CIOs have a challenging fiscal responsibility to their company. During times of growth it has been to invest in business-technology innovation to support profitable expansion over a multi year horizon. Today they must focus on demonstrating tangible business value from IT in short order at a time when budgets are tightly constrained.
Now the stark challenge is to deliver demonstrable business value fast or have IT budgets further cut as “overhead.” This is not a new dilemma but it has never been so urgent or harsh. Even in the business growth years, many executives were uneasy about the payoffs of big IT investments, but now they inevitably begin with “No – let’s wait” rather than “OK, let’s look at it.”
CIOs must make it their mission to make a Return on Investment by finding the “R” without asking for the “I”. But how ?
Sweating the IT assets
What is it worth to get 20% more use from your sales force automation tools? How many excellent B2B Web tools, HR intranets or simple customer call centre services are not being used because people don’t know about them, or because they were created in one part of the firm and haven’t been transferred, or integrated with other systems?
Latent value in existing IT assets and processes can often be unlocked with existing tools and technology. Much cost-cutting activity involves simplification. By using one to fund the other it is possible for the CIO to demonstrate the value of their technology even as budgets are squeezed.
Put up or shut up
CIOs can reduce IT operational costs in a range of ways, but as we argue here, you’d better have a good understanding of the costs before you start. Here are some examples of areas of cost to attack.
Unlocking latent value
Optimise value from IT assets
Improve staff productivity
Improve operating margins
Reducing IT costs
Economies of scale/simplification
Simplification of the IT platform
Economic substitution
Process
Vendor management