Centralized It Creates Effective Cost Management

Centralized IT Creates Need for More Effective Cost Management

by Ann All, IT Business Edge

Apr 1, 2010 5:21:29 PM

Ann All spoke with Yisrael Dancziger, president and CEO of Digital Fuel Technologies, a provider of IT cost visibility solutions including IT cost management and service level management (SLM) applications used by enterprises and commercial service providers. Customers include the BBC, BT, Capital One, Cisco, Computacenter, CSC, Cummins, Dell, Deutsche Bank, General Electric, Global Crossing, IBM, Nationwide, Nestle, Procter & Gamble, Siemens, SITA, Sprint, Steria, Telefonica, Telus, VW and Wipro. The company recently sponsored an independent study of IT cost visibility, and confirmed its results with a series of multi-city roundtable meetings with CIO-level executives during 2009's fourth quarter.

All: How do most IT organizations do cost management today?

Dancziger: Most IT organizations focus on high level only, Excel spreadsheet hell or don’t do at all.

“The recession-driven focus on cost reduction is tactical; the key driver of this market is because of virtualization, centralization of IT and cloud computing.”

Yisrael Dancziger

CEO, Digital Fuel Technologies

All: Yikes. These approaches obviously seem inadequate.

Dancziger: Yes, with no detailed visibility into P&Ls, there is no predictability. Also, with no detailed visibility, you can’t optimize cost benefit of IT on an ongoing basis and you can't be proactive about controlling costs. Not to mention, doing all of the necessary tasks manually costs an arm and a leg, and it is after the fact and error prone. It's becoming even more of an issue in a world of virtualization and cloud commuting, where you must perform usage-based IT cost allocation to comply with tax and regulations.

All: What are the key challenges in cost management for most IT organizations?

Dancziger: The key challenges in cost management for your typical IT organization include automation of...