IT cost reduction

With a wide-spread economic downturn well underway, top managers are prioritizing cost
reduction as never before—and they are looking for new solutions and proven practices. It's inevitable that cost-cutting efforts will land heavily on IT since it is a significant cost center and because it impacts costs in almost every business activity.

Two areas that historically (and often wrongly) have received the lion's share of cost cutting attention are discretionary spend and IT funds earmarked for business growth. It’s
not that these approaches to short term cost-cutting don’t help, of course. They can be (and often are) highly effective at the department and project level, where smart middle managers can do a fine job of prioritizing the right candidates for cuts from their points of view. But
in the case of discretionary spend, on average it only accounts for about a fifth of today’s overall IT budget. Too often, cuts made only in discretionary IT spending can have unintended consequences by affecting IT service quality, which in turn diminishes the value and demand for IT services and negatively impacts business growth.