Enterprise IT Management Perspectives

Managing IT Costs: In Summary (Macro & Micro economic approaches to reducing CAPEX and OPEX)

Dominic Schiavello — Fri, 03 Apr 2009 00:19:00 GMT

For the last 10 blog posts, I've been discussing why and how to manage IT costs, and given the current global economic environment, it's no surprise that these posts have been drawing an increasing amount of traffic. So before we move on to the next topic, let me sum up what we've discussed. Why do we need to manage IT costs? Though it's obvious that reducing costs and...

Managing IT Costs: The Economics of IT, or How Costs Relate to Service Demand and Service Supply

Dominic Schiavello — Tue, 31 Mar 2009 17:01:00 GMT

Now that we've examined how to make macroeconomic and microeconomic improvements to your overall cost structure, let's investigate how your costs relate to the total supply and demand for each of your services. If you look at the total service demand for any individual service, you need to understand three types of demand for each of these services: Strategic demand: This is when the...

Managing IT Costs: What's your take?

Dominic Schiavello — Sun, 29 Mar 2009 18:18:00 GMT

Now that we've covered ways to manage your IT costs on both a macroeconomic and microeconomic level, let me stop and turn the tables to find out more from you, the readers. How do you currently manage your IT costs? Do you typically do everything in a broad brushstroke way at a macroeconomic level or do you have enough information to do make decisions at a microeconomic level to improve...

Managing IT Costs: Making Microeconomic improvements to your cost structure (Overhead Costs)

Dominic Schiavello — Wed, 25 Mar 2009 14:23:00 GMT

So now we've covered almost all the factors in the Total Service Costs equation we've been using to illustrate what we can do at a microeconomic and operational level to improve costs for specific services: Total Service Costs = Amortized Service Project...

Managing IT Costs: Making Microeconomic improvements to your cost structure (Project Costs)

Dominic Schiavello — Mon, 23 Mar 2009 14:36:00 GMT

The next step of our discussion on making microeconomic improvements to your cost structure is to take a look at another important factor in the Total Service Costs equation we've been examining (which I originally presented in this post): Total Service Costs = Amortized Service Project...

Managing IT Costs: Making Microeconomic improvements to your cost structure (CAPEX)

Dominic Schiavello — Wed, 18 Mar 2009 12:34:00 GMT

Let's continue our discussion of what we can do at a microeconomic and operational level to improve costs for specific services. We've already looked at reducing CAPEX at a macroeconomic level, but we can apply the same principles in a directed way to specific services, reducing CAPEX at a microeconomic level. And we can prioritize these cost-reduction efforts based on criteria that...

Managing IT Costs: Making Microeconomic improvements to your cost structure

Dominic Schiavello — Fri, 06 Mar 2009 18:29:00 GMT

Following up on my preceding discussions on macroeconomic ways to improve your cost structure from both a CAPEX and OPEX perspective, let's move on to things we can do at a microeconomic and operational level to improve costs for specific services. Having the ability to look at costs at a service level (through IT service-based costing) we're able to actually see how each service...

Managing IT Costs: Making Macroeconomic improvements to your cost structure by reducing OPEX

Dominic Schiavello — Tue, 27 Jan 2009 21:46:00 GMT

Previously, I covered ways to improve your cost situation at macroeconomic level across all services by reducing CAPEX. The next broad-brush thing we can do is to look at reducing OPEX. These expenses are typically in the form of labor, telecommunication costs and utility costs (like electricity).Automate, automate, automate One of the most obvious options for reducing operating expenses is to...

Managing IT Costs: Making Macroeconomic improvements to your cost structure by reducing CAPEX

Dominic Schiavello — Mon, 05 Jan 2009 17:36:00 GMT

So now that we've covered the benefits to getting a good handle on costs, and how IT-service-based costing can help you understand your total service costs, let's take a look at how to actually make improvements to your cost structure. In our discussion of aligning IT with the business, I introduced the concept of the Economics of IT, where issues affecting the whole business are...

Managing IT Costs: What makes up a IT service cost?

Dominic Schiavello — Mon, 29 Dec 2008 23:38:00 GMT

In my last post, I started the discussion of managing IT costs by defining why you need to get a good handle on costs (beyond the obvious reasons). It's important to understand the total service costs because understanding those costs can drive operational improvements. So let's start by looking at IT-service-based costing. What makes up a service cost? Let's revisit the equation...

The First Step to “Doing Things Right”—Managing IT Costs

Dominic Schiavello — Tue, 23 Dec 2008 17:38:00 GMT

Now that we’ve thoroughly covered the topic of aligning IT with the business, let’s move on to the next major imperative for Enterprise IT Management: Managing IT costs. Why do you need to get a good handle on costs?First, I want to establish why management of your cost structures is so important—apart from the obvious reasons in the current economic climate. A big chunk of IT thinking is always...

The bottom line about aligning IT with the business

Dominic Schiavello — Mon, 15 Dec 2008 15:31:00 GMT

Before moving on to a new topic, let me sum up what we’ve covered so far.In a fully decentralized IT organization, where there are individual IT departments for each line of business rather than a corporate IT department with a central CIO, you’ll find that IT projects are typically very aligned to business unit initiatives, but because purchasing decisions are decentralized, it’s difficult to...

Getting alignment and staying aligned - related but different problems

Dominic Schiavello — Tue, 09 Dec 2008 18:19:00 GMT

So far, we've discussed how fully decentralized, fully centralized and federal models of IT organizations affect alignment between the business and IT. Regardless of how you get to a state of alignment in the first place, though—whether by taking a portfolio approach or any other approach to strategic alignment—when you start investing in the delivery of new IT services, they each go through...

“An each way bet” – How a federal model affects alignment between the business and IT

Dominic Schiavello — Wed, 24 Sep 2008 16:17:00 GMT

In the preceding posts, I discussed how a fully decentralized model affects views on alignment and how fully centralized IT organizations affect alignment. Now let’s examine how a federal model affects alignment between the business and IT.In a federal model, there is a central organizing group (corporate IT) and the CIO for the whole company is in that organization. Then there are many CIOs...

"Keeping everyone happy" – How fully centralized IT organizations affect alignment

Dominic Schiavello — Thu, 04 Sep 2008 15:01:00 GMT

In my last post, I discussed how a fully decentralized model affects views on alignment, so now let's take a look at how a fully centralized model affects alignment. In a fully centralized organization, there is basically one central CIO with many direct lieutenants, and the whole IT organization is seen as a shared facility across all the lines of business. Requests come in from various...