Step No. 3: Establish governance
In general, CIOs have likely been engaged in several cost optimization initiative discussions. The most important task is to manage all ideas proactively via a cost optimization government team and evaluate the potential.
Some ideas might result in modest savings, because they only reduce IT costs, while others will impact business spending and revenue. “When IT introduces a new payment model that is easier to maintain and improves customer experience at the same time, it is not only cost-effective, but also enables possible new business models,” Anderson says.
Step No. 4: Start with quick wins
Team up with a trusted business-unit leader, communicate expectations for what is to be accomplished and explain how IT can support the goals of the business unit. The best way to ensure organizational buy-in for a proactive cost optimization strategy is to showcase a portfolio of quick wins — projects or changes that achieve immediate cash savings without costing anything or are entirely cash-positive without requiring much spending.
After completing a few of the projects, present the portfolio to the CEO and other stakeholders.
“The portfolio is very important. It clearly showcases the vision and strategy of the CIO regarding cost reduction and its results within the business,” Anderson says. “It moves the CIO and IT from speculating what the savings could be to demonstrating a foundation of real savings. In the end this vision matters to many stakeholders, including the CEO and the CFO.”