|Research, training, consultancy and software to reduce IT costs|
Cost reduction options
IT cost reduction methods fall into ten categories. Some have much more potential than others.
I have spent the past few years exploring IT cost reduction. Looking back, I see that I have fallen into the trap of presenting my views as "the solution", and not giving a fair account of other approaches.
To address this, I have been looking more broadly at IT cost reduction methods. Most methods fall into one of ten categories.
Five of the categories are supply side cost reduction, which reduce the cost of meeting IT demand.
Five of the categories are demand side cost reduction, which reduce the demand for IT.
All these methods have some potential. To understand which are most valuable you need to consider:
The "easy" methods are negotiation, business alignment, value focus and some kinds of outsourcing. These can be implemented without a major impact.
The most valuable methods are process improvement and size and complexity reduction. These impact IT broadly, have a high level of saving, and have benefits of improved control and agility. They are also the hardest methods, with the greatest impact on IT.
Most organisations have already achieved many of the benefits of process improvement. They have effective project management processes and service delivery processes. Further improvements have diminishing returns.
For most organisations, the biggest opportunity is size and complexity reduction. My main interest is in methods that make this easier, such as system quality management. This is not the only solution to cost reduction, of course. But it is the one, in my opinion, with the most potential.Next: If project management never existed
Minimal IT: research, training, consultancy and software to reduce IT costs.