Continuous improvement on efficiency is a learning curve.

Optimised Technology Investment approach

As the current economic climate and the impact of COVID-19 mean we are facing an uncertain future, all investments (including tech investments) are under intense scrutiny and review. Organisations are attempting to identify and remove waste from their estate and cut all unnecessary costs. According to our recent Gartner survey, 29.2% of respondents are holistically examining all of their technology usage and looking for efficiencies. This might mean delaying or cancelling new projects and purchases, or reducing or cancelling subscriptions or maintenance and support contracts for existing investments. It is more important than ever to optimise costs, improve the return on investment of resources, and ensure that you select the right solution when making sourcing decisions.

What Optimising costs ?

What do we mean by cost optimisation? It means different things to different people, but too often when we talk about ‘cost optimisation’ people assume that it’s all about cutting costs, but that isn’t (or shouldn’t be) the case. “Cost optimization is a business-focused, continuous discipline to drive spending and cost reduction, while maximizing business value. It includes:
For Technology Guardians this means ensuring that technology investments generate the maximum value possible. This may mean cutting costs, but it also means considering how each technology investment drives business value. Although some technology may be expensive, that doesn’t mean that it isn’t providing value to the organization. Expensive technology may already be optimised because of the value it generates, whereas something inexpensive may be unused and wasted. This is why it is better to talk about ‘rightsizing’ when looking at the decisions we need to make on hardware purchases, software licences or cloud services contracts.

How to optimise existing investments ?

Organisations with mature IT, ITAM and SAM functions tell us that while they have generally cut the waste in terms of unused products, and have right-sized their contracts, they still see under-utilisation of products where only a limited feature set is being exploited. In these cases, we:

Getting the most out of new investments

Despite the cutbacks, reviews and search for savings, many organisations are still investing in technology projects. Our recent survey found that 41% of organisations will continue to accelerate digital transformation initiatives. But the climate of uncertainty coupled with the economic downturn means that even organisations that have continued to do well during 2020, are looking to increase resilience by reducing risk – including vendor-related risk – and are demanding shorter ROI periods on investments. It is worth remembering that satisfaction levels among tech buyers are generally low, which suggests that the gap between customer expectations and vendor delivery is high. Preparation is the key to maximizing ROI – knowing that you’ve selected the right solution and are ready for implementation. Investment in the implementation is equally important – numerous surveys over the years highlight that the software itself is rarely the reason for IT projects failing. Discussions with clients over the years have backed this up, revealing a lack of investment in preparation, project management and implementation. It is worth remembering that even the simplest of IT systems requires some level of work to install and configure – and the more complex your environment, the more careful you will need to be.

Key factors in selecting the right solution include:

In order to get the most out of your new technology investment you should:

Whether you’re looking to right size your existing investments, or make new investments, it is important to have the facts at your disposal before making decisions. Getting requirements right, investing in implementation and training your end-users are key. Cutting costs too far can irreversibly damage your organisation’s ability to deliver, potentially making things worse. So instead, focus on finding opportunities to get more value out of the technology investments you currently have, reduce your risk and improve resilience.

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