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Minimal IT cost model

The Minimal IT cost model shows where to look for IT cost savings.

Open the cost model

The cost model is introduced in the following newsletters.

The drunken man
Where to find cost savings - for free

Using the model

The model asks 15 questions about your IT costs, how your costs are broken down, and factors that affect your IT costs.

The model explains each of the questions in detail.

Most of the questions are easy to follow. Three of them are a bit more subjective, and may be worth thinking about before you try the model.

  • Business scale is your estimate of the percentage of IT hardware, software and support costs that you can not easily cut back because you have no control over the underlying quantity used, such as the cost of a PC on every desk, or the cost of branch-based computing.
  • Average duplication is your estimate of how many times on average each business requirement is implemented. The sort of things that add to average duplication include:
    • Old systems that have not been decommissioned
    • Systems with overlapping functionality
    For example, if you are running old legacy systems in parallel with a replacement package, you might set this to 1.8 to show that most requirements, but not all, are implemented in both.
  • Average complexity is your estimate of how much more complicated on average your implementation are than they need be. The sort of things that add to average complexity include:
    • Layers of technology wrappers to translate to old or new standards
    • Unnecessary intermediate processes
    • Functionality within business systems that has no business function but is required to get around idiosyncrasies of the technology
    For example, if you use a lot of intermediate servers because of some now defunct file transfer method, you might set this to 1.3 to show that every system carries a lot of additional code that could be removed.

When you have entered your figures, click on Calculate. Your results will be shown in a table.

Open the cost model

Understanding the results

Here are some sample results

Current Notes Revised Saving % Saving
Services - hardware and software
Business scale 4,2000,000 c 3,570,000 630,000 15.0
IT scale 2,800,000 c,f 915,385 1,884,615 67.3
  7,000,000   4,485,385 2,514,615 35.9
Services - people
Business scale 1,200,000   1,200,000 0 0.0
IT scale 800,000 f 307,692 492,308 61.5
  2,000,000   1,507,692 492,308 24.6
Project costs
Analysis 1,600,000 a,d,m 979,200 620,800 38.8
New development 1,920,000 d,m 1,382,400 537,600 28.0
Modification 4,480,000 d,f,m 1,240,615 3,239,385 72.3
  8,000,000   3,602,215 4,397,785 55.0
 
Other 1,000,000   1,000,000 0 0.0
 
Total 18,000,000   10,595,292 7,404,708 41.1

The first column of figures shows the costs that you entered. They are broken down to estimate how the costs spread over different activities.

The notes show how revised figures are calculated. The cost model provides a key to the notes.

The last three columns show the reduced costs, the saving, and the saving as a percentage of current costs.

Survey

We would like to include your figures in our survey, to understand how businesses in different sectors and different countries can reduce their IT costs.

If you would like to take part in our survey, fill in the form below the results on the model, and click on Submit survey.

Confidentiality

The model runs entirely on your browser. The figures you enter and your results do not leave your PC. They are entirely confidential.

If you choose to take part in our survey, your figures and your results will be sent to us. We will keep your details confidential. See the survey form for more information.

Conditions

You may use the model for free.

Minimal IT Ltd. and its affiliates accept no liability for your use of the model. The model is intended as an analysis tool to help you understand potential areas for cost savings in your organisation. We do not guarantee that the savings shown can be achieved.

The model is copyright. You may not republish the model without permission from Minimal IT Ltd.

Minimal IT may withdraw or modify the model at any time.

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