Organisations are continually under pressure to control the amount they spend on IT, but never more so than in the current downturn as organisations look to curtail investment programmes and reduce costs.  However IT cost reductions should always be approached with value in mind; if cutting IT costs destroys business value, for example through correspondingly lesser customer service, operational inefficiencies, then the reductions will be a false economy.

The challenge for most Chief Information Officers is how to reduce IT costs without adversely impacting the value that IT provides to its internal and external customers in order to preserve the organisation’s capacity to meet future demand.

The answer to this challenge requires an assessment of the entire catalogue of services that the IT function provides, to understand the cost of delivering each service as well as the value realised in doing so.  A systematic assessment of cost and value to obtain a baseline and identify short- and medium-term areas for improvement in line with business priorities and strategy.