Gartner Research

Cut Costs by Exploiting the Commoditization of IT

Published: 11 July 2008

ID: G00155603

Analyst(s): Brian Gammage

Summary

Identifying where and how to embrace commoditization in IT products and services can reduce overall IT spending by 15%. Gartner has developed a simple model to help enterprises do this.

Table Of Contents
  • Overview
  • The Commoditization of IT Leads to Overspending
    • Customized IT Remains Critical
    • More Commoditized Should Mean Lower Cost
    • The Trend Toward Greater Commoditization
    • Overspecification and Overspending
  • Identifying the Overspend
    • The IT Commoditization Curve
    • Commoditization and Market Maturity
    • The Cumulative Potential for Savings
    • Switching Costs vs. Potential Savings
  • A Model for Measuring Commoditization
    • The Constituent Parts of Commoditization
    • Building a Commoditization Score
    • Evaluating the Level of Standardization
    • Measuring the Level of Supplier Choice
    • Codifying Ease of Access to Appropriate Skills
  • Identifying Potential Cost Savings
    • Using the Model
    • Examples of the Model in Use
  • The Challenges of Leveraging Commoditization to Cut Costs
    • The Importance of Vendor Influence
    • Lack of Time and/or Resources
    • Lack of Maturity in IT Procurement
    • The Cost of Applying the Model
    • Greater Commoditization Is Not Always Desirable
    • Project Level: Different Measures Required
  • What You Need to Know

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