IT Cost Optimization includes the practices, capabilities and behaviors taken by IT organizations and enterprises to balance the constraints of reducing costs, managing service levels and showing the business value of IT in pursuit of enterprise financial imperatives.

1. Key Initiative:
IT Cost Optimization
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2. Key Initiative Overview for IT Cost Optimization
DEFINITION
IT Cost Optimization includes the practices, capabilities and
behaviors taken by IT organizations and enterprises to balance
the constraints of reducing costs, managing service levels and
showing the business value of IT in pursuit of enterprise
financial imperatives.
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SCOPE
• IT procurement: Getting the
best pricing and terms for IT
contracts
• Cost savings within IT:
Identifying opportunities to
reduce IT costs
• Joint business and IT cost
savings: Implementing cost-saving
technologies in
conjunction with the business
• Enabling innovation and
business restructuring:
Implementing process
improvement, business
restructuring and innovation

3. How Gartner Delivers Value for IT Cost
Optimization
• Gartner helps clients reduce costs while maintaining service levels and
demonstrating the business value of IT.
• Gartner’s cost reduction recommendations can reduce an organization’s
infrastructure and operations costs by 10% or more in the first year, and by 25%
or more longer term (1). On average, Gartner clients save between 10% and
30% on their sourcing and procurement costs (2).
• A large multinational firm reduced its IBM Lotus Notes/Domino operating costs
by more than $11 million over two years (3).
• We have a number of analysts researching IT cost optimization and more than
500 savings-oriented research notes.
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4. Typical Hurdles Clients Face in Pursuing
IT Cost Optimization
Hurdles Organizations Typically Face Examples of Recent Research
How can I be sure I’m getting the best deals
on my sourcing contracts?
• Top 10 Extreme Negotiation Tactics for Problematic Vendors
• Understand Outsourcing Evaluation, Selection and Transition
Costs to Lower Risk
• Renegotiate Outsourcing Contracts Early to Cut Costs
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How can I save money with shared services
while still being responsive to varying
stakeholder needs?
• Centralizing IT: Assess Benefits and Barriers in Cost-Optimizing
Times
• Use Shared Services to Control Enterprise Content Management
Costs
• Implementing Finance Shared Services: Benefits and Best
Practices
How do I balance long-term imperatives with
pressing short-term demands?
• IT and Business Performance Goals for Cost Optimization (2)
• Use Benchmarking to Identify IT Cost Optimization Opportunities
• Five Principles Underpin IT Cost Optimization Success
• IT Cost Optimization Should Be an Ongoing Discipline
How can I save money on implementation
costs without increasing my implementation
risks?
• Toolkit: I&O Cost Optimization Tracking Tool
• Customization: The Cost That Keeps on Costing
• Toolkit: Prioritizing IT Cost Optimization Projects
How do I balance the need to reduce costs
with the need to position the business for
future growth?
• Spend IT Wisely with a Three-Layer Strategy for Cost Optimization
• Predicts: Taking a 360-Degree View of IT Optimization Will Deliver
Increased Value
• Improve IT Yield by Investing in the Right Things While Developing
the ‘Investment Gene’

5. How Gartner Helps Across the Entire IT Cost
Optimization Life Cycle
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 IT Cost Optimization Should Be an
Ongoing Discipline
 'New Normal' Business Demands New
Focus on Innovation, Cost, Risk
Management and Governance
 A Checklist for Cost Optimization (1)
 Decision Framework for Prioritizing
Cost Optimization Ideas
 Reducing Costs for Global Mobile
Voice and Data Roaming
 Five Critical Success Factors for
Advanced IT Asset Management
and Successful IT
 Critical Practices for Success in IT
Execute
Procurement: Build Teamwork With
Project, Program and Portfolio
Management
 Evaluate Opportunity Cost When
Deciding to Buy, Lease, Rent or
Subscribe
 Get an unbiased reference
from peer leaders who
have already undertaken
IT Cost Optimization
initiatives
 New Realities of IT Investment
 Chargeback Cost Recovery: Moment of
Truth
 Chargeback Methods That Will Change IT
Competitiveness and Effectiveness
 One Company Cuts Lotus Domino Costs by
$11 Million Over Two Years (3)
 IT Metrics: New Economic Rules of IT
Spending and Staffing Metrics
 Learn from peer leaders who want to
share their experiences in deploying
and operating new IT Cost
Optimization initiatives and systems
– Change Management
– Metrics
– Pitfalls to Avoid
 Gartner analysts can review
your strategy and planning
documents, and provide
valuable insights using
knowledge they have
gathered through interactions
with hundreds of clients
 Gartner analysts can help
you be successful in your
initiative by providing best
practices and case studies
that have worked for other
clients to help run and evolve
your Initiative
 Gartner analysts can help you deploy this
initiative, using models and frameworks
crafted through interactions with
hundreds of clients
 Advice from analysts will help you
implement and govern your initiative the
right way, to optimize business benefits
and avoid risks
Architect
Solution
Measure
and Improve
Develop
Governance
Strategize
and Plan
Drive Change
Management
Examples
of Written
Research
Analysts
Peers

