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How the UK’s leading organisations are cutting IT costs

How low should you go?

IT cost reduction

It is no surprise that cost reduction is at the top of most organisations’ agendas. IT represents a significant percentage of overall expenditure, so effective management of IT costs is a priority. Our new research report, ' How the UK’s leading organisations are cutting IT costs', explores different organisations’ attitudes and approaches to IT cost reduction.  

This is based on a survey of 60 major IT users in the private and public sectors, investigating how enterprises and public sector bodies are managing IT costs in today’s unprecedented economic climate.

Some of the findings were surprising:

  • Most IT cost reduction campaigns lack ambition, aiming to achieve savings of 10% or less; this is far short of the 30% of savings that we believe organisations can realise
  • Many IT cost reduction programmes are impacting business operations, delaying projects and creating reliance on out of date IT infrastructure
  • Nearly three quarters of organisations are asking their suppliers to reduce their prices, but in many cases suppliers are asked to deliver greater savings than the organisation will achieve in-house. 
  • Over two-thirds of organisations are cutting permanent IT headcount, potentially storing up problems for the future when business demand returns and scarce specialist resources become hard to find.
  • Over half of respondents plan further outsourcing of IT infrastructure, network and application management services  
  • Most IT cost reduction programmes are reactive, with IT leadership rarely involved in setting cost reduction targets and seemingly passing the buck to their suppliers

At Deloitte, we believe that organisations should take a proactive approach to IT cost reduction, implementing a strategic programme that will deliver sustainable savings without compromising IT's future ability to serve its business users.

For more information download our report ‘ How the UK’s leading organisations are cutting IT costs’. (PDF, 296KB)

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