorities intact while making any fundamental changes in IT operations. A deliberate and well defined approach is required to enact any such changes to avoid any impact on business. The methods applied across the industry are mostly conventional and can easily be modified and adopted for any size of operations. Increasing fundamental capabilities are the key to success in optimizing IT cost reducing approach.

Overall the cost optimization efforts in IT operations require developing a clear approach imbibing organizational and internal cultural elements to gain the maximum advantage to operationalize any structural approach. This is required because structural cost optimization has organization wide impact and may require many fundamental shifts in key aspects. It is important to completely align the cost efficiency strategy to the organization long term goals. Fundamental shift may be required to enforce certain changes for a long term gain. Depending on the size and pace of operation, understanding the rules of engagement will be important to provide clarity on the level of required energy and time from all stake holders. A definite high level of commitment is required to enforce major changes. Few of the key parameters of IT Cost optimization can be summarized as below..

• Evaluation of shared Service Organizations
• Evaluation of IT Infrastructure
• Evaluation and re-defining the Systems
• Evaluation of software licensing
• Evaluation of required data services
• Embracing the new emerging technologies
• Evaluation of cost intensive operation
• Evaluate the procurement and sourcing capabilities.
• Identifying and strengthening the re-usability of operational capabilities.

Developing a cost optimization approach should not be one time effort. Given the dynamic nature of contemporary technologies and high pace of required acceptance within organization, it is extremely important to keep evolving the cost optimization approach and fine tune with the new advancements.