Taking the First Step Toward Reducing IT Costs With Demand Management

Computerworld - In my October article, "Ten Steps to Modifying User Behavior and Reducing IT Costs," I listed 10 steps IT departments could take to negotiate the road to demand management by modifying user behavior and thus reducing IT costs.
This is the first in a series of articles meant to walk you through each of the steps in a practical manner. These articles will take you further down the road toward measuring, controlling and managing IT resources and investments. The first step is the most difficult, but it makes each subsequent step that much easier.
The two guiding principles behind the steps are simple: Empower users to make the right decisions by giving them information and choices, and provide financial incentives and penalties that motivate them to change patterns and behavior.
Step 1 -- Document the services you provide to the business community as a whole and to the individuals within it.
You must define the services that you provide, how you provide them, who is involved in their delivery and how much it all costs. Think of IT as a business that's consumer-driven and service-oriented, and envision yourself as the CEO. Ask yourself what you need to do to make a profit. Part of the answer will be incentives and penalties that can change user behavior. These should be accompanied by empowerment, which allows users to make choices based on clear information, such as support levels and prices. By allocating costs back to users and giving them the information they need to make informed decisions, they will be less likely to demand the fastest, biggest server when a smaller machine might do.
Your users are your customers, and you should sell your services to them through a service catalog in which your tiered service levels are explained. Users can use this catalog to find out what you charge for services at various service levels, the charge method (as a monthly retainer, per subscription or by usage, for example) and whether you offer price points for size, usage or service levels. Dialog and negotiation should take place with your customers when defining services.

If your customers are going to choose services and service levels that are appropriate to their requirements, the catalog should define your services in a business context, and the service definitions must be flexible and comprehensive enough for users to find what they need. Services must be measurable in relationship to service levels. Costing must follow standard financial guidelines.
Where do you begin? Bring together people who understand