Gartner Identifies Four Levels at Which IT Organisations Can Help Their Enterprises Optimise Business Costs

There are four discrete levels at which IT organisations can help their enterprises optimise business costs, according to Gartner, Inc. Gartner recommends that IT and business leaders use a cost optimisation framework as a template when evaluating cost optimisation initiatives.

Gartner's Four Levels of Cost Optimisation framework is based on the four discrete levels at which IT organizations can help their enterprises optimise business costs. The two lower levels — IT Procurement and Cost Savings Within IT — are focused on the reduction of cost within IT, while the two upper levels — Joint Business and IT Cost Savings, and Enabling Innovation and Business Restructuring — involve IT and the business teaming up to reduce operating costs.

"Whether it's due to an efficiency play, response to competitive action, meeting the needs of a powerful customer or dealing with an economic downturn, a sudden, renewed focus on IT costs can sometimes lead to ill-considered management responses," said Barbara Gomolski, managing vice president at Gartner. "However, experienced IT leaders know that cost-cutting campaigns seldom leave the organisation positioned well for IT-innovation-enabled and new-value-creation-based expansion."

Where appropriate, each level of this framework explores cost optimisation issues by technology, domain, technology role, supporting facts and quantifications, estimates of savings and risk, and, in some instances, vertical industry. The broad definitions of the four discrete levels are given below (listed from lowest to highest):

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