IT Cost Optimization: How TEM Can Help You
Working towards IT cost optimization is the 30th reason to go beyond TEM and manage the enterprise digital footprint.
Optimization is a huge part of IT management. Actually, most practices in technology expense management are aimed at optimization in some way. For instance, invoice and contract management, inventory management, order and provisioning management, sourcing management, usage management, dispute management, and reporting as well as business intelligence are all examples of services that are not necessarily primarily focused on optimizing costs, but that still contribute to it in important ways.
Cost optimization can include comparing plans, disconnecting zero-usage devices and services and getting the best pricing and terms on all business purchases. Standardization, simplification, integration and rationalization of platforms, applications, services and processes also play a part in optimization, just like the automation and digitalization of IT and business operations.
The Gartner IT Glossary, defines cost optimization as “a business-focused, continuous discipline to drive spending and cost reduction, while maximizing business value”. In fact, efficiently optimizing costs is a multi-step process. Where to start?
Step 0: Centralize the Visibility of your Environment
Visualizing and centralizing your data is “step zero” because it’s a crucial step you need to think about before moving forward and taking action when working towards an efficient cost optimization strategy. Without knowing or seeing what you have, you can’t do anything with it. In many companies, information is only available to a handful of individuals, leaving other employees without the possibility of accessing data that might pertain to them.
A good way of centralizing data is through the use of dashboards. Your TEM software should provide you with easy-to-use, configurable dashboards that give you visibility into your data. Ideally, your dashboards are also interactive, with workable settings and functionalities so you can decide what you want to see at any moment.
A role-based access dashboard is even better! This way, you have a personalized access to the information you need to see and the security risk is reduced. Other notable benefits of a role-based access include the ability to compare trends in spend or usage, detection of over-usage and irregularities.
In short, seeing what you have, how much it costs and who uses it is the key to optimizing your IT costs. But since cost optimization is continuous, it’s often challenging for businesses to know how to keep it going. The next phases of IT cost optimization after centralization include:
Step 1: Evaluate your IT Costs
Ask yourself some crucial questions about:
- Your IT budget: Depending on your business needs, evaluate how much you want (or can afford) to spend and determine which IT assets or services are necessary and which aren’t.
- Your roadmap for the future: Make a concrete plan to make the whole process easier and faster. It doesn’t have to be detailed at first, but you should at least elaborate a game plan to improve your IT management strategy. What results are you expecting to see with cost optimization? What metrics and KPIs will you follow? Will you need to speed up your business’ digital transformation? Be more aware of tech trends? What will your employees need and how many of them will need tech support?
- How you can control your IT and telecom costs: Do you have the expertise to deal with costs internally or will you have to ask for outside help? What management solution would work for you?
- What TEM solution will fit your needs: Research TEM vendors before settling on one. Establish what your strengths and weaknesses are in order to discover what solution will fit your needs. Not all TEM providers offer the same thing, but if you’ve accurately evaluated your IT costs, the choice shouldn’t be hard to make. Determine what level of control you’d like to retain and how much you would want your TEM vendor to take on.
Step 2: IT cost management
IT cost management is another logical step in IT optimization, as it allows you to examine cost structures before deciding how to deal with them. Luckily, what would be a huge undertaking without TEM becomes a pretty simple process with the right tools in place. Companies benefit greatly from moving to the Cloud and implementing a software that will take care of everything TEM-related for them.
Step 3: Cutting costs
It’s important to take action towards reducing costs in the path to cost optimization. Both concepts are certainly intertwined, as cost cutting helps with cost optimization, but we shouldn’t always lump them together because they’re not exactly the same. Cost cutting is “done” at a specific point in time, while optimization is something that should be done regularly. On one hand, IT cost cutting often involves letting employees go, changing health plans, decreasing salaries, and other similar HR-related solutions or radical resources cutting. On the other hand, IT cost optimization focuses on solutions to drive spending and cost reduction while maximizing value.
How to keep it up?
Ensuring that costs are optimized for every employee is an important activity in any IT strategy. In a modern workplace, most people use technology assets and services, which obviously generate costs. So, monitoring individual usage and renegotiating plans suited to everyone’s needs is a good way of optimizing those types of expenses.
Cost transparency, a result of tracking employee usage and spend, is another step on the way to optimization, helps avoid overspending by giving IT managers full visibility over their assets and services. This visibility grants them the resources to analyze what they have and determine their plan of action.
Other techniques to achieve IT cost optimization:
- Going digital and modernizing technologies
- Implementing and managing cloud services
- Improving sourcing and procurement
And, most importantly, achieving all of this is made exponentially easier by using a TEM software.
Using TEM to optimize costs
A valuable technology expense management software will help you optimize business processes and IT costs in the long run; almost every aspect touches on optimization in different ways. Cost visibility, reporting, automated ordering and provisioning, inventory management, dashboards, consumer self-awareness, tracking discrepancies and maintaining good communication with providers, for example, all work together to bring you a multitude of benefits – notably cost optimization.
Contact us to find out how Cimpl can help you optimize your IT costs!