Before costs can be optimized, there has to be an efficient way to track each cost. The IT asset manager delivers efficient cost management by specializing in the critical competencies needed to optimize IT asset investments.
Many U.S. enterprises are outsourcing IT services to offshore locations, while others are exploring or expanding their use of domestic rural sourcing. This tutorial will help CIOs and sourcing managers to understand and address key issues when evaluating rural outsourcing.
In 2006, pharmacy company CVS Caremark signed a 10-year HR outsourcing contract with IBM. This case study serves as a three-year "check-in" to assess how both parties have successfully achieved their goals.
We review and analyze five key lessons learned in managing BPO deals from an important source: actual quotes of critical success factors paraphrased from frontline BPO sourcing managers.
Although companies may have many inventory options for their IT assets, they struggle to determine which one should become the standard for IT asset management purposes. Here, we analyze the various use cases of multiple inventory solutions.
In a panel discussion at the 2009 Gartner Outsourcing and IT Services Summit in London, the vice president of Gartner's Best Practices Council for Sourcing and Vendor Management Executives asked Rolls-Royce and SKF for their real-world advice to effectively renegotiate contracts.
Assignment records are often overlooked as an essential mechanism by which purchase records can be reconciled with inventory. The complexities of software licensing are best managed during the allocation of licenses for use.
Distributed photovoltaic electricity generation has come of age. Reliable solar technologies and power purchase agreement vendors enable U.S. enterprises to hedge their exposure to utility rates, buy renewable electricity, optimize costs and limit capital expenditures.
Organizations that ask astute questions in areas where SaaS vendors have not always delivered will better understand their risks and, in competitive situations, often be able to leverage the results to negotiate better contracts. We identify 12 key areas to push for some real answers.
ITAM market penetration is becoming mainstream, driven by a number of factors, including economic conditions, IT Infrastructure Library, virtualization, and software license management.
Gartner has been polling clients and conference attendees regarding software audits. In the past year, we have seen a significant increase in the numbers experiencing audits. We advise clients on how to reduce the risk of audits and minimize the pain if audits occur.
Although x86 servers are highly standardized products, purchasers typically don't see competitive discounts unless they invest in the negotiation process. Those that don't invest time negotiating can end up paying 5% to 15% more than necessary.
IT procurement managers reported the IT procurement practices they use to increase efficiency and add value. Use this research to understand the practices that IT procurement managers are applying, and the best practices that Gartner recommends across key areas of IT procurement.
Third-party maintainers are a viable alternative to OEMs for most, if not all, types of IT infrastructure. When selecting a TPM to consolidate contracts, organizations must consider 10 key factors.
Unlimited or unmetered software licensing agreements are often proposed by vendor salespeople as the best way to license software, especially on virtual servers. Understand the risks and rewards to determine when and on what terms unlimited enterprise agreements are the right thing to do.
Multisourcing is a discipline. We focus on taking lean concepts and principles, such as the seven deadly wastes and the kaizen 5S approach, to help organizations improve and further mature their multisourcing competencies and processes
IT providers often have an uncomfortably strong position in contract negotiations because of high switching costs and a lack of alternatives. This is where IT procurement is most valuable. We examine the negotiating skills and approaches needed most where there is no credible market competition.
Six hundred attendees from 46 countries attended the 2009 Gartner Outsourcing and IT Services Summit in London to improve business outcomes through sourcing. The event delivered the insight firms need to optimize costs quickly and obtain sustainable long-term business value.
Microsoft's policy on downgrades from OEM versions of Windows 7 to XP will help organizations without Windows client SA for a limited time, but it will confuse asset management and cost companies more to initially run Windows XP on new PCs bought after an unknown date.
Compellent, Isilon, NetApp and Pillar Data all offer guarantees to substantiate claims that their storage solutions reduce capacity requirements or increase utilization rates. The programs differ widely, but each is backed by remediation and is worth considering if the solutions meet your needs.
Affiliated Computer Services held its annual analyst and advisor event, focusing on how ACS plans to help clients during this economic downturn. ACS emphasized client relationships and its "Project Advantage" initiative through which the company is willing to invest cash and services to aid clients.
The appropriate use of incentives, specifically gainsharing, can be critical to the success of outsourcing contracts. This contract element is often ignored and/or misused by enterprises, which require a framework for the successful use of gainsharing in outsourcing deals.
Managing global sourcing deals is complex and requires significant upfront consideration to overcome all the unique challenges. We outline how executives and sourcing contract managers can mitigate the associated risks.
Arguably the most mature of technology-enabled processes, outsourcing payroll represents a prime opportunity to quickly cut costs. Other areas of quick cost reduction opportunity through business process outsourcing include accounts payable and customer data analytics.
