8 (Eight!) Ways To Reduce Your ICT Management Costs, But Where Is the Low Hanging Fruit?

The Dutch ICT management magazine Computable has published an article on reduction of your IT cost (in Dutch). In this article, which is well received reading the comments, the author provides the reader with 8 (eight!) ways to lower his ICT costs. I will give a short overview: Title, description, advantages, and my estimation of the average implementation time. And add my view where you really can expect a difference.

On Information Management

1. Organize Your Information Management

Ships with more then one captain are doomed to loose their way. Organizing your information management makes sure that there is one process for business demand management, one process for information supply management, both processes have one owner, and trained personnel is available. Organized information management implies a clear architecture, Service Level Agreements (SLA's), supplier management and more.

Information management helps the business to perform their processes effective, and makes sure that the internal organization is very efficient.

My estimation of the implementation of a reasonably efficient information management function is 3 years.

On Project and Program Management

Use a Project Management Method

The usage of a project management method can help clarify goals, ways and means. Scoping is a very efficient approach to drastically increase the price / performance ratio of your projects. The same goes for structuring your project with parallel streams and phasing it by introducing mile stones. It also helps clarifying risks.

My estimation of the implementation of project management method: 2 years.

On System development

Develop and Implement a Reference Architecture

A reference architecture helps you set goals and rules you want to achieve. You can define guidelines for organization structure, best practices, and technology guidelines. A reference architecture enables the reuse of processes, IT applications and business functions. It shortens implementation times, lowers development and maintenance costs, and increases efficiency drastically.

My estimation of the implementation of a reference architecture is 20 years.

Minimizing Errors in the Exploitation Phase

Errors and error correction in the exploitation phase is expensive. The requirements management business case demonstrates this extensively. If your specifications cover the complete business process life cycle, process as well as content, then you will never get any nasty surprises.

My estimation of the implementation of a decent business requirements management process is 3 years.

Development and Implementation of a User Acceptance Test (UAT) (process and content)

A UAT can assure that the new or changed business process is suitable for the business operation and that its advantages and disadvantages are well understood, before it comes into production.

UAT content criteria must be SMART (Specific, Measurable, Attainable, Realistic, Timely), otherwise you still do not know if you have met your goals. The same goes for process criteria: What is the process audit frequency? What data quality is essential for this business process? What is an acceptable exploitation cost level?

The benefits of a UAT are simpler, more adequate processes, that can be adapted more easily.

My estimation of develop and implement UAT is 2 years.

Accept Maintainable Applications Only

The life cycle cost of an information system consists of a very large portion of operational costs. Only a small part is related to development cost. Maintenance and exploitation cost cover the rest.

Therefore it helps if you add maintenance an and exploitation criteria to the acceptance criteria for an information system. A business process must be adaptable: changes and new requirements must be implemented smoothly.

My estimation of the implementation of maintenance and exploitation acceptance criteria is 1 year.

On Computer Operations

A Standard Process For Change Requests and Release Management

Change requests can come up and be issued at any time. And if you do not manage it carefully, they will be implemented immediately. This leads to chaos. A change should be considered and managed carefully. Its impact should be related to importance of all other issues. The same goes for packaging changes into a new release or sub-release. A Change Request board is essential to take the right decisions, fitting into the long term strategy.

Change requests and release management help you getting a repeatable change process with less exceptions and less cost.

My estimation of the implementation time is 1 year.

Standardize Supplier Management and (re)Use Best Practices

Every supplier has its own procedures. If you do not standardize those, your supplier process will be difficult to manage and error prone. All the exceptions will be killing.

Simplify the process, use less suppliers, and use simple contracts. That will lower your costs.

My estimation of the implementation time is 1,5 years.

Low Hanging Fruit

Now let us consider all 8 possible cost reduction activities. The question is of course whether they are all equally important. 2 viewpoints are especially interesting: 1. Fastest implementation time, and 2. Highest Return On Investment.

Fastest Implementation Time

This is my list:

  1. Project Portfolio Management (PPM): Change requests and release management.
  2. Requirements for maintainable and operation sound process.
  3. Strategic sourcing and supplier management.

Highest Return On investment (ROI)

And this is my list:

  1. Strategic sourcing and supplier management.
  2. Requirements management, incl. the management of change requests and release management.
  3. Requirements for acceptance testing, incl. content, business process and exploitation management.

And how are you reducing your operational costs in the near future? And enhance the quality of your business processes as well? We would like to hear from you!


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