IT Cost Efficiency Toolkit for quick potential identification

The following blog post gives an explanatory example of the implementation of our Capgemini IT Cost Efficiency Toolkit in the context of IT costs.

General obstacles at restructuring programs: Missing toolkits and long-lasting ramp-up phases

Restructuring demand is often driven by external factors, such as shrinking margins due to general economic conditions or greater competition. Restructuring programs are usually conducted with two major purposes: Reduce cost and/or increase revenues.

Figure 1: Common Restructuring approaches

The revenue-optimization side can be linked precisely to products. The cost side, especially general spending such as IT spending, is often not controlled on a product basis and is therefore not transparent in terms of the value added for the company.

In traditional efficiency approaches, the major task is to derive and analyze, from a financial perspective, the cost-and-effect chain of various types of IT spending, in order to identify the right levers. This results in longstanding IT efficiency programs with low financial benefits reported in the books. Furthermore, the setup of these programs is costly – we experienced strong demand for toolkits to identify and track the measures in their potential during the program lifecycle as well as the program effect itself. The ramp-up phase is usually conducted using Microsoft Excel as the basic tracking instrument. After 12 months, a software selection process that blocks capacity within the restructuring team and causes additional costs starts.

Let’s take a new path:

The Capgemini IT Cost Efficiency Toolkit for measure identification, tracking, and effect-reporting

To tackle these challenges, we’ve created the Capgemini IT Cost Efficiency Framework, together with a toolkit for tracking and effect-reporting on the program status. Our Capgemini IT Cost Efficiency Toolkit consists of three parts:

1. The IT Cost Efficiency Framework: quick measure identification based on best-practice levers

Restructuring and efficiency programs are conducted best when there is clear guidance and structure.  Therefore, we’ve created a framework consisting of six focus areas within the IT:
Application: Enterprise architecture, domain architecture, as well as the current application landscape
Infrastructure: Covers infrastructure topics from physical to virtual provisioning, from a technology and implementation perspective
Staff: All staff-related and organizational topics, including organizational layers, in-/external task split, span of control
Partner: Full partner management, contract management of external partners, delivery models, and license management
Facilities: Focus on IT facilities such as physical data centers or IT office environments
Operating model: Includes capability management, process management, and working methods (e.g., agile).

Figure 2: Cost Dimensions within the Framework

We’ve divided the framework into five spheres of action and matched a total over 200 levers and over 400 best-practice measures among the framework and the spheres of action. For each crossing point of the spheres of action (i.e., value optimization) with the framework (i.e., infrastructure) we can provide various best-of class measures and levers.

Figure 3: Dimensions and Optimizers of the Toolkit

With this tool, we are able to match existing or already-conducted measures from previous cost initiatives with our database and identify efficiency opportunities in the form of current white spots within our IT Cost Efficiency Framework. The initial analysis and lever identification phase of cost efficiency programs is sped up through the framework and the best-practice and lever-matching tool from our toolkit

2. Tracking of measures and program progress

Once a new measure for implementation is identified from existing levers or ‘best-of class’ measures out of previous projects, a new measure is created with its estimated savings potential and sustainability estimation. The measures can be accumulated in the database to generate a quick overview of the identified savings potential. Furthermore, a comparison with the total or annualized savings target can be conducted. The status of each measures can be updated independently, using a multi-user interface and an implemented rights management. Simple reports for the technical project management team can be generated from the dataset.

3. Management Dashboard in Microsoft PowerBI

We’ve experienced in several cost cutting programs at our clients a separation of data gathering and data displaying tools. It’s mainly a split of tools: In Data gathering and consolidation we’ve experienced mainly  Microsoft Excel. Manually generated reports are then exported from Excel into Microsoft PowerPoint, QlikView or Microsoft PowerBI. The main shortage experienced is the data consistency between the report dates, as the data source is often a consolidated Excel sheet with various sources and no automatic versioning.

To tackle these challenges, we’ve built a web-based dashboard on top of our database to display real-time data and graphs. Currently, we are using Microsoft PowerBI for the dashboard, but this can be replaced with any other BI or dashboard solution according to our customers’ needs. Our current dashboard can be fully customized according to our clients’ needs, with individual logos, corporate identity, or individualized graphs and heatmaps.

Figure 4: Schematic Illustration of the Dashboard

Conclusion:

Our Capgemini IT Cost Efficiency Toolkit including the Capgemini IT Cost Efficiency Framework can be established quickly at the client site to speed up and boost efficiency programs.

We support our client in:

• Quickly identifying cost levers and cost measures with our 200+ best-practice levers framework
• Tracking the effects on current measures and the program status
• Generating board reports and display them live in a PowerBI frontend.

For more information on our toolkit contact:

Lars Stommer
Patrick Bieg