Solutions-Based Answers To Cost Optimization
Whatever the challenges, we have repeatedly seen the advantages of a solutions-based approach to problem-solving for businesses—particularly when it comes to managing costs, which is nearly every company’s most pressing issue. Approximately 35% of information technology decision-makers expect their IT budgets to decrease in the next 12 months, according to IDG research on how IT leaders are responding to the pandemic.
Solutions thinking can be defined as a way of analyzing the capabilities of IT and how they can be brought to bear on business problems that are critically important to a particular business. By focusing on a company’s core value proposition, IT spending becomes highly relevant to problem-solving, and not simply “tech for tech’s sake.”
A business is foremost a people-driven entity, and great leaders rush to protect their employees, with empathy for them, their customers, and their communities. This is the first and most important step in adapting and strengthening an organization dealing with novel challenges.
Then, leaders using the solutions-based approach begin to focus on the next three critical steps: Stabilize the business. Evaluate and control assets. Engage with the market in new ways.
1. Stabilize the business
The need to stabilize the business is true no matter how the pandemic affects an enterprise. Essential services such as healthcare, government agencies, telecommunications, and supermarkets face unprecedented demands on their IT resources. Others are seeing a drop in demand, and are rapidly seeking ways to make their core value propositions relevant within new realities. All companies are striving to understand new ways to deliver maximum value. In every case, costs are changing rapidly in the enterprise calculation. If they are not controlled, little can be achieved.
We’ve already seen ways that cloud tools have been used to both help employees and stabilize the business. Google Workspace, which includes the video capabilities of Google Meet, enables teams, a company’s most valuable asset, to work from anywhere, with the highest level of enterprise security. Meet has been adding roughly 3 million new users each day, while retaining high quality and security.
To further stabilize the business, cash outflows—such as capital expenses, payroll, payments to essential vendors, resource allocations, and planned expansions—must be critically examined for both business viability and business understanding.
2. Evaluate and control assets
This leads directly to the next step: a process of evaluation. Many companies are still in the nonessential “business” of owning, updating, and running their own data centers, for example. With few exceptions, they are reconsidering whether this still makes sense. Cloud providers can offer cheaper, better data center services that allow businesses to treat them as a flexible operating cost.
Choosing for example Intel’s latest generation code-named Cascade Lake on GCP, will offer you greater than 20% price-performance improvements for many workloads.
The process of evaluating assets leads many businesses into surprising realizations of what they own. Almost all companies consume some kind of cloud service, frequently without central IT’s knowledge. Incremental costs may come from a department picking up a little online photo storage, say, or another group using its own collaboration tools. Each of these services may have been a small expense at the time, but collectively these can add up to a lot.
By consolidating and standardizing into a single platform, companies can have better control, better reliability, and a better ability to scale costs up and down, as needed. Google Workspace, for example, delivers a full suite of communication and collaboration solutions in one place. Single pricing is almost always better, both in terms of value and control, and not just in end-user products like Google Workspace.
Cloud-based virtualized software can cost less, take away on-prem maintenance costs, and be easier to change and manage. BigQuery, Google Cloud’s enterprise data warehouse, is optimized to work faster and at a lower cost than traditional analytics tools, saving companies north of 40% on their costs. Chronicle, Google Cloud’s security service, charges on a fixed-price basis, meaning customers don’t run afoul of the kind of pricing seen for extra data in traditional pricing models.
3. Engage with the market in new ways
With initial costs better controlled, and assets better understood, companies can begin thinking of new ways to interact creatively in the digital world. This is the most gratifying step, because it extends understanding beyond a company’s internal operations to building knowledge about the needs of the marketplace. And, compared with traditional means of outreach, advances such as chatbots, video meetings, and online ordering and supply can get good results for less.
In these early days, companies need to establish a new baseline of digitally focused solutions. What functions can be moved to the cloud first, and thus made more responsive to a fast-changing market? A few examples include the ways people are organized, data is analyzed, and apps are built. More complex undertakings may follow. In a recent report from the World Economic Forum, change management was the top challenge to transforming operations among executives surveyed.
The importance of a cost-effective and flexible IT system
It’s important to pause the idea that this work will soon be done. In times such as these, the idea of “normal” may be redefined several times. That means having a cost-effective and flexible IT system is critical.
Working in collaboration with senior leaders, identify core competencies—the key values that differentiate a business from its competitors—as the center of the digitized business. Then identify and maximize the flow of relevant data on these core aspects. The analysis and responses to that data become better systems of understanding and control. This process helps an organization become more resilient, and allows them to take advantage of new opportunities as they arise.
Challenging times call upon each of us to reach deeply inside ourselves. This is when it’s particularly useful to rely on disciplines like the solutions-based approach. In this way, preservation of the business can proceed into establishing a new baseline of speed and performance when the crisis passes.
Copyright © 2020 IDG Communications, Inc.