CIO Brochure
Explore ways on how to successfully strike a balance between innovation and cost. Download here:
We believe that technology leaders who successfully manage the conflict between cost and innovation will emerge as winners in the digital economy. Against this background, IT needs to transform from within. It’s time to reconsider the way it operates – to foster innovation, increase flexibility and reduce time to market.
The function needs to transform its governance to embed an agile philosophy. In addition, it will be important to develop strong relationships with providers and partners, and leverage ecosystems to tap into new opportunities for innovation.
In this article, we explore five critical elements to get right in adopting what we call “the art” of innovation within the IT function – and organization more widely.
These five elements should not be addressed in isolation but adopted holistically, consistently and concurrently in order to create the environment that allows innovation to flourish.
The goal is not to keep the technology spend as low as possible,
but to get the best possible value from IT.
With “the art” of innovation established, we can now move over to “the duty” of containing costs. The goal is not to keep the technology spend as low as possible, but to get the best possible value from IT. Only funds that are allocated effectively create maximum impact. Cost management provides the tools to achieve this in three ways:
- By providing full transparency over IT run and change costs
- By identifying the most effective cost optimization levers
- By effectively charging IT services to business and measuring these against their value
Savings potential
10-30%Effective cost management can generate savings of up to 30%.
Cost should never be considered in isolation – they must be compared to the value generated. Armed with this knowledge, technology leaders can make the right strategic decisions. They can also identify which initiatives are most likely to increase the value generated per funding allocated. In our experience, organizations can expect savings in the range of 10% to 30% by buying cheaper, buying less, buying better or seeking to improve IT performance.
Companies that succeed in embracing “the art” of innovation and “the duty” to contain costs will be well positioned to thrive in the digital economy – today and as it evolves.
Summary
At a time when IT teams are under huge cost pressure, the need to innovate has never been more critical. We explore key elements of IT’s transformation journey to tackle the conflicting priorities and be well positioned to thrive in the digital economy.
