It has become a necessity for enterprises to stay digitally updated to stay competitive in the market. As companies rely more on technology, IT has become the major focus of investment for companies more than ever before.
It is estimated that overall IT spending is 7.5% of the revenue. Organizations in America are allocating approximately 8.5% of their revenue to IT as compared to those in Europe where this allocation is 6%. The figure below shows the breakdown of IT spending as a percentage of revenue by industry.
With the humongous budgets, organizations’ focus is now shifting to optimizing the costs. To put it in simpler terms, IT leaders are now focusing on cutting costs, which we all know is a tricky process.
With this paradigm technological shift, 80% of companies have embraced digitization with a vision of transforming their businesses. However, only 16% of the larger organisations believe that they have the right people to get the job done, and only 13% of the organizations quote that they have the right processes in place.
This concludes that despite having a robust information system and talent in place, most organizations still doubt that they can compete with digital pioneers. This leaves an impression on CEOs that the IT department is costly. To ensure the optimal value add, the CIOs keep searching for new ideas to eliminate waste and reduce overall expenditures, which are easier said than done.
Having said that, there are some proven strategies that can lead to IT cost reduction.
