Most CIOs are very familiar with cost-cutting within the IT landscape. However, the evolution to digital business means CIOs and technology functions now need to look beyond this as a simple expense reduction activity.
They need to shift their focus to longer-term cost-optimisation. A cost optimisation strategy that optimises the business value of their information technology.
Organisations may have exhausted the low-hanging fruit for saving money. But to be successful cost optimisation should be a continuous exploration of how technology, processes, and people (independently and combined) work, in order to add more business value.
With that in mind, here are 5 cost optimisation strategies that you may not have explored to help transform your business and help you on your journey of cost optimisation.
1. Business process outsourcing (BPO) as a cost optimisation strategy
The old adage, “focus on what you excel at and outsource the rest”, rings true in this arena. Many businesses still try to do too much themselves. Business Process Outsourcing (BPO) can be a challenge. However, sourcing, negotiating and leveraging your BPO partners is a rapid way to significantly optimise costs, build flexibility and improve processes.
2. Digitalisation of Business Processes as a cost optimisation strategy
Business processes are the fabric and ecosystem which runs any successful organisation. Many of these processes present opportunities to become more efficient through reviewing and digitalisation which can lead to significant gains in business performance and reduction in costs.
Achieving higher levels of appreciation for business processes remains a challenge for many CIOs. Change, however, is inevitable and necessary when you are consistently reviewing your business processes. Establishing process management as a part of the company’s fabric will help to ensure that change becomes a continuous normal process and is more easily adopted by everyone involved
3. Continuous improvement culture can significantly improve cost optimisation
While some companies adapt to change quickly and have a culture where change is simply part of their success pathway, many others remain behind with their head in the sand.
Sticking with outdated systems and processes because ‘this is what we’ve always done’ is not an approach that will lead to success in today’s fast-moving technology landscape. It also leads to a fixed mindset and culture that is slow to adapt as it grows.
Todays CIOs need to work collaboratively with business leaders to identify and remove these issues, which are typically in the form of reworks or delays due to issues further up the line. Giving them the space to focus on lean improvement efforts.
4. Improving data management as a cost optimisation strategy
Data carries a cost. This cost comes in the form of actual cash spent on storing, processing and managing data. Holding data also carries a risk in terms of legislation around data security.
Improving data management reduces legislative risk and costs. But more importantly, having good data management furnishes the leadership team with good information to make informed decisions across the enterprise more quickly and accurately.
Business value creation is a by-product of good data management.
5. Customer service as a cost optimisation strategy
How does Customer service help with cost optimisation? This may seem unrelated, but it is not. The digitalisation of business has supported rapid growth for many organisations. It has facilitated the breaking down of barriers to doing business.
Take the example of banks, once a high street feature in every city and town with their rents, staff, maintenance, etc. Digitalisation and improved customer service have allowed them to reduce their footprints (and costs), provide banking 24/7 with no queuing, and better service to their customers.
Think about how you could better serve your customers and what benefits it would bring to all parties.
Want to know more? Intercor works with large-scale clients who wish to transform and optimise their businesses for growth and value creation. A combination of our cost optimisation services and tech-enabled business design solutions yields outstanding results. Book a call with us to talk through the opportunities.
Why not download the full article and read up on the 7 Levers for Rapid Business Growth and Increased Business Valuation article?
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