Strategic Cost-Cutting in Information Technology: toward a Framework for Enhancing the Business Value of IT

Document Type : Research Paper

Author

Assistant Professor Faculty of Management and Accounting, Farabi Campus University of Tehran

Abstract

The increasing dependency of many businesses with information technology (IT)
and the high percentage of the IT investment in all invested capital in business
environment ask for more attention to this important driver of business. The
limitation of capital budget forces the managers to look for more wise investment in
IT. There are many cost-cutting techniques in the literature and each of them has a
different impact on the organization. This study is one of the first steps in providing
more insight on this issue via proposing a conceptual framework for strategic costcutting
in IT. The literature review revealed that the strategic role of IT in
organizations, IT costs structure, firm’s IT structure, senior management support and
organizational learning are the important factors that affect the cost-cutting
technique selection in IT. The proposed framework focuses on the strategic role of
IT in business to suggest which cost-cutting techniques are the best to be applied in
an organization in order to save costs while ensuring high-quality service and
support for business growth and maximizing business value from IT spending.

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Main Subjects

Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 7, Issue 1 - Serial Number 1
Iranian Journal of Management Studies
January 2014
Pages 21-39

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