Optimizing IT Operations: Improving Cost Effectiveness and Service

Executive Summary

A Fortune 50 company engaged Everest Group to assist in optimizing its IT operations function. The primary objectives included cost reduction, clearer performance accountability, stronger internal customer focus and faster infrastructure modernization efforts. To enable the client to attain these objectives, Everest Group first conducted a rigorous study of the IT operations environment to identify discrete initiatives with high potential to contribute. Once identified, the Everest Group team developed an integrated plan to guide the client through a coordinated implementation of the initiatives to produce the desired outcomes.

The Client’s Challenge

The client had experienced strong revenue growth and high overall margins for an extended period. During that dynamic time, the primary objective of the IT function was tactical support of the business. As a result, there was minimal focus on the strategic aspects of infrastructure operations, such as process and technology standardization, technology planning/road maps, centralized budgeting, etc. Additionally, the high-margin, vibrant nature of the business environment led to the creation of many shadow IT organizations throughout the enterprise.

But as the client’s core business matured, its revenue growth slowed and margins declined. Realizing the need to reduce costs, institute greater performance accountability, enhance focus on internal customer needs and update its infrastructure, the client retained Everest Group to help identify opportunities for IT infrastructure operations optimization. 

Insight to Action

Everest Group began by clarifying with senior client executives the business drivers and critical constraints within which the organization had to operate. Armed with a comprehensive fact-base, the Everest Group team then worked with IT business leaders and users of the IT group’s services to refine the optimization objectives and build consensus on priorities.

Next, Everest Group worked with key IT infrastructure functional leads to identify unique operational aspects of their functions, and identify factors preventing them from aligning their functions to achieve the stated objectives. Everest Group also worked closely with internal IT customers to identify better ways by which to align IT to support the strategic needs of the changing business.

Impact

These interactions enabled Everest Group to identify broad optimization opportunities across all aspects of the client’s infrastructure operations. To capture these opportunities, Everest designed 13 discrete initiatives and conducted detailed cost/benefit assessments for each. Everest Group synthesized these initiatives into an overall program, bundling and sequencing individual projects and detailing resource requirements, timing and critical success factors. This formed the basis for an overall IT optimization road map for implementation during a 24-month period.