Rapid change in technological framework and an agile IT environment is a common theme across businesses in current times. Information and communication technologies, cloud solutions, security and risk management services are among the fastest-growing outlays for many companies. The overall IT spend is directly proportional to the organisation’s future growth. Whilst the current evolution in IT demand is true, there is a need for companies to govern this investment and maintain the balance between IT supply and business demand. It is easy for inefficiencies to creep in when suitable cost control levers are not applied.
There are challenges that come along with change in an organisations ICT environment and the ability to adapt swiftly and efficiently defines the success strategy for future growth.
Consolidation and lifecycle management
ICT assets and services are often spread out across business locations and sites. Over a period of time, it is easy to lose sight of these investments and there could be several reasons for this – assets procured for critical new projects (panic ICT purchases) may be later be deemed unnecessary due to projects being completed or stopped, sheer volume of assets spread across geography, staff turnover, organisational restructures or re-alignment, sites shut down, relocations or simply due to time lapse.
An untraceable asset may still incur costs through the service provider which a business is unaware of, leading to unproductive investments and wasteful resources. This happens far too many times with many businesses paying for a product, service or asset that is not is use (i.e. paying for redundant services) which is a negative cost that impact overall ICT outlay for the business. In addition, the process to then raise disputes and follow-up is cumbersome, time consuming and unproductive.
Hence the need to consolidate all ICT assets and services under one solution and deploy a lifecycle that can plan, track, manage and retire them efficiently. This exercise is an outcome of a collaborative process between the business and a solution provider, using an effective managed cost optimisation service.
The demand-supply imbalance
For any business, high cost is a direct result of inflated ICT demand. If a business is unable to forecast the true demand it could lead to over-supply of resources or underutilised ICT resources– be it too many mobile phones or laptops, unused storage capacity, unwanted software licenses, bulk data purchase towards unforecasted demand; all this drives IT cost skywards.
In some cases, volume purchases in order to secure ‘best price’ or as a ‘safety net’ for excess consumption, could lead to organisations ratcheting their spend, towards idle capacity. A CIO often needs to justify the financial IT cost to the CFO, which can be achieved if there is adequate visibility and control on this spend.
A false economy is often created, when businesses justify their bulk-purchase decisions with the rationale that locking in low rates for their hardware or service contracts will guarantee that they will have capacity in reserve to manage peak workloads.
Here’s how Telstra’s managed cost optimisation service can control unproductive ICT spend:
- Adoption of smart analytics and intelligent data reporting to identify actuals that form the basis for guided future purchases.
- A systematic and robust tracking and monitoring mechanism that creates end to end visibility on the entire ICT stack of services; increasing transparency and control.
- Automation and digitisation of business processes, keeping control levers in place to avoid excess capacity or resource spend.
- Centralised procurement of IT services to reinforce budgetary governance and controls.
Mastering complexity through simplification and rationalisation
Elimination of complexity is critical for companies to focus on urgent priorities and facilitate quick and accurate decision making, in any field be it strategic investments or goals, ICT spend, financial management, customer success strategy or business operations. Aiming to reduce uncertainty in all these areas and re-establish control amid any new complexity, companies tend to introduce new reports, rules, ICT investments and processes. This only adds to proliferation of unwieldly assets, services, processes and systems. Companies that are able to focus on agility in the face of increasing external complexity will have more success in controlling their ICT outlay.
Centralisation of IT procurement and automation in order processing enables control and keeps cost rationalised. Digital workflow and automation ensures compliance. Everything is monitored, reported for and governed, leading to rich future investments.
Rationalisation of the portfolio of ICT assets and services and keeping on only what is required, can lead to huge savings as unwanted resources are then cut down, decision making is structured, business processes aligned and negative cost avoided.
To learn more about how Telstra can support your business goal of ICT cost optimisation, download our brochure.