Understanding the costs and benefits of IT is essential. Rational investment and strategic decisions are impossible without this knowledge; the organisation is working in the dark.
There are two contexts in which the knowledge can be used. First, organisations need to understand what IT contributes to the cost of delivering the products their business produces. Having an accurate picture of the cost and a breakdown into its constituent component enables comparison with peers and examples of best practice. It provides the basis for comparison with IT averages such as the key metrics published annually by Gartner. And understanding the cost distribution allows management to focus on the biggest cost contributions for potential savings and not waste time on small items.
The second context is where an organisation is considering a major change in the strategic direction of IT. A typical example is moving from one system type to another, for instance moving applications to a different operating system or replacing custom applications with a package. Understanding the cost not only requires knowing the Total Cost of Ownership (TCO) of the current environment and the expected TCO of the new one. The cost of the move and the impact on the business are critical, and often underestimated, factors.
Unisys has developed analytical tools and services for:
- analysing the TCO of ClearPath® and other systems; and
- comparing the financial implications of one IT strategy with another.