Services -> Outsourcing
Published: July 2010
IT managers that fail to embrace on-demand services will hold back the organisation they are supposed to be supporting. Such services can save costs within IT, as well as provide new capabilities to the business that have previously been unavailable or unaffordable. On-demand services also allow IT departments to focus more on managing information rather than fiddling with technology.
Spend analysis is a good example. Available at a cost that is far cheaper than attempting to develop a system in-house, on-demand spend analysis provides a business with rapid access to a high quality integrated repository of cleansed, categorised and enriched spend data collected from a wide range of internal and external data sources.
IT managers need to keep demonstrating how IT can help drive the business forward and underpin survival and growth, even in a tough economic climate. On-demand spend analytics is a quick and easy win with a potentially huge return on investment.
On-demand IT services enable IT departments to get on with the job of managing information without the need for major new investments in technology. In some areas, such as spend analytics, such services can have a huge impact on a key goal of an organisation in the austerity age-reducing top line costs. IT managers that take a lead and provide the business with spend visibility may be judged heroes rather than just the people that keep the lights on.
For any organisation, balancing the books requires both revenue generation and cost control
When money is tight it is cost control that becomes the imperative. For example, the UK government is looking to achieve 77% of its deficit reduction plan through reducing costs. Getting better visibility of how money is currently spent in the UK public sector will be critical to achieving this.
IT departments are often in the front line for cuts
The challenge for IT managers is to continue to innovate and demonstrate they are delivering continuing and new value to the business with little or no new money to invest. On-demand (cloud-based) services enable them to do this because they are paid for on a subscription or per-usage basis and require little upfront investment in infrastructure.
On-demand services make most sense for managing non-core tasks and processes
The majority of business processes are providing commodity services. These are often outsourced so that the focus can be on processes that provide an advantage over competitors. IT delivery is no different: by using on-demand IT services, IT managers can free up resources to focus on providing support for the activities that lie at the core of the business, for example supply chain in retail or compliance in pharmaceuticals.
Although IT is already at the core of most businesses, IT managers must not be complacent
There is a need to keep innovating and reminding those they serve of the value IT provides. On-demand spend analytics is an good example of how IT managers can achieve this using an on-demand service that can be demonstrated to pay for itself and to achieve results more quickly than in-house efforts.
Getting access to data in many of the required data sources is complicated
These sources usually include multiple ERP and accounting systems plus external feeds. Accessing each one requires specially written software, as most have proprietary interfaces and many are legacy systems, often inherited through the merger and acquisition of other businesses.
Achieving spend visibility requires extracting data from existing sources and then enhancing it
On-demand spend analysis involves the one-off and/or regular extraction, transform and loading (ETL) of spend data from existing internal and external data sources. It is then enhanced and integrated to provide a single high quality repository of spend data which can then be accessed with existing analysis and reporting tools that are already familiar to users, or a simple web-based interface.
Once spend visibility has been achieved the ROI can be fast and spectacular
Making a one-off 5% cut in a £1 million pound spending budget would release £50,000; more than enough to cover the cost of the initial set up and subscription to an on-demand spend analysis service. The on-going use of such a specialist service run by experts will change the way a company spends its money for good-as spend data is regularly and quickly transformed into business intelligence.
Those IT departments that think they can ignore the cloud revolution will be failing the organisation they serve. It is incumbent on them to provide value through embracing such services, and spend analytics is a great example of a quick win that can provide immediate and sustainable value to the business, especially in an age of austerity.
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Published by: IT Analysis Communications Ltd.
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