IT Cost Optimization

What Does IT Cost Optimization Mean?

IT cost optimization (ITCO) is a process that appraises the general value of IT architectures and software products in order to support business goals and objectives. Businesses can use ITCO plans to make more efficient use of technology and to make sure that IT resources enhance business processes rather than hinder them.


Techopedia Explains IT Cost Optimization

IT cost optimization may refer to systems that maintain cost transparency or to resources that protect the business from adverse technology impacts in a merger and acquisition (M&A) event. In other words, ITCO can help with planning in case a merger or acquisition requires analysis of IT assets.

Some business professionals may refer to ITCO in the context of return on investment for technology or when trying to figure out difficult issues around value for cost. Aspects of an ITCO plan may include developing efficiencies for technology, looking at the prioritization of IT tools, rightsizing IT resources for business use, pushing for better capacity or performance for technology, and evaluating sustainable growth alternatives. All of these guide businesses toward a more precise use of the IT resources and architectures that they have invested in for the future.


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Margaret Rouse

Margaret Rouse is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical, business audience. Over the past twenty years her explanations have appeared on TechTarget websites and she's been cited as an authority in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine and Discovery Magazine.Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages. If you have a suggestion for a new definition or how to improve a technical explanation, please email Margaret or contact her…