6. Gartner has 65 Subject Matter Experts for IT Cost
Optimization
Representative analysts include 1:
Kurt Potter, VP Distinguished Analyst
27 years IT industry
Kurt Potter is a research vice president within the Gartner CIO Research group, where he creates actionable fact-based
research focused on IT financial management. This includes drivers and trends related to IT spending and staffing, IT cost
transparency, IT performance management, and IT benchmarking and measurement. Mr. Potter specializes in advice for
clients who have goals for significant change or big shifts in IT management practices.
Jim McGittigan, Research Director
18 years IT industry
Jim McGittigan is a research director within the Gartner CIO Research group, where he focuses on delivering value to Gartner
clients through his insight and experience in IT financial management. This includes cost transparency, budgeting,
chargeback, service pricing, cost optimization, benchmarking, project financial management, and performance metrics.
Sanil Solanki, Research Director
6 years IT industry
Sanil Solanki is a Research Director with Gartner Research. His focus is on IT cost optimization practices, business case
review for outsourcing, IT project finance, project benefits realization, IT chargebacks/showbacks and the business value of IT.
1 Indicates Gartner for IT Leaders Advisor Level of Service
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7. Gartner Consulting Provides Customized Support
Across the IT Cost Optimization Life Cycle
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Architect
Solution
Implement
Gain
Approval
Operate
and Evolve
Assess
Current State
Strategize
and Plan
Assess
Competencies
 Execute IT cost
optimization
plan
 Execute
communication
plan
 Track metrics
and measure
progress
 Develop budget
to support plan
 Implement
organizational
changes
 Manage IT cost
optimization
workstreams
 Monitor metrics
and measure
progress
 Conduct milestone
benefit realization
reviews and make
necessary
adjustments
 Review IT cost
optimization
strategy with key
stakeholders
 Develop a 6- to 18-
month cost
realization plan
 Develop
communication
plan
 Develop benefit
tracking metrics
 Design IT cost
optimization team
 Define current IT cost baseline
 Link key IT cost initiatives to business value
 Define IT cost optimization Principles
 Determine IT requirements to support IT cost
optimization initiatives
 Develop IT cost optimization Program Office
 Define the following tools for the IT cost optimization :
– Benefit tracking model
– Governance model
– Recover model
– Strategy and options
 Define funding strategies and management
 Clarify scope and
purpose of the IT
Cost Optimization
 Identify and
prioritize key
initiatives
 Develop IT cost
optimization
strategy
 Establish size of
the prize
 Develop IT cost
optimization road
map
 IT cost optimization plan that is aligned with business needs and objectives
 Current IT cost that has been accurately assessed and identification of size
of the prize
 Clear process for ensuring IT is optimizing the right cost (“cutting fat, not
muscle”)
 Benefits realization model
 Clear plan that outlines all workstreams
and activities necessary to realize IT
cost optimization
 Process to track benefits and impact
 Process and
metrics to
measure IT
contribution to the
business
Customized to your requirements + context of your industry + experienced practitioners + supported by data and metrics =
Customized Engagements that create Actionable and Credible Deliverables
How
Gartner
Consulting
Can Help
Benefits