CIOs and Cutting IT Bloat: Forming a Plan
Growing market negativity, combined with increased regulatory scrutiny, is putting increased pressure on CIOs to greatly reduce costs, improve productivity and experience, make sure everything is secure, and keep adding new stuff.
Add to this a constrained labor market, and the job gets significantly tougher.
In times of such economic uncertainty, it’s critical to identify which tools your team is getting the most and least value from. To start, you need a holistic picture of what your operating environment (application inventory) looks like, in addition to understanding the current level of effort to support this environment.
“The reality is that we need to look long and hard at how operations and solutions are performing,” says Chris Plescia, chief technology evangelist at Aware.
He says once you have an accurate application list, then leverage a prioritization and decision framework that lets you identify the opportunities across the portfolio to reduce cost and risk and improve experiences. “Make the hard decisions to weed out and upgrade the applications that don’t meet the criteria, are single-purpose focused, or require additional manual intervention to gain the value,” Plescia says.
With this type of approach, you can begin to simplify the number of applications, improve your risk posture, and reduce the hours and effort that lead to the bloat. “Don’t be afraid to make the decision to implement new technologies that can solve more than one challenge,” he adds. “This will let you sunset older or inefficient capabilities, thus reducing your complexity and improving your performance.”
Muddu Sudhakar, co-founder and CEO at Aisera, agrees CIOs should be looking at jettisoning older tech, including some early immature cloud deployments and “bloated software contracts,” which equate to the software a company pays for but doesn’t often use.
“In a tough economic environment, certain technologies become either stale or a risky investment,” he says.
From his perspective, some of the key areas where the bloat can be cut are infrastructure and operations, development, enterprise software, and reducing SaaS and application licenses.
This includes virtual machine environments, individual DevOps delivery tools, declining operational technologies, monolithic point data solutions, process discovery tools, among other tools that fail to scale to provide higher productivity and are cost centers that hurt profitability.
Sudhakar says taking a data-driven approach by understanding industry spending benchmarks and getting additional perspectives from peer groups will help prioritize the plan to cut the bloat. “This will also future-proof your technology investments in ways that keep you on budget while meeting the expectations and needs of the business,” he adds.
“When we talk about IT bloat, we’re talking about IT service management spend on software or tools that you’re not getting the full value of,” explains Jenna Cline, head of IT strategy and planning at Atlassian. “We’re not talking about people but rather tools that were purchased that your team isn’t using to its full potential and doesn’t need.”
She says the second important thing to consider is that bloat is relative. “We’re not seeing IT spend decreasing -- but in comparison to the year-over-year increasing budgets that we’ve seen for the past decade, stagnating IT budgets may feel like a decrease,” she says.
To measure whether a tool is providing maximum value to your team, Cline says she likes to look at four key categories: usage, time to value, total cost of ownership, and growth.
For usage, it's important to consider whether the applications, licenses, and services that the organization has invested are being used, and if they are a “right-sized fit” for the firm. “This means you must know if you have a plan to use all these features or access at the level of investment we’ve engaged at,” Cline says.
She points out that the average ITSM contract is for three years or so, and while that sounds like a long time, if you’re not seeing time to value within five or six months, that’s a problem and something that needs to be addressed.
“Either the team isn’t aware of features included in your package, or the team doesn’t need the tools and features that you’re paying for,” Cline says. “The latter is a major problem that may mean you want to reevaluate the contract and vendor.”
She adds it is important to remember cost is more than just the amount you pay for a tool: Training costs, customization, downtime while migrating to a new system, general resourcing -- all can drain a team outside of just license costs. “Ask yourself, what’s the true TCO and do we have a firm picture of that that looks like?” Cline advises. “Are we getting the expected value or ROI out of our technology investments?”
Finally, the question of growth must be asked of oneself as an IT leader, but it's also a conversation with other members of the C-suite.
You must ask: How do we expect to grow -- or shrink, or maintain -- over the next 18 months and how does our current level of investment need to be adjusted to match that roadmap?
“While this can be hard to predict in times of economic uncertainty, I always advise to structure your investments with some flexibility,” Cline says. “For example, cloud tools are much more flexible than on-prem tools, allowing IT pros to scale solutions up or down as business needs change.”
Plescia says that now more than ever it is important to have an “optimization strategy” that looks across all the dimensions of your organization, identifying ways to ultimately do more with less.
“This is not a fad or flavor of the year exercise,” he says. “You need to authentically look at your entire operation, ask the hard questions and see where you have too many applications, people, outdated processes, and inefficient infrastructure.”
He also suggests including the organization's business partners to get an end-user point of view.
In this model, everyone brings their area of expertise, with a united focus of improving business security performance and experience. “It’s like surrounding the green with viewpoints before you hit the putt,” he says. “You need all these expert perspectives to know you have the full picture before making the decisions.”
Cline agrees it’s important to acknowledge that your approach to each stakeholder will be different and that transparent communication is critical. “Everyone has preferred ways of working and removing tools can be disruptive and sensitive,” she says.
She explains that Atlassian has a cross-functional leadership team that is invested in the IT solutions.
“It’s important that people outside of IT are across any changes that may impact how their team works,” Cline says. “IT investment follows the strategy for their part of the business, so any changes in IT strategy may impact how they achieve their goals.”
She adds that the best plan for cutting bloat begins in the planning/pre-purchase phase.
“Change, whether in people, tools, or processes, takes time and resources,” she says. “Realistically, if there isn’t a timeline, owner, and resources to support each part of your plan when deploying technology like an ITSM platform, it’s unlikely that organizations will see true value in their investment.”
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