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Why IT Cost Transparency Is Not Just for Information Technologists

IT cost transparency is one element of IT cost optimization. It helps provide insight into the existing IT cost baseline

IT cost transparency helps ensure innovation and support for business growth are not compromised by continual downward pressure on IT budgets. This is not just an IT concern alone-given the importance of IT Finance, procurement, and the CMO's office, ensuring IT costs are transparent is a concern for everyone involved with IT.

IT cost transparency enables Line-of-Business (LOB) management to participate in efforts to reduce IT costs by optimizing configurations, thereby freeing resources for innovation and M&A support. However, to paraphrase Gartner, "Transparency cannot be defined until IT and the organization agree on what IT provides the organization and what the organization needs from IT."

Making IT costs transparent means understanding not just what the organization needs from IT, but also understanding the current IT cost baseline. When IT cost transparency has a positive effect on the organization, the signs are clear: there's better demand management, an improved ability to run IT like a business, and improved IT forecasting accuracy. With greater IT cost transparency, Finance and LOB management can shift the discussion from "lights-on" IT spending to funding more innovation.

Key Facets of IT Cost Transparency
IT Asset Baseline:
the number of IT assets that are chargeable, their configuration, and how they are used. For maximum transparency this information must encompass workstations, mobile devices, servers, networking, storage, and software. The baseline must also reflect the interplay between these elements in order to support the next facet: business system correlation.

Business System Correlation: being able to express facts in ways the recipient can understand and use. For example, if LOB executives fully understand their business systems and the value they provide, IT costs must be defined in similar "systems" terms, which might require grouping costs for the various technical components that comprise a system.

Configuration Intelligence: making the relationship between configuration and the deployment of software equally transparent. For example, the movement of a database onto a server that is part of a cluster may well increase costs by an order of magnitude. Understanding the interplay of licensing, virtualization, and clustering is essential if "lights on" IT costs are to be driven down.

Usage Intelligence for Decommissioning: the final piece of the IT cost transparency puzzle. It is not uncommon for organizations to have numerous servers, holding expensive licenses, supporting non-existent workloads. Being able to identify by whom and how each of the components of business systems are used is an essential aspect of IT cost transparency. Without highly accurate usage intelligence, it is almost impossible to support decisions about decommissioning unnecessary hardware and software.

Providing reporting on the items above needn't be a burden on IT asset management; it can be made almost effortless with new approaches to IT cost transparency.

In my role as Marketing Director at Scalable Software, I try to share information that is useful for IT management and those in IT Finance. I would be remiss if I didn't mention that Asset Vision® provides robust,reliable reporting on IT assets-including dashboard views-that make it easier to get a more transparent view of IT costs. While Asset Vision is a Scalable product and while I do work for Scalable, that doesn't mean it's not worth evaluation. To assess Asset Vision, learn more here.

More Stories By Lori Witzel

Lori Witzel has provided marketing leadership for software and technology services organizations. Her new approaches to strategy and execution, with a focus on demand generation and operational excellence across all marketing disciplines has created positive response, results and success.

By applying lessons learned from the business analysis and software engineering communities, marketing operational excellence can be transformed, yielding a faster Return on Marketing Investment (ROMI).

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