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Organizations have made huge investments in IT infrastructure and are continuously spending on maintenance, upgrades and related administration and management. Lean IT Transformation is an approach for creating new cost-effective, agile and flexible IT service models by switching from company-owned IT hardware, software and services to per-use based models. It leverages the latest trends in cloud computing technology and next-generation SaaS business models. This approach will help organizations to significantly reduce total cost of ownership, help achieve desired business agility and guarantee quality-of-service through new IT service models. We will illustrate the cost-benefit analysis of lean IT transformation approach in Enterprise Collaboration scenario.



Overview

The traditional IT has multiple fixed and variable cost components involved. Organizations have invested a large fixed amount for initial infrastructure setup and continue to spend variably for management, monitoring, support for these IT systems to sustain day-to-day business operations.

Figure 1: Traditional IT Cost Dimensions

We all have experienced that despite heavy investments by organizations in IT, there is always a huge gap between what businesses expects from IT and what IT can deliver-back to the business. The issue becomes severe when it comes to reducing the time-to-market new products & services or facilitating quick changes in critical business functions related to partners, suppliers or customers.

On the other hand, IT has justified limitations in terms of complexity and heterogeneity of existing IT environment, inflexible legacy though business critical IT systems, software, hardware & vendor lock-in and so on.

The following summarizes the key business expectations, key challenges faced by IT and how the business gets impacted in terms of growth, operations efficiency, customer satisfaction and competitive edge:

Lean IT Transformation

Lean IT Transformation is an attempt to resolve the above problem cost-effectively by creating new IT service models and switching from company-owned IT hardware, software and services to per-use based models. It focuses on reducing the IT infrastructure and related liabilities to reduce total cost of ownership. It focuses on changes in IT services and payment models to achieve desired business agility and flexibility without any software, hardware and vendor lock-in. It also focuses on achieving guaranteed quality-of-services from various service providers. All these themes are realized by leveraging latest trends in cloud computing technology and next generation SaaS IT service models.

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