How adopting an ITIL framework can lead to cost savings for business

An ITIL framework isn't easy, but it can drive huge cost savings. Learn how ITIL cost reduction strategies translate back to your business.

Most CIOs agree that in an ideal world, adopting an ITIL framework is a good thing. But getting an organization in the frame of mind -- both psychologically and monetarily -- to fully adopt an ITIL framework and rework policies and procedures can be a tough sell to upper management. In tight times, justifying the expense of ITIL adoption can be an uphill battle. How does a CIO extract some cost savings for the business from its ITIL framework?

Jonathan Hassell

The ITIL framework is simply a recipe that cooks up some tasty cost savings for the business that will satisfy that hungry bottom line. Here's just a sample of the cash benefits you can look forward to by facilitating an ITIL framework:

Finding money. You know how you always find a spare $20 in an old jacket pocket? Think of your vendor service-level agreements (SLAs): How do you know that all are being met? Through availability management techniques, CIOs and their staff members can find clauses in agreements where vendors must pay you for services you’re subscribing to but not receiving. There are many instances in which services covered under an SLA are being provided at less than their rated capacity -- Internet access that never reaches a guaranteed speed, or vendors with on-site support agreements that don’t meet their time windows. Spotting and then closing the loop on these instances can result in a direct monetary refund right back into your company’s bank accounts, which contribute directly to the bottom line. ITIL techniques make such a review easier, both initially and on an ongoing basis.

Right-sizing services. Through ITIL service-level management techniques, you get a clear picture of precisely which services are appropriate for your company’s needs and which aren’t providing the best bang for the buck. Sometimes less-expensive solutions are viable, and sometimes multiple services can be combined into one single solution to reduce costs while maintaining or enhancing service.

Consolidation and vendor management. Through these thorough reviews of your service providers, you will likely find a few vendors that perform well and offer a variety of services. By consolidating services under one provider, you can negotiate for volume discounts, better services, more flexible payment terms, increased SLA commitments and more -- ultimately translating to cost savings for the business.

Network link cost reduction. You might have network links that are vastly overspecified, or many network links that are underspecified. Not only can you save money by cutting back on unused service, but you also have a clear picture of networks that are oversaturated with data and, thus, prone to frequent downtime.

Cost avoidance savings. Once you have a complete inventory of all of your technology assets, their configurations, typical user base and intended purpose and use profile, you can determine the types of assets that need or could use maintenance contracts -- and perhaps most importantly, which assets don’t need one at all. While cost avoidance is a bit harder to sell in the list of ITIL cost reduction strategies, your CFO could say that avoiding expenses is even better than saving money.

Redeploying existing assets to serve new needs. By having a comprehensive picture of your IT assets, you’ll surely come across big computers with little to do, or an underused giant router in one office that could be switched out with an overtaxed tiny router in another office. Companies can have huge cost savings to the business, to the tune of saving hundreds of thousands of dollars on new equipment simply by making sure their existing hardware and software is properly distributed and utilized. The ITIL framework and ITIL best practices facilitate both this initial look and ongoing reviews of deployment strategies.

Jonathan Hassell is president of The Sun Valley Group Inc. He's an author, consultant and speaker in Charlotte, N.C. Hassell's books include RADIUS, Learning Windows Server 2003, Hardening Windows and, most recently, Windows Vista: Beyond the Manual. Contact him at [email protected].

Dig Deeper on CIO strategy

Cloud Computing
Mobile Computing
Data Center
and ESG