IT organizations today share a common and longstanding focus on cost discipline. At the same time, CIOs face constant pressure to fund investment in new technologies such as cloud and Robotic Process Automation (RPA), as well as enhancements to governance and vendor management capabilities.
This creates the challenge of finding additional savings from already tight and closely managed budgets. If you’re a CIO wondering how to reduce spend in operations that have seemingly been squeezed dry – perhaps you’re squeezing the wrong places.
Here are three often-overlooked areas where low-hanging fruit is likely to be found.
In the telecoms space, prices are steadily declining, so that 12 to 18 months after a contract is signed, rates are often already trending away from competitive standards. In this environment, failing to undertake regular assessments of contracts is to leave money on the table. In addition to paying attention to the market, buyers need to maintain vigilance over their carriers and be proactive to ensure that negotiated discounts are actually reflected in invoices.
Hardware and software asset management represent a second area of opportunity. An effective negotiation strategy that leverages competitive market rates and insight into technology trends typically achieves savings of approximately 25 percent on software negotiations and 15 percent for hardware purchases. Equally important, an asset management strategy is essential to mitigating audit risk related to violations of enterprise licensing agreements, as well as to restructuring vendor contracts during and after mergers, acquisitions and divestitures.
A third area of potential cost-saving focus is print services. Enterprises today spend millions of dollars on equipment, paper and ink to print invoices, statements, reports and other materials. For a Fortune 1000 organization, total print costs can range from $5M to $100M+ a year, depending on the industry. Financial services and insurance have traditionally been particularly paper-intensive. A print services strategy that assesses existing print operations, optimizes internal processes and applies outsourcing where appropriate can drive cost reductions of 20 to 30 percent on average. In addition to reducing cost, a print strategy can build a foundation for a transition to digital communications and drive further savings by dramatically reducing print volumes.
While CIO priorities are focused on high-profile technologies and solutions, it’s important to recognize that innovation needn’t preclude basic cost discipline, especially in areas that have traditionally received little attention. In fact, the latter can generate savings to fund the former.
This blog is based on an article originally published in Outsource magazine.