While IT cost transparency has been the quest for many CIOs, one is tempted to say that so far, it has been elusive to many. So how do we define the term ‘IT cost transparency’ when used in the context of enterprise IT and its operations? IT cost transparency is defined as the knowledge of how business usage impacts the costs that are associated to IT. To be more precise, this is the knowledge of what particular IT business practices are using what amount of resources.

Now more than ever CIOs need complete business alignment together with IT cost transparency as IT is currently undergoing so much transition; transition of IT into cloud, analytics and labor automation among other changes. This critical phase calls for a change in the way decisions are made so as to uncover the underlying opportunities that could be introduced by transparencies in IT cost and total business alignment.

Well, there are businesses which are already investing in ensuring there is transparency in IT costs as they realign their business. An example is automating the hard work needed to collect, normalize and report on very detailed data; this leads to cost transparency. CIOs and organizations need not waste endless days looking at multiple spread sheets so as to understand the full cost of services and products. With analytics and automated data collection capabilities, organization have more time to spend understanding the information already processed and presented in very easy to understand way.

Most traditional practices in measurements are being completely transformed by virtue of automation. There is a transition from being on-point and static to being continuous. For instance, businesses can now use bench mark analysis to leverage real-time data from service delivery and pricing trends that could be used for scenario modeling and continuous planning.

The benefits of IT cost transparencies are many. With more maturity in IT cost transparency, businesses could make use of ‘what if’ analysis. They could also delve into such areas as consumption management, rationalizing portfolios, comparing the revenues and investments using applications and consolidation of servers; areas which optimize business operations. With the above, there is bound to be more common understanding between IT and the rest of business. It is this understanding that is critical if IT will achieve an understanding of cost drivers towards developing techniques for consumption management and cutting edge demand.

How are you managing the IT costs in your organization? Contact the RAY ALLEN team today if you are looking for an experienced team to analyze and optimize your IT Assets and Services.