As business leaders emerge from the ashes of pandemic firefighting, the focus has now shifted to achieving growth. But despite this positive outlook, the C-suite’s hands are still very much tied when it comes to making new investments to support this vision. Purse strings remain tight and market factors, including labour shortages and rising gas and electricity costs, mean it’s now time for a delicate balancing act: make the right investments in technology today to flourish tomorrow, without putting the business at unnecessary risk. But where is this vital budget going to come from?
Unlocking future investment by assessing current spend
Understanding the return and efficiencies of current technology investments is the first vital step to freeing up capital and supporting business growth. Cost transparency and taking a deeper look into technology usage now may just unlock vital budget for new innovations. For example, there might be software licenses you’re signed up to that have a big cost implication but aren’t being used or needed. A better, and more accurate, understanding of this and other actual usage insights will help optimize existing investments. It will also help you identify where costs can be cut and what gaps and efficiencies exist for future purchases.
Look to rightsize rather than downsize
This is where ‘rightsizing’ comes in. By taking this approach, the C-suite can take a strategic view of current investments to streamline operations by having an end-to-end view across the entire IT portfolio. In fact, according to Bain & Company, businesses that rightsize their workloads can cut costs by as much as 30-60%. Inevitably though, this requires forethought, analytics, and clear, transparent planning.
To make this a reality, CFOs and CIOs need to work together. It can be challenging for CIOs to find the right balance between operations and innovation, especially as they are often expected to lead innovation while reducing spend and also accelerating global expansion. In today’s competitive world, CIOs must be smart about how their departments are purchasing and using technology and work closely with the CFO to deliver savings through the right approach for business growth.
Visibility is vital
It is clear that real-time analytics are crucial to guide the C-suite in making the right decisions in this situation. This includes understanding usage, performance and cost levers. All of these factors play a part in making the right investments and vendor choices. After all, it’s estimated that digital transformation spending will grow to more than 53% investment by 2023.
By using specialized tools for IT Financial Management (ITFM), data-gathering can be automated, reducing the risk of human error. This also allows the CFO and CIO to develop fact-based scenario planning that can inform their decisions on rightsizing and investment in the company’s future.
Stay ahead of the game
Businesses can no longer put their heads in the sand when it comes to the next growth phase. It is time to make informed investments in their digital capabilities. These investments should be the right size for the present moment, to ensure you can grow and scale for the future. That means turning to cloud-based services and a scalable IT infrastructure. Without them, you risk being left behind and losing valuable time.
Rightsizing budgets and businesses is the pathway to success. But to make it work, you must first have the right level of transparency and visibility to make those rightsizing decisions.
At Serviceware, we recognize that these are challenging times for CIOs and CFOs, forced to make difficult decisions to ensure business liquidity. Talk to our team today.