A primary area of focus for organizations seeking to control costs is technology. This is an area that is often rife with unnecessary costs through excessive unused licenses, duplicate capabilities, obsolete applications and inefficient infrastructure. That’s now being recognized as the problem that it is, with Forrester recently reporting that updating, refreshing and consolidating hardware, software and business applications was the top priority for IT leaders.
Achieving these cost optimizations requires an understanding of where those unnecessary costs are, recognizing where the opportunities to rationalize exist, and being able to implement appropriate solutions. But many organizations simply don’t have that level of insight. IT assets are managed in standalone systems that are incomplete and outdated, or they rely on spreadsheets that introduce even more problems. You can’t drive out costs if you don’t first know where those costs are, and many organizations simply don’t.
Even where there is insight into the costs of current technologies, many organizations have no visibility into the cost of making change. If the solution is simply to eliminate a few licenses then that lack of visibility doesn’t much matter, but if the requirement is to remove an application and potentially replace it with a more productive solution, then it matters a lot.
Knowing how complex it will be to remove and replace integrations with that application, how feasible data migration is, the learning curve for users, and so on all represents not just additional dollar costs, but also effort, disruption and opportunity costs that the organization has to absorb. Making the wrong choice doesn’t help to optimize costs, it just moves those costs to different categories, which doesn’t help anyone.
But the issues don’t stop there. Optimizing technology costs doesn’t just involve rationalizing the costs that are already committed to, it also means ensuring that cost effective new technology investments are made. That can’t compromise the ability of the business to achieve its goals and objectives, but IT must partner with business stakeholders to ensure that solutions meet those needs in a way that doesn’t drive excessive costs.
ServiceNow has a solution that can help organizations to understand their technology costs and make intelligent decisions around how and where to invest, which applications are candidates for retirement or replacement, and how to make those changes in an effective and efficient way. In the next blog we’ll look at those particular features in more depth. To hear more about cost optimization, check out the recent Enterprise Agility episode with Doug Page and Andy Jordan.
