Change is good, it drives transformation. But should it always add to costs?
Budgeting in an unstable market
Data drives enterprise. From determining digital strategies for products, sourcing and capacity planning to pricing, marketing and customer support, organisations are massively dependent on data. So how should they set their budgets for data management and calculate the power required for real-time analytics?
The answer isn’t straightforward. There are lots of variables at play and anything – from markets to competition and regulation – could impact the forecast. Once the benchmark shifts, investments that were based on it can end up wasted.
It’s not what you spend but how you spend
Increasing spending on operational IT is no guarantee for growth or leadership. What matters more than the amounts spent is how the costs are managed.
The areas that can have the most positive impact include well-managed and effective platforming, outsourcing, automation and cloud migration. But resources need to be applied in these areas without compromising on operations, employee experience, partner convenience or customer satisfaction.
So how should you optimise costs?
As with most things, there is no one-size-fits-all approach. Every enterprise has unique needs and its own starting point at the outset of a digital transformation.
However, there are a range of considerations that should always be taken into account when determining where to allocate budget.
Questions IT infrastructure professionals should be asking include:
- Is outsourcing the best option?
- Does crowdsourcing present a hybrid solution?
- How can automation lower costs and improve user experience?
- Are hardware and software asset consolidations short–medium term solutions?
- Can IaaS and PaaS be used effectively to control costs?
- How can the role of the cloud be enhanced?
When asking these questions, your future operating model should remain at the forefront – it’s the lens that all decision-making should be made through. This is the foundation of the initial strategy element of our work with clients when we conduct our Transformation Advisory Assessment. We don’t want organisations to spend more than they need to, on IT infrastructure change – instead we focus on striking the right balance to ensure they have access to the skill and capabilities they need for effective transformation.