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How to Achieve Innovation & Cost Savings in a Digital IT Environment

How to Achieve Innovation & Cost Savings in a Digital IT Environment

Gartner: IT Asset Managers and CIOS Must Join Forces to Manage the Costs and Risks of Digital Business

July 28, 2014

As the IT environment constantly evolves due to ever-progressing technology (think the transition to ubiquitous mobility, security concerns from BYOD and BYOD contracts for example), professional workplace strategies for achieving innovation and cost savings must follow suit.

With the rise of “shadow IT” – systems and solutions that are sourced outside the direct jurisdiction of IT* – CIOs in particular are often thrown for a loop.

In other cases, CIOs are the ones who create a “shadow IT” situation as a result of lacking the IT budget (although Gartner reduced the projected IT spend for 2014) or resources to implement new technology initiatives. Many even wind up incurring lifecycle technology debts from outdated programs that just didn’t pan out.*

But experts say that IT professionals (particularly CIOs and IT asset managers) could turn this situation into a valuable opportunity to improve an organization’s IT: “IT asset managers must help CIOs select the most sustainable digital business initiatives,” thus encouraging “enough funding to cover their full contract or asset life cycle costs.”*

 

IT Asset Managers and CIOs: Unite

According to Gartner*, a modern IT business model must maintain a flexible financial relationship between a business and its end users. Until governance processes adapt to guarantee adequate lifecycle funding, experts say, IT organizations can’t risk exposure to additional business costs that traditional IT budgets can’t cover.

Below, Gartner experts offer suggestions for facilitating collaboration between CIOs and IT Asset Managers:

 

1. Establish an early role in digital business initiatives.

Performing this simple task can guarantee coverage of all the costs of scaling successful projects.

CIOs IT Asset Managers
Increase your influence (while simultaneously reducing financial and digital risk) by advising on every technology procurement and risk management assessment.The goal is to build the necessary lifecycle planning experience to maximize success rates, control the costs of digital technology and minimize digital risk by leading a team that specializes in digital business initiatives. Focus on helping business leaders learn from any mistakes during the technology initiative process.Gartner points out that a successful digital technology initiative can actually be more dangerous than a failed one (e.g. multiplying software licensing costs, rising supply costs, or a shortage of budget money that’s unable to satisfy demand.

 

2. Manage lifecycles.

According to Gartner, lifecycle management can ensure that the costs of digital business are funded beyond just the initial investment.

CIOs IT Asset Managers
Ensure that you have a realistic understanding of the long-term costs, risks and benefits of various technology initiatives.As a result, you will be more selective about the technology you purchase, helping to avoid budget issues or chargeback. Help CIOs to:

1) Choose digital business initiatives to attract adequate funding to cover full contract or asset lifecycle costs.

2) Adapt to shorter, more flexible contracts to deliver short-term digital initiatives and time the migration to lower-cost commitments (enabling successful initiatives to be viable in the long-term future).

 

3. Share financial risks with business sponsors and external providers.

Being forthcoming and direct ensures that suppliers will cover the costs of individual technology initiatives.

CIOs IT Asset Managers
Decide the best way to share costs by identifying who should “own” the IT organization’s assets.*For example, many CIOs encourage pilot experiments, confirming that they will be ready for scaling and industrialization in longer-term adoption. This lets CIOs control and manage these services without assuming ownership of contracts or assets. Understand where long-term business costs are being created – especially costs that can’t be covered by short-term cost recovery – as well as where short-term services create data that must be retained for long periods of time.

 
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* Gartner Says IT Asset Managers and CIOs Should Work Together to Foster Digital Innovation and Avoid Technology Debt, Gartner. Gartner, Inc.


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