The Final Frontier: Ultimate CIO Guide to Cost Saving and Growth | ScrumStart

The Final Frontier: Ultimate CIO Guide to Cost Saving and Growth

Ultimate-CIO-Guide-to-Cost-Saving-and-Growth

Reduction of budget and demand to do more with less has off late become the job description of a CIO than just remaining an annual phenomenon that used to be triggered by the budget. Almost every established corporates today look cost reduction as their top five key focus area every year. The cost reduction has started coming with new names like automation, rationalization, outsourcing, productivity improvement, and many more such definite nomenclature but the essence remains the same ‘Do more with less.’

As an established expert in managing programs for large corporates, Team ScrumStart have been advising many companies on their cost reduction strategies and have learned many lessons of what to do and what must not be done.

  1. Look Beyond the Normal: Every CIO keeps cutting workforce and renegotiating the deals to face the same situation in a few months. The typical ways of cost reduction may give any organization its due for a year or a couple more, but not perpetually. Instead, extending such strategies as the only way to cut cost, CIOs need to look beyond and reinvent their roles from a support role to a business function. The three most effective of these strategies can be:
  • Automation: Digital transformation is one of the most effective methods of reducing cost and improving the experience of employees and customers. Cloud migration, legacy modernization, using the power of AI and other new age technologies hold immense potential for any business. In the coming time, automation may no more remain an option but a necessity for survival for any company. The challenge in such a transformation is not technology, but the mindset of employees of any organization that the leadership must plan to soften and embrace any changes coming to improve their business.
  • Setting your Offshore captives: Cost arbitrage by setting offshore captives in geographies like India has come up as a big quick win for CIOs and every CXO to cut their cost. The DIY (Do it yourself) model has proven to be the most cost-effective of every method along with a vendor driven Virtual captive that runs on a cost-plus model. A saving of 20% to 40% can be achieved on workforce cost using this model and more and more companies globally are doing this.
  • Become a consultant to business: CIOs should no more be everyday order takers, but act as consultants and run their IT team as a business. Most of the companies have started using their IT as a business to ensure better accountability; however, this does not guarantee a consultative approach from the technology team. CIOs need to ensure that they create their organizations professionally that sells them projects and participates in the business SLAs like any other business leader to earn their respect.

Check out our latest whitepaper on How to Setup a Virtual Captive and Trust Business Excellence Model.