Gartner: Cutting IT costs by 25 per cent can be done in 10 steps

Analyst firms outlines its action plan for reducing IT expenditure

IT organisations that are under pressure to cut their infrastructure and operations costs can do so by as much as 25 per cent over three years if they take the following 10 steps, according to research firm Gartner.

• Managers should look to renegotiate contracts with telecom service providers (TSPs) to ensure the current rates reflect the market (as half of network expenses generally go to TSPs).
• They should also look to consolidate their infrastructure and operations; with consolidation being closely related to standardisation, integration and virtualisation.
• Managers should also look to virtualise their infrastructure and operations software and aim to reduce physical servers fourfold, in turn reducing hardware and energy costs.
• IT support – which typically makes up 8 per cent of total IT spend – can be scaled down by automating the more standard support calls.
• Managers should look to defer non-critical initiatives and focos on those that support moves in the business, lower the cost structure or reduce risk.
• Reduce power and cooling needs: Gartner says new design approaches can result in datacentres that use significantly less power, take up less space and cost much less.
• Contain storage growth: multiple approaches need to be adopted to managing data and therefore storage growth, including the use of storage virtualisation, automated tiering and storage resource management (SRM) tools.
• Streamline IT operations: this typically entails implementing IT operations framework ITIL. The principal goal is to improve service management and quality, but ITIL has been known to reduce operating expenses as well.
• Enhance IT asset management (ITAM): this will identify and assess cost reduction opportunities.
• Optimise multisourcing: IT leaders can make separate sourcing decisions for virtually any infrastructure and operations component, system or function and these decisions are of great importance to the business.

"Infrastructure and operations represents about 60 per cent of total IT spending worldwide, so with IT budgets remaining tight, it's no wonder that I&O cost-cutting pressure continues to be intense," said Gartner vice president Jay Pultz.

"When it comes to I&O cost reduction, there is no 'magic bullet', but best results can be achieved by implementing as fully as possible the 10 key cost reductions we have identified," said Pultz.