CIOs and IT managers are often overwhelmed with multiple pressures, escalated issues and cost pressures due to the recession. When CIOs take a strategic approach to balancing outsourcing, innovation and cost, IT services can run smoothly and deliver business outcomes cost-effectively.
When internal infrastructure services and costs are poorly understood, misunderstandings often follow about products and services sourced externally. As organizations execute sourcing decisions, time and cost pressures increase the risk that business requirements will be compromised.
Even in good economic times, organizations seek to reduce costs through outsourcing and, at the same time, expect to receive best-in-class performance. This research helps organizations understand how nine complexity factors can impact the price of a data center outsourcing deal.
When organizations overcome challenges in eight areas of IT procurement, IT procurement can deliver cost savings and process efficiency. Gartner identifies these challenges and explains how procurement managers can tackle them.
Microsoft's licensing practices continue to challenge organizations as products and policies change frequently. This research collection will help organizations navigate the myriad Microsoft licensing issues.
The decision of whether to renew your Microsoft Enterprise Agreement should not be taken lightly. In these challenging economic times, it is even more essential to carefully weigh your available options and consider alternative licensing scenarios.
Enterprises that outsource IT services should consider including benchmarking clauses in many of their contracts. Benchmarking reduces the price of outsourcing deals and ensures that contracts remain cost-effective and efficient.
IT managers and users often involve IT procurement personnel only late in key purchasing decisions. When IT procurement employees develop key competencies to become trusted advisors, they can help IT users source quality products and services faster and more cost-effectively.
Organizations are realizing discounts of 5% to 15% on application services during the economic downturn. Understand the factors affecting application service pricing in 2009 to optimize these potential discounts.
There is growing interest in the potential cost savings from adding a second or complementary vendor for enterprise network infrastructures. Addressing operational considerations will ensure the successful integration of the second vendor, while reducing capex by 30% or more.
Even in good economic times, organizations seek to reduce costs through outsourcing, but often still expect to receive best-in-class performance. This research helps organizations understand how nine complexity factors can impact the price of an outsourcing deal.
Organizations are increasingly using price as the deciding factor in PC life cycle management product decisions. Use the trends in the market to negotiate prices down, but don't use pricing as the only product decision driver.
The only current market certainty is uncertainty, so clients must be very vigilant. IT service providers face multiple parallel threats and opportunities, and must act now to reduce their cost and increase their strategic investments.
Organizations looking to outsource IT infrastructure services must understand how much it costs to formally evaluate and transition to an external service provider. Enterprises that make the right investment upfront will reduce outsourcing deal risks.
When considering the use of a second server vendor, think about the types of machines involved, because the pros and cons vary widely. The approach that may work for x86 servers could backfire for proprietary or even reduced instruction set computer/Itanium Unix platforms.
Using two server suppliers fosters better pricing and service due to increased competition. However, the benefits must outweigh the added complexity and support burden that a second vendor brings. Use our guidelines to determine whether the dual-server-vendor approach works for your business.
Application virtualization can create higher than anticipated licensing costs. Customers need to understand how some software vendors earn more by not changing their licenses to accommodate new virtualization use cases, making it a matter for negotiation.
Enterprises are becoming more reliant on external vendors to provide goods and services necessary to run their businesses and maintain competitiveness. Reliance on vendors can be a risky proposition, especially with current economic challenges. Learn universal criteria to judge vendor risk.
Industrialized IT services provide enterprises with new options to reduce operating costs and capital expenditures through outsourcing. All enterprises should consider these options when they launch or manage an outsourcing initiative.
Small trade-offs in requirements or timing can cause PC hardware acquisition savings. If you add enough of them together, such savings can become significant.
Enterprises can postpone or even eliminate expenditure of $250,000 or more by federating existing search engines or by selecting tactical measures as alternatives.
Organizations face unexpected costs if they do not understand the areas of risk in an Oracle license agreement. Software license negotiators or procurement/sourcing staff need to negotiate contract terms and conditions, where possible, to save money throughout the deal and to align cost with value.
Some businesses are asking their IT organizations for utility pricing without thinking through the implications of how IT is funded. An IT utility requires a business plan, working capital and five major step changes for the internal IT organization.
Pay per use promises a new era of more-accurate value-based software pricing, and expectations are high. However, many obstacles persist to prevent software providers from delivering on that promise.
Users are questioning whether they should end their increasingly costly maintenance agreements, particularly for stable applications. Such a decision demands a proper evaluation. Six risk factors should be considered before making a decision to terminate business application maintenance.
Even in good economic times, organizations seek to reduce costs through outsourcing, but often still expect to receive best-in-class performance. This research helps organizations understand how nine complexity factors can impact the price of an outsourcing deal.
