Levers for reducing IT Department costs

4 juillet 2023 | ACTUALITÉS, Cigref in english, Communiqués, Publications du Cigref

To tackle the subject of cost reduction, it is necessary to rely on a common methodology and definitions. This common language means that we need to look at the different reasons for this reduction, and to consider a number of concepts such as cost avoidance, the value generated by IT for the business and the control of progress.

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The main aim of this deliverable is to study the cost reduction levers that can be activated by the IT Department, both in a crisis context, to respond to a constraint, and in ‘normal times’, with a view to optimising the company’s economic management. In particular, the deliverable presents a grid for analysing costs, considered from three angles: primary costs, function (BUILD/RUN) and accounting treatment (CAPEX/OPEX). These 3 approaches, which are sometimes adopted separately, can be combined to provide a more detailed and interesting analysis of costs, making them easier to understand for all the company’s stakeholders.

The specific context of each company, but also the more global factors that affect all organisations, make it possible to identify the cost drivers, and to propose the corresponding reduction levers. The study of levers lends itself particularly well to case studies. It is for this reason that testimonials from member companies that have implemented cost reduction plans are presented. It is interesting to note that the targets and means differ, but that they all reflect a common concern for Information Systems Departments.

The IT Department is almost always called upon when it comes to implementing an economic management plan and, because this involves it in a global perspective within the company, it requires particular care in terms of communication. Promoting the role of the IT Department, encouraging dialogue between IT and the various business units, setting an example and being transparent are all good practices that the IT Department strives to put in place.

Finally, this deliverable closes with a more reflective chapter dedicated to innovation, and the possibility (or impossibility) of reconciling it with cost reduction. The starting point is often that innovation is inherently costly, and therefore cannot be deployed without generating significant inflation in the company’s costs. This question, which represents an additional challenge for the IT Department, also invites it to open up the field of possibilities, and to see cost control as an opportunity.

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