Managing Your Technology Costs in the Middle of the COVID-19 Crisis
The world of business as we know it has changed because of the disruption caused by the COVID-19 pandemic. Lockdown restrictions have led entrepreneurs to rethink their method of operation to continue with production.
Some companies have taken the approach of equipping their teams with the necessary tools to work from home. This may sound fairly straightforward but, in the long term, other costs may arise as a result of this decision. Your business may need more IT staff to manage the introduction of new technologies into your operations, and you may want to invest in newer technologies to improve efficiency.
Most companies are experiencing a financial slump at the moment. Spending copious amounts of money on state of the art technology might not be feasible right now. So, how can your CIO optimize the available budget for the technological upgrades? How can they manage your business technology costs during the pandemic?
Understanding the Bigger Picture
Before making any decisions, your CIO should look at the requirements for the new technological portfolio. The cost process can take place once they have an in-depth understanding.
So, how can they get a better handle on the needs of your company?
If your company has many different units, there is a chance that the IT department might not have a full understanding of what each unit needs. Some units may add customizations to continue with their operations without your IT department’s knowledge.
Understanding the needs of each business unit is important to plan cost reduction strategies that cause little disruption. Your CIO and IT department will have to gather the necessary information to have a full understanding of the scope.
Technology Business Management
It’s easy for your IT department and CIO to fall into the trap of applying ad-hoc cost-cutting measures. The desired strategy should have long-term cost-saving benefits, with a forward-thinking approach. An effective way to create this strategy is by using the Technology Business Management (TBM) framework.
The TBM framework enables you to integrate IT into every unit of your operation. It provides you with a mechanism or pathway to achieve this integration. Before, IT departments were divisions that were separate from other units. With TBM, your IT department is at the core of all goals and objectives throughout your company.
The key is to make informed decisions, as opposed to spontaneous and panicked ones. All cuts should be made after careful consideration and research into the cascading effects that they may have. Now is the time to remember that the ultimate goal is to remain ahead of your competitors in the long term. The decisions that you make now could help you to achieve that goal or could leave you miles behind the competition.
Prioritizing Spending and Projects
Your CIO and IT department can make informed decisions once they understand the technology needs of each business unit. This includes knowing the assigned value (overheads) required for each of your products and services. You might need immediate cost-cutting to keep your company afloat right now. But, strategic decisions will ensure the sustainability of the applied measures.
Do Your Research
To decide on how to spend money and rank projects, CIO’s and their IT departments should do some research. They need to gather as much data as possible to explain their decisions to other executives.
Your CIO must take the lead and ensure that they make the best possible technological changes for each department. Including scaling down your on-demand cloud services or evaluating your applications portfolio. Any overlaps in these areas can be consolidated or removed completely.
Re-evaluating Investment and Governance Protocols
Your company should re-evaluate its policies surrounding investment and governance. Especially in light of the pandemic. Changes in the market will have an impact on your internal processes and outputs. You should reassess the targets and forecasts for each department and predict how they may have changed. Under the new conditions, tracking costs against deliverables will be key to understanding how your forecasts should look.
- Re-Evaluating Business Processes
Before the lockdown, waterfall-style project-based systems may have been ideal for completing projects. The standstill may have revealed some flaws in that system. The method might not be completely obsolete, but your CIO should check if there are more efficient ways of getting the job done under the circumstances.
- Flexibility is Key
As with any major disruption, flexibility is key to ensuring the long term survival of your company through the pandemic. Your IT department must adopt agile processes to keep your business flexible and able to handle any new changes that could happen.
This pandemic has shown the importance of being dynamic and, potentially, the need for automation. Applying these two factors to your company’s investment and governance processes could ensure the sustainability of your operations. The goal is to create strategies that build your company and make it resilient to sudden changes.
Managing your Technology Costs
Flexibility and resilience are the secrets to making your business operations sustainable. You should ingrain these qualities into all aspects of your processes, especially your technology cost management.
During this time of great change, IT is going to become critical to your company’s operations. Right now, the temptation may be there to spend as much as possible on new technology in the shortest time. The uncertainty of the market and revenue generation makes this a risky choice.
Your approach to dealing with change should be strategic. Engage with all the business units in your company and use an integrated approach to assist and manage their operations. The IT department can become a very resourceful tool to achieve this, especially if they apply frameworks such as the TBM. But, even then, mindful and data-informed spending should always be the priority.
The ideal outcome is to create and apply strategies that can make your operations leaner and more cost-efficient in the long run. If done correctly, the productivity of your company may improve and these strategies can still be used long after the pandemic has ended.
The key is to have a long-term mindset and to understand how valuable your IT department can be to improving your organization as a whole. This will make changes not only to your internal environment but to your company’s ability to deliver its products to its clients. Happy clients mean higher revenue. That can bring even more positive change to your employees and your organization as a whole.
We are helping companies to scale their operations throughout this crisis and beyond with virtual employees.