Following Nortel's January 2009 announcement that it had filed for creditor protection, some end-user organizations are keen to make contingency plans for support of their Nortel communications environments. This document shows them how.
Many organizations are using virtualization software, such as VMware, with their Oracle database management system and infrastructure licenses. Oracle has created policies for how it counts usage under virtualization, but these policies are not a formal part of the Oracle license agreement.
Enterprises have an increasingly greater selection of managed and hosted voice over Internet Protocol outsourced delivery options. Rather than purchase their own infrastructure, enterprises can opt for per-user, per month payment options, adhering to the communications as a service model.
Organizations that want to upgrade to Microsoft Office 2007 but do not have licenses or a firm business case should not buy the software or deploy it until Office 14 ships -- most likely in the first half of 2010. This will enable organizations to get two versions of Office for the price of one.
We explore some of the fundamental ways organizations can save on consulting and system integration services, along with their advantages and pitfalls.
In the current economic environment, higher risks are associated with purchasing products from venture-capital-funded vendors. Enterprises need to analyze and manage these risks.
IBM says its business in January 2009 remained strong, consistent with 4Q08 results. Unlike many other technology providers, IBM is not suffering significantly from the economic downturn, due to its business model.
A storage professional services engagement can help you reclaim wasted storage capacity and improve storage utilization in your existing infrastructure and help stave off new hardware acquisitions.
Recent client experiences have highlighted the need for invoice reconciliation. Mundane though it may be, auditing invoices is a very basic, yet often ignored, practice in an ongoing IT asset management program that yields significant savings.
Enterprises can save $100,000 or more on investments in data integration tools through effective vendor management approaches. Achieving these results requires a clear understanding of vendors' pricing models, knowledge of pricing trends in the market and effective use of negotiation techniques.
Gartner has seen salesforce.com deploy a number of new contract negotiating tactics. Many of these tactics will cost customers more money than is necessary, if not handled correctly.
Prices for outsourcing infrastructure services likely will be reduced between 5% and 20% through 2010. Reasons for these price reductions are the recession, which is affecting markets worldwide, IT budget constraints and cost-focused contract renegotiations, along with other emerging forces.
Enterprises often outsource to cut costs, but fail to assess how outsourcing will achieve these savings. Businesses need to analyze the sources of savings to achieve sustained long-term benefits.
An asset represents an investment. Software asset management is the discipline of managing investments in software licenses and their ongoing, potential cost liabilities. Many businesses can improve the way they manage software investments and associated costs by following this maturity model.
If you don't conduct a benchmark or baseline before signing a business process outsourcing deal, then contract and financial disputes with service providers may erupt as each side struggles to prove what the environment was originally like. Avoid challenges by conducting a pre-outsourcing benchmark.
Disruptive shifts in new demand and supply patterns, and the current uncertain and recessionary economic conditions will drive changes for how IT services are bought and from whom.
At our 2008 IT Financial, Procurement & Asset Management Summit, attendees raised questions on procurement outsourcing, how to move from tactical to strategic procurement, how to progress the procurement function maturity levels, and how procurement should perform in the current economic downturn.
The Satyam Computer Services scandal clearly calls into question Satyam's future and how it will impact the entire IT services industry. Here, we answer questions with regard to the "Satyam Effect."
During the 2008 IT Financial, Procurement and Asset Management Summit, attendees raised several questions on developing procurement competencies and skills, enhancing internal stakeholder engagement, achieving better cost savings, and applying a fair-value procurement methodology.
The appropriate use of incentives and penalties is critical to the success of outsourcing contracts. These contract elements are often misused by enterprises, which require a framework for the successful use of incentives and penalties in outsourcing deals.
Buyer interest is increasing in software-as-a-service solutions. In these deals, contractual terms are different from traditional on-premises software licenses. Buyers must understand hidden costs and the different types of protection required to negotiate sustainable deals with predictable costs.
With cost cutting currently paramount, the focus on discounts on application software deals is high. Although the discount is important, the commercial emphasis should be on ensuring that you purchase the right product with contract protections offering long-term flexibility and cost control.
When negotiating a software license agreement, the negotiator will often start with the vendor's agreement and attempt to negotiate changes in the agreement to make it more balanced. However, the highest risks often are the "missing" terms and conditions that need to be added to the agreement.
For a variety of reasons, IT organizations are under pressure to reduce the cost of IT and to use IT to reduce the operating costs of the enterprise. This report compiles a list of common IT-related budget-cutting ideas with links to specific research currently available from Gartner.
Obtaining maximum business value from IT spending will always be an ongoing client imperative. But with a potential business downturn ahead for many clients, the next most important business value action to take will be to cut IT costs.