Reducing IT Costs using IT Service Management

The most frequent question of the last few months has been "What are IT organizations doing to reduce costs in a downturned economy?"

With constrained human and financial resources, the answer to this question can be daunting. The business still expects the same level of service with fewer resources. What's an IT department to do?

IT Service Management best practices have always provided guidance for managing or lowering the cost of services without sacrificing quality. Frameworks, such as ITIL, advocate processes that net higher efficiencies and effectiveness, which in turn result in lower costs and higher quality. The better you are at doing something, the lower the cost of doing it. Here are some other ways ITSM can help reduce costs:

Understand your costs by calculating cost per service, cost per customer and cost per activity. You can't reduce costs if you do not understand what they are in the first place.
Create and analyze a Service Portfolio of services in the pipeline, in operation and in retirement. A Service Portfolio pinpoints how and where IT is investing it's human and financial resources.
Reduce reactive, unplanned work by improving the efficiency of incident handling and problem resolution
Build Process Models that document proven, repeatable procedures for the most common changes, incidents, requests and releases
Inventory and optimize existing tools before making new purchases. You may be able to turn on functionality to automate tasks
Use Problem Management to resolve the top recurring incidents. Incidents are very costly to both IT and the business. It is less costly to find a permanent solution than to repeatedly resolve the same or similar incidents.
Reduce supplier costs by retaining management control of the relationship - a lot of redundant work can result from misalignment between suppliers and customers.
Combine roles, particularly process roles, such as the Service Portfolio, Service Catalog and Service Level Managers.

The biggest and best advice is to start with baby steps - every dollar saved is a dollar earned, so look for quick wins first. For example, you may be able to leverage Demand Management to identify Patterns of Business Activity that allow you to offload some activities to times of lower system or network demand or lower the cost per service during off peak times.

For more information and detail, you can download the entire whitepaper Five Proven Strategies for Reducing Costs With ITSM

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