IT cost reduction
IT cost reduction
Clients may embark on IT cost reduction as part of an enterprise-wide cost reduction programme or simply to help manage IT costs.
The IT budget is typically between 15% and 30% of an enterprise’s cost base, and we target savings through a cost reduction programme that creates a sustainable low-cost IT model, while balancing the need to deliver value to the business. The IT Cost Reduction Proposition helps clients to identify and deliver sustainable cost savings, through a range of interventions, including:
- Sourcing activities, including outsourcing, offshoring, contract consolidation and renegotiation
- Process fitness, where we focus on ensuring IT processes are efficient and make effective use of automation
- Demand challenge, where we ensure that client demand for IT services is effectively managed so that the business understands the financial implications of new requirements or additional business volume
- New technology, such as the use of cloud or server virtualisation
- Business enhancements, which can include tax optimisation and vendor management capability enhancement
- Green IT, where we help to drive energy efficiency in areas such as data centres and desktop computing
It Cost Reduction Value to our clients
Deloitte has shown that a strategic approach to IT cost reduction can deliver savings of between 20% and 30%. More importantly, these savings can be sustainable and can be achieved without reducing IT’s ability to meet future business needs.
IT can play a significant role in contributing to the green agenda. By viewing the cost base from this perspective and reducing the right type of cost in the right way, IT cost reduction and corporate social responsibility can be mutually compatible.
Taking a strategic approach to IT cost reduction can achieve a number of benefits, including:
- Reducing IT costs, even when business demands are increasing
- Using IT to reduce cost elsewhere in the business, for example through the use of cloud and virtual desktops to facilitate staff mobility
- Realising immediate cash benefit, without compromising strategic objectives
- Taking advantage of any opportunities created by the economic downturn
- Minimising any risks associated with the fragile global economy and assessing the impact this may have on IT providers
- Underpinning an organisation’s sustainability and corporate social responsibility programme
Key enablers of IT cost reduction
Deloitte has an established IT Cost Reduction Method based on proven experience. It provides a repeatable, best-practice process framework for successful reduction of an organisation’s IT costs. The method covers the entire IT Cost Reduction lifecycle from the initial pre-programme assessment and initial planning down to delivery and tracking realised benefits.
This method is supported by a repository of tested tools, models, techniques and strategies that can be used to maximise savings and accelerate project timescales. This includes a hypothesis database, which is a continually updated repository of all of our IT cost reduction ideas.