IT Cost Levers

Caught this post on Apptio’s blog re: optimizing IT budgets. It summarizes a Gartner report — I’ve seen earlier versions — whichĀ is interesting and Apptio will provide the report if you provide them your contact info. The analysis:

…breaks down IT spending and identifies four best practices for strategic IT budget management. Of these, the recommendation to ā€œfollow the money,ā€ is of key importance to IT leaders. Knowing where the IT budget currently gets spent is the most important part of your budget strategy.

The post then highlights the top four areas of spend, which typically make up around two-thirds of an IT budget: Data Center, Application Development, Application Support, and End-User Computing.

One point: the separation of mobile topics into the categories of “End-User Computing”, “Data Networking”,Ā and “Voice Networking” is both useful and potentially confusing. It’s useful because it reminds us that just because we get billed for mobile in one package, we should decompose the costs like we would for other capabilities. It’s worth the time to break bundled costs down: you may need to differentiate service levelsĀ among your customers or find that mobile is providing capability that makes other options redundant (e.g., mobile hotspot vs. reimbursing WiFi/homeĀ cableĀ subscriptions).

It could be confusing because the costs aren’t as easily severable as other capabilities. In other words, trying to economize on a data plan may mean we lose credit on voice or device costs. In fact, the model itself is very PC-centric in that way: each of these cost drivers is typically provided in separate invoices or line items. Even worse, if you do try to account for it in a model, I’ve found my telecom staff can get deep into the weeds trying to model those last few mobile dollars.

SAP Business Suite 7.0 — life w/out upgrades?

I haven’t a chance to dig into the details of SAP Business Suite 7, but it looks very promising w/r/t implementation costs and other TCO drivers. The enhancement package approach was a great start, but the new Business Suite should be a more comprehensive breaking of “the upgrade barrier” (per Ed Toben of Colgate-Palmolive).

Here are a couple of videos on the new suite: Jim Hagemann Snabe on the strategy (here) and a SAP Business Suite 7 demo (here).

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