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Architect Your IT Portfolio
Use technology architecture to reduce costs and avoid redundancy.
by Jeff Tash

December 6, 2004

If I could show you how to reduce your IT organization's technology portfolio costs by at least 10 percent, would you be interested? You can achieve these savings by following a simple pragmatic approach.

First, focus on your technology architecture (see "Harness Your Technology Architecture"). Technology architecture is a formal way of organizing, classifying, and categorizing your technology investments. Think of it as a taxonomy, roadmap, or blueprint. Generally, technology architecture is depicted using a three-layer model. The bottom layer corresponds to infrastructure, the middle layer to applications, and the top layer to data.

Once you've organized your technology portfolio into a set of meaningful classification hierarchies, the next step is to establish and communicate technology standards. Finally, you want to measure how well your technology portfolio complies with your governance standards.

By following the above process, the resulting combination of product consolidation and standardization will, in most cases, decrease your overall technology portfolio expenses by between 10 and 25 percent.

All too often an enterprise's IT investments reflect an uncoordinated collection of too many products, most of which were purchased over an extremely long period of time, by numerous people, from many different parts of the organization. Unfortunately, these assets often become liabilities when a business requires agility.

Who in your enterprise has the fiduciary responsibility to determine whether existing technology investments have been, and still are, cost effective? Who is measuring the total cost of ownership (TCO) for technology assets? How, and to whom, is TCO information reported?

Even though all large enterprises spend significant amounts of money on IT year after year, few business executives truly understand what their enterprise actually owns in terms of technology investments.

The most fundamental problem facing IT today is the same fundamental problem that has plagued IT since the dawn of the information age: IT leaders seem to have an innate inability to communicate with the business people they serve.