Johannesburg, 21 Jul 2015
According to Gartner, the operating budget is split into three key elements.
Run - described as the day-to-day management and activities to sustain the business;
Growth - the capacity for business growth; and
Transform - service or product innovation that expands the business base.
The major problem in balancing these elements is apportioning the right amount of focus to them, in order to garner the most benefit and value back into the business, says Bruce Taylor, Chief Solutions & Marketing Officer, Dimension Data Middle East and Africa. CIOs are constantly challenged to focus more on the growth and transformation elements, as these bring the new revenue and business sustainability the market demands today.
Focusing on those elements means sacrificing either the focus or budget required to run the environment, so the cycle of pressure is perpetual and increasing in relevance. So, how does the CIO remain focused on growth and transformation, while still maintaining the environment?
The answer is, by embracing new consumption models of technology, where the service and the business outputs are the only deliverables.
Consumption models
Consumption-based models are fast becoming the preferred alternative to historical procurement engagements. The technology landscape is constantly evolving, with increased capacity, processing and virtualised environments adding pressure to organisations' ambitions of remaining or becoming relevant to their dynamic client sets. Added to the market pressure and focus on capital investment, the requirement or urgent need for alternative consumption models is fast becoming a prerequisite rather than an option for finance.
The "pay as you go" or "pay as you grow" concept has been developed to specifically address and empower organisations in this ambition. Organisations have embraced the power of the model as it gives them full enterprise capabilities without the burden and risk of capital investment.
Managed service alternative
Organisations that understand this consumption-based model are embracing the full power of the offering, without sacrificing their core strategy. Organisations can best achieve these benefits by leveraging off a managed service provider, with the relevant knowledge, skills, infrastructure and - more importantly - global coverage to ensure economic scale to the solution or consumption model. The security and efficiency gained in this service engagement has a direct impact on critical areas, traditionally polluted with "tech noise" and cost restrictions.
This streamlined, cost-effective and knowledge-rich model propels the organisation into the direct sweet spot of its dynamic purpose in the market, by forcing complete focus.
Cost vs cost of no service
Organisations that bemoan the cost of a service offering in this light run the risk of being late to respond to the growing trend in the market. When faced with this inside your organisation, rather ask:
"If the cost of the service is too high - how much is the cost of no service to the organisation?"
The reality is that the scale will never be balanced and the true cost of no service can have far-reaching and perpetual implications for any business, irrespective of sector, size and scale. Poor service, no service and or no open line will lose revenue, clients and market share - all of which will result in poor share price and minimised dividends or profit share.
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