Taking Control of IT Costs: A Business Managers Guide

Information Technology is one of the major costs for businesses in the 21st Century and yet it is allowed to operate without the usual cost controls imposed on other departments. The last few years have seen huge investment in IT with the lead-up to Y2K, the explosion of e-business and the increased dependence on IT business systems. But is it delivering the goods? It is hard for senior management without specialist IT knowledge to judge the value of IT spend. As we enter a period of economic slowdown, managers need to increase their efforts to manage costs. IT can no longer expect to be exempt. Senior managers will find this briefing an invaluable guide to imposing normal cost discipline on IT spend – within the IT department or elsewhere – without the need for technical knowledge of IT. IT managers will also find it useful in implementing their own cost management programmes. Contents include: The opportunity and rewards of managing IT costs Outline of a project to manage IT costs Guidelines on implementing tasks Cost allocations and their effect on real costs IT strategy review Outsourcing, ASPs and Internet in IT cost management  

Table of Contents:
Introduction 1 A problem for business management? Introduction Projects go over budget and over time New systems fail to meet user functionality expectations Reliability New systems work OK but destroy existing structures Summary 2 An IT expense healthcheck: three tests to check quickly how well your IT department is managing its costs Aim Introduction Healthcheck 1: key performance indicators (KPIs) Healthcheck 2: standardization/variety test Healthcheck 3: inspect the physical IT assets Summary 3 Cost allocations: what they are and why they matter Introduction What are cost allocations and why do they matter? How do cost allocations work? The major categories of IT cost and how they are allocated The four most common IT cost allocation principles How to reduce your IT cost allocations Summary 4 Starting to increase IT cost efficiency Introduction Focus Tactical/short-term IT cost-efficiency initiatives 5 Key performance indicators and benchmarking Key performance indicators (KPIs) Benchmarking Practical steps to implementing KPIs and benchmarking Implementing benchmarking A word of caution: Baldrige syndrome Conclusion: key points of KPIs and benchmarking 6 IT strategy Aim Introduction The four main elements of contemporary IT strategy Appendix A: Review of accounting: rationaIe, terms and tools Appendix B: A structure of typical principle IT costs

About the Author :
Sebastian Nokes has been a senior manager and management consultant in the IT and Financial Services industry for the past 15 years. In this time he has worked for IBM and Credit Suisse First Boston. He led major projects in a number of global companies and increased their IT efficiency by 30% while simultaneously reducing costs by 50%. Familiar with the Internet since 1989, he has used it to increase IT and management efficiency across a broad range of organizations. He recently headed a project with heavy Internet involvement, the results of which saved $23m and improved performance.

Review :
"In most businesses in which I have been involved throughout my auditing career there has been a certain mysticism attached to IT. Even in this modern age there are many managers who continue to regard a computer as a magic black box. Where they have learnt how to switch a pc on, there are not many who hand on heart understand the technology. Nor should they be expected to. And yet not many of these same managers would dream of entering into a major capital project without a full cashflow analysis or establishing a project management programme. The IT department in any business is a key part of the undertaking. But it can easily become a bottomless pit. Instead of adding value to the business it can fast become a runaway cost. "Taking Control of IT Costs "is an excellent model for the layman to get to grips with the pitfalls. " Colin Harris CA (SA), Director of Internal Audit & Business Continuity, St. John Ambulance, London