Many organizations mistake inaction for a cost saving but instead accumulate technology debt .
spend are fundamental to achieving the full value of tech investment . There are three components to getting there .
The first is cost transparency . It ’ s simple : you can ’ t measure what you don ’ t know . Companies unaware of what they are spending or where they are spending it , will never be able to determine what value they ’ re returning . Many won ’ t even realize they have various departments using multiple cloud services providers for similar purposes , with duplicate contracts draining the bottom line .
With cost transparency , organizations have unwavering visibility into spend segmented by department , vendor , project , running costs and more . That allows for analysis of trade-offs ; the ability to quickly identify unwanted discretionary spend that can be turned off today to save tomorrow – or equally optimize fixed spend today to avoid additional spend tomorrow .
The second factor is consumption-based costing . To get value , someone needs to take ownership . Historically , organizations leaned on assumptive costs because it ’ s easier to do , every department fronts an equal share of funds to pay for a service .
But it ’ s not a fair method . If HR uses 70 % of a $ 5m service , the other 10 departments shouldn ’ t be expected to cover it .
Executive ownership – which takes someone to lead the value conversation , monitor reduction targets and analyze use cases – is cornerstone to building trust across teams , and ensuring investments are delivering their expected returns . Without ownership , value becomes grey matter .
The third component of value realization is the unit rate conversation . If your cloud spend goes up 20 %, that ’ s not necessarily a thing , especially if the figure aligns with forecasts . If cost exceeds budget and unit rates increases , you ’ ve got a problem . It means you ’ re spending more than expected and commercial terms in contracts are less than ideal . However , if cost went up 20 % but the unit rate stayed steady or dropped that ’ s a direct reflection of value .
While it ’ s difficult to predict how severe and for how long today ’ s macroeconomic challenges will burden us , companies that ask why tech spend is important , who it ’ s important to , how it aligns to strategy and how that success is measured , will establish a basis for generating consistent value for every technology dollar spent . Consequently , those organizations won ’ t be forced to cut spend like many of their competitors and instead get more bang for their buck . p
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