Service-Based Costing Models Rise to Top of IT's Priority List

MCLEAN, Virg.--(BUSINESS WIRE)--April 10, 2006--

59% of organizations want to measure IT costs by service, nearly half say their current inability to do so is a top barrier to optimizing IT costs

“Measuring and Optimizing the Cost of IT: A Progress Report”

Senior corporate executives and IT leaders want better methods for measuring IT costs based on service (i.e., online trading or payroll), rather than based on technology components. In response to a survey of more than 230 U.S. senior corporate executives and IT managers released today by Managed Objects, the Business Service Management Company, both groups most often identified the ability to create service-oriented IT costing models (59%) as a key feature in an ideal solution for optimizing IT application costs. Further, respondents most often identified a current inability to achieve this as their top barrier to accurate measurement (49%).

"Executives and IT managers alike are arming themselves with a better understanding of what technologies power the key services within their enterprises, and which services most effectively reduce costs or drive revenue.," said Managed Objects' CEO Siki Giunta. "Once they've reached that point, the ability to put dollar figures next to each service emerges as the final piece of the puzzle - it's almost the Holy Grail for running IT as a service to the business," she added.

While IT managers and corporate leaders agree on the need for service-oriented costing models, their opinions and priorities differ slightly on the best ways to reduce costs. Among IT managers in organizations who said they believed they would spend "too much" on technology in 2006, 57% are planning on implementing best practice models such as ITIL with the goal of cost control. In addition, 46% plan to build a configuration management database (CMDB) to better understand IT cost and asset information. IT managers also identified reduction of downtime as the most important goal of in terms of impact on their companies' bottom line.

By contrast, business leaders saw reduction of manpower requirements as most important, and initiatives usually associated with lowering man-hours also ranked among their top priorities. 50% of executive respondents chose automation as a key requirement for an ideal IT cost measurement solution, and 79% of executives who thought their IT organizations would overspend in 2006 said reallocation of headcount would be a top remedy.

"Costing by IT service is all part of a larger industry effort to approach IT in a more business-oriented manner through more disciplined processes. It's the natural follow-on to what we've seen companies already put in place in terms of ITIL implementations and other similar initiatives," Giunta added.

The findings released today preview additional results from an extensive survey commissioned by Managed Objects, "Measuring and Optimizing the Cost of IT: A Progress Report," which will be released in April. Members of the media interested in prioritized access to more comprehensive results that extend to best practices and adoption numbers are encouraged to contact Steve Capoccia at [phone] or at [e-mail].

About Managed Objects

Managed Objects is the Business Service Management Company. Business Service Management (BSM) aligns IT with the business by integrating network, system, application, end user, and business metric information into real-time business service dashboards. Through Managed Objects' BSM platform, companies effectively monitor, manage, and report on the services IT delivers to the business - services like online trading and e-commerce. Consistently acknowledged by the analyst community as best in class, Managed Objects has more BSM implementations in place than any other company. That is why AIB, Auchan, CSC, Credit Suisse, DISA, Fidelity Investments, JPMorganChase, NIH, Progress Energy, Reuters, TIAA-CREF and other global organizations rely on Managed Objects' BSM technology. For more information, visit www.managedobjects.com.