November 12, 2007

Measuring The Cost Of IT Consolidation

Identifying The Elements That Contribute To Economic Analysis

by Andrew Reichman

with Simon Yates, Rachel Batiancila

Executive Summary (This is a document excerpt)

Consolidation can help to optimize cost structure for IT organizations with limited resources. Technology enablers like virtualization and remote computing eliminate requirements for dedicated physical assets for each application and for physical proximity of users to those resources. Although many potential initiatives can have a positive impact on operations, firms are unable to do everything at once. Instead, build business cases that prioritize and select the initiatives that offer the greatest impact with the least risk. Consistent application of cost analysis can enable firms to compare investments across a portfolio of options, communicate the risks and benefits to technologists and business decision-makers, and, ultimately, make good decisions. With the cost and impact of technology investments constantly growing, smart businesses will mandate economic justification for all major investments in order to more closely connect business goals with technology initiatives.

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