IT Cost Optimisation: A Programmatic Approach for the Digital Economy

by Andrew Peters-Smith, VCG CEO

Building an adaptable, resilient, and sustainable IT environment to support positive change is the goal of all business leaders, and gaining the edge to thrive, rather than simply running with the herd, is what most of us aim for.

Today’s workplace is a complex interaction between people, places and systems, and technology is there for a purpose; organisations strive for cost efficiency, effective workforce engagement and flexible, scalable IT services and platforms, and our role as technology leaders is to help achieve that.

In my previous article Evolution vs. Revolution, I was explaining what #TechforPurpose is and how it becomes our ethos and operating model. In this post I’m describing how cost optimisation is part of the ‘fit-for-purpose’ way we drive business forward and share our programmatic approach to tech cost vs. IT investment.

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There’s an assumption that IT is expensive – but what if staying ahead of the technology curve actually lowered operating costs and increased productivity? Is that possible or is it just more tech sales ‘hyperbole’, smoke and mirrors? … I know from personal experience that lowering operating costs through smart IT services can be achieved, and here’s how:

Tech organisations are just like any other businesses, they don’t have a magic wand or an innate business instinct that others lack, we’re just the same as everyone else, and we’re all looking to implement business behaviours that drive success.

But organisations in the tech sector do possess an insight into many of the technology pitfalls, blind alleys, and flawed decisions that non-tech companies so often make when planning an IT strategy. Cost optimisation is only one element, but it’s an important one, and we’ve designed a programmatic approach that we follow ourselves, to help decision makers manage this.

Cost Optimisation Maturity

Optimising IT systems and operating costs is a core part of our ‘Tech for Purpose’ approach, and  we’ve broken it into two interlinking and time-based components:

The Lean Approach, which focuses on:

• Workforce optimisation – demands, risks and gaps.
• IT asset and platform management.
• Rationalisation of applications, systems, and business practices.

And the Dynamic Approach, which focuses on:

• Business transformation, innovation, and sustainability.
• Evolution of architecture, data governance, applications, security, and automation.
• Developing trusted provider partnership.

The key things to consider in this approach are establishing a baseline of requirements, identifying opportunities for optimisation, and understanding current levels of spending.

How the plan will be implemented and institutionalised across all areas for companywide buy-in is next in line, and as with all working plans, they must be monitored, evaluated, and improved along the way to drive impact and apply the right levels of resource allocation.

Our programmatic approach has three core areas and formalised steps:

Cost & spend optimisation – by ensuring the hard costs associated with networks, hardware, systems, applications, licenses, and workforce investment are fully examined, understood and optimised.

Value optimisation  – ensuring technology investment delivers value and improvement in the areas of customer service, sustainable future operations, and stakeholder partnerships.

Innovation – what are the opportunities in the future ‘tech landscape’ for both the short and medium-term, and what benefits and value might they bring to the organisation.

We then implement a 5-step plan for cost optimisation and productivity improvements. Core elements and benefits of the plan include:

• Baselining the current position of your IT services, investments and operating costs.
• Assessing current spending and identifying areas for optimisation and refinement.
• Implementing ‘quick win’ immediate savings and ensuring everyone’s on the same page.
• Drive sustained savings and benefits with business analysis for further efficiencies.
• Monitor and evaluate optimised costs and resource spending for continuous improvement.

The time for action

The established IT transformation principle that evolution is preferable to ‘big bang’ revolutionary approaches is widely accepted. There will be times when large scale fundamental changes will be required, but overall, a managed transformation based on business needs, budgets, and future expectations works well, especially as so many systems are now cloud based.

In this period of economic and geopolitical uncertainty, there’s no better time to review all aspects of IT services and costs. We help technology and IT decision makers drive greater value by identifying needless overspend, reviewing operational IT business requirements, transformation plans, and advising on immediate and medium-term IT cost efficiencies.

Click to read  our ‘Technology and IT Cost Optimisation’ framework and eguide. For more information about our wider IT services visit our website or email us at: info@vcg.group.