Cost Saving for IT Infrastructure Management

In a turbulent economic environment there is tremendous pressure on IT organizations to take a hard look at the cost of running IT operations. Infosys' Rama Murthy Prabhala and Rahul M. Joshi discuss long-term and near-term strategies that will help IT Managers and CIO's reduce the costs of enterprise application operations.

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We believe that by following this three step approach where each step builds on the other, CIOs can deliver the promised benefits to the enterprise. CIOs need to consider realistic benefits that can be achieved through the strategies.

Short Term — Cleanup

Defer discretionary spending - This is relatively easy to achieve, but care must be taken in identifying the projects that are to be shelved. While application upgrade projects are underway, CIOs should scrutinize the benefits of these projects and defer implementation of these upgrades if they are not critical for business. CIOs should review all projects and prioritize them depending on the cost-benefit outcomes. It is also recommended that future direction and growth be accounted for while doing the rationalization exercise.

Decommission little or never used applications - CIOs should consider rationalization of applications as a strategy for reducing costs of IT operations. Elimination of redundant applications is a must in cleaning up the application inventory and reducing support costs. Such a move is an extremely useful lever while dealing with organizations that have grown through M&A or that are organized based on lines of business.

Application portfolio based view of support costs - CIOs need to re-evaluate the cost of managing application portfolios and adjust the service levels based on the utility and criticality of these portfolios in consultation with business partners. One approach for achieving this is to build an inventory of applications, classify the applications maintenance and support needs based on core, sunset and new generation applications and then build appropriate support models with relevant service levels. This allows IT to reduce service levels of up to 30 to 40 percent of application portfolios leading up to 20 percent reduction in costs.

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