Optimizing IT costs and infrastructure in the digital age

CIOs in today’s digital economy are confronted with a daunting challenge ― how to invest in new technologies such as the Internet of Things (IoT), blockchain, analytics, and robotic process automation to improve competitiveness, while simultaneously getting improved returns and performance from their legacy infrastructure.

Most companies are simply not in a position to add more funding to support new growth-oriented initiatives on top of their outdated and disjointed IT infrastructure. Even if they could, glitzy front-end mobile, web, or omnichannel interfaces and applications without optimal back-end systems and processes would run the risk of delivering limited user experience or business benefits. 

To get their businesses on to a fitness regimen, companies must conduct a health check on their existing inventory, identifying systems that are lagging in term of performance, cost and quality, and determining their impact on enterprise workflows. Such a check-up could potentially reveal significant accumulation of technology debt resulting from:

• Massive, unstructured IT applications: This is largely a mix of both legacy and modern IT infrastructure, often facing unsupported wares, redundancies, and dead code. 
  • Heterogeneous, expensive technology architectures: These result from numerous mergers and acquisitions over the years, leading to complex architecture rules and cumbersome governance layers that are difficult to overcome.
    • Duplicate, legacy infrastructure: Distributed, heterogeneous networks and data centers are hard to manage and prevent an organisation from becoming truly agile. 
      • Process inefficiencies, complex workflows: Disjointed processes and operating models impede the ability to drive efficient end-to-end workflow to deliver the best possible user/customer experience.

This was exactly why the CIO of a France-headquartered manufacturing multinational launched a comprehensive IT fitness assessment of the company’s operations. Investigations revealed significant potential to save costs and improve business performance by attacking a set of error generating, paper-based, non-optimal processes. For example, the sales teams were spending more time in fixing data problems instead of cultivating new clients, while the finance function was focused more heavily on day-to-day firefighting than on long-term forecasting. The value proposition for automating and harmonising these processes was strong ― as much as 65% of the IT running costs could be eliminated. 

The roadmap to achieve these savings included consolidating back-office ERP from a four-tier to a two-tier solution, decommissioning multiple custom applications, applying intelligent process automation to replace manual ad-hoc processes, and creating a common corporate data warehouse to improve business analysis and forecasting.

By following best practices in inventory management, fusing front and back office processes, optimising license costs, identifying further automation opportunities, and imbibing a continuous improvement mentality, digital-era CIOs can get their businesses in shape to compete against the emerging threat of digital-native companies. Much like getting oneself in shape, getting fit for the journey of digital transformation is about making a sustained effort at right-sizing and modernising legacy environments.

R. Rajesh Balaji

Guest Author Rajesh Balaji is Senior Vice President and Global Delivery Head of Cognizant’s Enterprise Application Services (EAS) practice, focused on helping clients across industries reimagine their enterprise processes such as Human Capital Management, ERP, Supply Chain, Customer Experience and Integration, leveraging Cloud and on-premise platforms such as Salesforce, SAP, Oracle, Pega and others. At Cognizant, he has played multiple roles across horizontals, ranging from strategy and consulting, to execution.