CIOs are exerting greater influence over approving digital business ideas to optimize costs: Gartner

The survey found that the biggest gap between successful leaders and underperformers is in the three most difficult areas: Limiting business demand, negotiating with the business and rationalizing application portfolios

CIOs are exerting greater influence over approving digital business ideas to optimize costs: Gartner

IT cost optimization in organizations is focused on enabling business optimization over cost cutting, according to a recent survey by Gartner.

 

According to Gartner analyst Stewart Buchanan, cost optimization has become a business-focused, continuous discipline that drives spending and cost reduction, while maximizing business value. 

 

"It's not enough to simply reduce IT spending; CIOs must reinvest in growth and transformation to deliver more value. Those who fail to engage in optimization risk having savings decisions imposed on them by an advisory organization with less understanding of IT or digital technology opportunities," said Buchanan.

 

The survey also reveals that larger and more successful organizations plan to give the business greater budgetary control over the savings it achieves. This way, business controls how it spends these savings on digital solutions development. These organizations do not consider complexity as a roadblock and look beyond the quickest or biggest savings ideas to prioritize business value. 

 

The survey found that the biggest gap between successful leaders and underperformers is in the three most difficult areas: limiting business demand, negotiating with the business and rationalizing application portfolios. 

 

The survey also revealed that IT organizations' control over spending on IT and digital technologies has transformed in recent years. It found that there are two-and-a-half times as many IT organizations gaining financial control than losing it. Most successful organizations are likely to trust their IT organization to manage their IT and digital technology spending. 

 

Those companies that have greater visibility of both the IT shared services budget and all digital spending, on average, nearly half of their digital technology spending is paid for by the business. A quarter is paid for out of the IT budget, with chargeback to the business. 

 

"Interestingly, CIOs who focus on digital business opportunities have greater responsibility for cost optimization than those who don't. This suggests that CIOs are starting to exert influence over selecting and approving digital business ideas to optimize business costs," noted Buchanan. 


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