While value in IT can be seen in the context of new product launches or new data-centre launches, increased pressures on IT means it is important to emphasise value delivered in terms of cost reductions.
Cost avoidance is a debatable number and prone to many challenges – cost reductions is more reliable.
However, quantifying cost reduction is challenging if you only take a cost-centre view of your costbase as uplifts driven by inflation or new products/service launches can more than offset the reductions at the cost-centre level.
How you express cost reductions? They can be expressed on one of the 3 basis:
1. Cost Category – such as reductions in staff portion of the costbase or 3rd party vendors
2. Infrastructure Capabilities – such as reductions in data-centre or application costs
3. Service Portfolio – such as reduction in costs of existing applications
You can do this as part of your Annual budgeting exercise quite easily. If you need help, reach out and we’ll be happy to show you the way (for free).