CIOs Reimagine IT Expenditure

CIOs Reimagine IT Expenditure-01

Even with a substantial amount of monetary investment available for their digital transformation initiatives, many CIOs still struggle with inefficiencies in their operating processes. Hence, they should reimagine their IT expenditures to reduce inefficiencies that not only will align with their financial imperatives but also provide them an opportunity to increase value and drive business transformation.

As per a recent survey conducted by Gartner, the global IT expenditure is projected to a total of US $ 4.5 trillion in 2022, an increase of 5.5 by 2021. While this increase in budget provides an optimistic view for CIOs to enhance their IT infrastructure, many executives still expect these investments to drastically improve efficiency in today while optimizing their monetary investments or reducing it as much as possible. For CIOs who are data-driven, concentrate on efficiency and optimization, the reduction can be extremely powerful while designing IT expenditure strategies.

On the surface, the reduction can seem like a step back. But CIOs should instead take the opportunity to reduce as something that will enable them to reduce waste and inefficiencies in the operating and engineering processes. It will equip them with better and more efficient spending while at the same time increasing value from their existing investments. Additionally, reducing IT expenditures can also force the CIOs to rethink their strategies and drive innovation and business transformation.

Also Read: Top Strategic Technology Trends for 2022

To approach the topic of reduction, CIOs should reimagine their expenditure. They should identify the efficiencies that exist in their cloud-first operating models and the ones in reskilling the workforce. They should alter their spending to generate space for reinvestment in IT capabilities that not only drive long-term growth but also rotate the IT cost base to free up their funds for upcoming initiatives.

Here are three ways that CIOs should reimagine their IT expenditure habit:

  • Design a new expenditure profile 

CIOs should create a new expenditure profile for their organizations that focuses on the right IT spending and not the cheapest. While they may be tempted to look at historical expenditure patterns to make decisions, they should instead weigh the necessary tech investments for competing in volatile markets. They should base their spending decisions on the disruptive value of technology, growth platforms, business priorities as well as their present and future IT and business needs.

CIOs can also capitalize on the step-change efficiencies that occur when incorporating AI in the business and intelligent automation. This helps to revamp how the job is done and how technologies can build a self-funding approach to generate cash reinvestments.

Also Read: Top Strategic Technology Trends for 2022

  • Develop variable cost structure

CIOs should develop variable cost structures that replace benchmarks with value levers. This, in turn, provides them with more flexibility while achieving savings moving forward. Moreover, it is crucial that they understand what levers they should focus on, to begin with. This approach of value levers can help CIOs to identify potential saving areas. CIOs can use this extra funding to transform the organization, making it flexible, faster and proactively innovative.

  • Improving value transparency 

From a service perspective, CIOs should audit all the categories of IT expenditure and view it as a whole. This will enable them to increase the value transparency at a much rapid pace. They should go beyond developing cost efficiencies and optimizing IT expenditure versus value delivery. Additionally, CIOs should identify opportunities to realize material savings with reductions in consumption charges depending on the business need.

By executing suitable cloud-first strategies, attaining cost savings via reskilling employees, and reimaging the above-mentioned IT spending, enables CIOs to reduce without a reduction in business and tech transformation outcomes.

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Vishal Muktewar is a Senior Correspondent at On Dot Media. He reports news that focuses on the latest trends and innovations happening in the B2B industry. An IT engineer by profession, Vishal has worked at Insights Success before joining Ondot. His love for stories has driven him to take up a career in enterprise journalism. He effectively uses his knowledge of technology and flair for writing, for crafting features, articles and interactions for technology enterprise media platforms.