A common problem affecting a number of industries is where business performance is crippled by a lack of IT cost efficiency and high inflation. This is after firms have emerged from the pandemic, leading to several years of a disrupted digital strategy.
An IT company called Crayon has released data regarding IT cost optimisation, based on a survey of some 2,000 IT professionals. These results reveal that despite 98 percent of Chief Finance Officers anticipating operating costs to continue to rise, only 7% percent of businesses have optimised their IT costs. This relates to a Deloitte survey.
The rates vary globally. In the case of the UK, as little as 3 percent of IT leaders believe their technology expenditure is as lean as it could be, exposing businesses to potential operations cost leaks. This is despite 92 percent of UK based leaders listing optimisation of cost structure as a high priority for their business.
One of the barriers is due to costs, among other barriers. This is borne out from the finding that 94 percent in the UK and 80 percent globally state that their organisations would benefit from help breaking down costs and identifying areas for optimisation.
Cost breakdown also runs into funding issues. Over half (54 percent) of global IT decision-makers see IT cost optimisation as their biggest business challenge.
In terms of other barriers to implementation, in the UK, a third (32 percent) of technology leaders flagged they lack knowledge on how to optimise their cloud spending. In addition, another third (34 percent) indicated that they do not have the time to search for the best deals.
Commenting on the findings, Melissa Mulholland, Chief Executive Officer at Crayon says in a communication to Digital Journal: “Throughout the pandemic, we saw many businesses become digital without much of a clear strategy to accommodate the rise of a remote workforce during lockdowns and restrictions.”
Mulholland adds: “Two years later, IT departments have less visibility of their IT stack across their hybrid workforce. This means cost-saving opportunities are not being capitalised on when expenses are rising and we’re seeing more inflation pressures on the market. This perfect storm affects leaders’ ability to deliver business growth.”
One of the issues facing firms related to inflation. Yet IT spending will also continue to increase. According to Gartner, IT spend will reach more than $4.4 trillion by the end of this year, representing 4 percent growth.
However, what is happening is that spending is more circumspect and aimed at being more efficient, such as opting for cloud spend management tools and AI technologies.
