With uncertain times and a recession predicted in the year ahead, savvy businesses are already considering cost-cutting measures to take on economic shifts. Have you thought about how innovation and cost optimization can work in synergy with your cost-saving efforts? Funds saved employing innovative cost-saving solutions can, in turn, be used to fuel additional innovation, creating a beneficial, continuous loop.
Here are 3 strategies that have proven to be successful for businesses we’ve worked with:
Application portfolio optimization (APO) is one of the most direct and effective ways to tackle cost optimization.
When done successfully, an APO will help an IT organization to:
Achieve significant savings
Drive down future costs exponentially
Improve staff skills and capabilities
Increase productivity of tools and processes
This is an important step to consider as it can set the basis for other cost-saving efforts, such as SaaS optimization, server optimization, application retirement, and redundancy elimination.
Here’s a framework for APO that has seen practical, real-life success among Wavestone’s clients:
Create an inventory of IT applications
Assess skill levels and retire or create replacement plans for apps lacking good skill-set support
Determine renovation priorities
Validate migration plans and roadmaps
Reprioritize service level agreements for strategic applications
Lower IT operating costs and reinvest savings
Increase asset utilization
Increase IT responsiveness to business demands
Transitioning to cloud computing can help an organization remove budget hurdles and reduce redundant spending. The savings achieved can then be allocated toward business-enhancing products.
Wavestone has helped numerous clients successfully navigate cloud migration with excellent results.
We recommend developing strong FinOps capabilities throughout your cloud journey to minimize financial threats and maximize opportunities. Some key steps include:
Establishing an enterprise-wide cloud center of excellence to manage and oversee your cloud infrastructure
Implementing financial controls and transparency to match the growing cloud services landscape and user base (internal and external)
Aligning your cloud investments with business objectives in terms of business benefit, functionality, revenue, and cost implications
When implemented effectively, robotic process automation, AI-based enablement, and automation bring the following benefits to organizations:
Redeployed human capital to higher value tasks
Increased speed of delivery and quality
Financial savings and improved run costs
Some important principles for rolling out and running intelligent automation and AI include:
Acting sooner rather than later
In a few years, this technology will become a norm, not a competitive advantage.
Avoid service supplier lock-in
With rapid changes to technology, you need the flexibility to use and upgrade to the best, most current solution to keep costs down.
Don’t limit the possibilities of AI and automation
Treat them as a means to an end and expect more than cost savings. See the implementation as an opportunity to solve business problems or even reinvent the way you conduct business.
Governance is key
Proper IT governance will help you prioritize projects for investment and guide proper implementation. You’ll need a governance framework that supports emerging technologies, while identifying and managing risks, to prevent unwanted consequences.
In competitive environments, the companies that come up on top are the ones that view difficult situations as opportunities to extend their lead and differentiate themselves. This tried-and-true recipe of finding success works in both situations of economic surplus and downturn.
The most important point to focus on in a recession is not to dial down technology investments, but to become more decisive in selecting investments, coupled with laser-focused execution.
Wavestone can help you unlock trapped cash you can invest in strategically necessary projects. Contact us to learn more.SPEAK WITH A BUSINESS INNOVATION EXPERT
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