CIO Zone

Beat CIO pressure with technology expense management

Technology expense management can be used to create an accountability culture on all sides of the business landscape: vendor, management and user.
Read time 4min 40sec
Neil Buckley is MD of Apex BI.
Neil Buckley is MD of Apex BI.

It’s no secret that the role of IT in the enterprise has evolved from being the back-office provider of IT services and technology, to the forefront of technology services adoption.

Embracing new technologies is crucial to business growth through greater operational efficiency that promotes innovation, market differentiation and enhanced customer experience.

The achievement of all of the foregoing is further constrained by the need to stay within the confines of a budget that must be carefully allocated and measured, if it is to deliver real return on investment. The complexity of the issue of legacy can also compound these challenges. 

I’m sure you are familiar with the old “but this is just the way things have always been done” chestnut. The reality is that many of today’s ICT environments have been inherited rather than designed. Therefore, legacy thinking can arguably be concealing duplicate expenditure or unnecessary contracts. The really scary part is that these can run into the hundreds of thousands of rands and even millions, over months and years.

All of this can result in immense pressure being placed on the CIO’s office to deliver on accountability, since that department is responsible for the entire technology ecosystem – including the (crucial) management of costs, consumption, services and service providers.

Key performance – indicator or killer?

With accountability in mind, more and more companies are transferring the responsibility for this management to key stakeholders within the business, and in some organisations the responsibility is pushed as far as to the user base.

In many instances, deliverables and outputs in this regard are being directly linked to individual key performance indicators (KPIs).

On paper, this is a great way of creating accountability for costs, consumption and ultimately the way in which technology is deployed and utilised.

However, in reality, it is often ineffective and results in a massive administrative burden, onerous working conditions and a decline in morale because those “responsible” lack the tools to be effectively accountable for their respective technology environments.

What is accountability?

The Oxford Dictionary defines the noun ‘accountability’ as “the fact of being responsible for your decisions or actions and expected to explain them when you are asked”. However, if it is to apply in a business environment, it must inexorably be linked to KPIs.

Why? The answer is because KPIs are defined as the critical indicators of progress toward an intended result which, in the case of all business, is to increase profits and reduce unnecessary costs.

KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision-making and help focus attention on what matters most.

The bottom line is that TEM has become the only way for enterprises to effectively facilitate accountability across their ICT environments.

However, how can one be expected to take effective accountability for an inherited, highly-complex and ever-sprawling ICT environment without the appropriate tools to benchmark and measure accurately?

I don’t think anyone will argue that the ICT environment is getting more complex by the day. With the more general adoption of the Internet of things, the arrival of 5G and all the exciting opportunities that artificial intelligence brings, it appears that even greater difficulty is on the cards.

As complexity grows, so will the need for robust systems that can efficiently manage all of the moving parts.

360-degree view of business cost landscape

This is where technology expense management (TEM) software enters the scene. A good TEM platform has the ability to enhance stakeholder accountability significantly throughout the organisation at all levels, including management, individual user and across all vendor relationships.

The successful running of an efficient and accountable ICT department should mean full visibility and control with the requisite commercial compliance and granular internal cost allocation. Effective TEM can start to deliver on these.

If we use a business unit owner as an example, it would now be possible for that particular stakeholder to take full accountability for their technology environment. The individual would have detailed visibility into all vendor and user costs, consumption and services deployed within the business unit, all the way down to user level.

Furthermore, the person would have the ability to start analysing trends, understand peaks and troughs, gain insight into commercial compliance and provide far more accurate budgeting figures.

TEM platforms significantly enhance vendor accountability too because the customer now has detailed insight into all services and costs charged, and the ability to scrutinise finer details such as specific service type descriptions, invoice line items and whether provider invoice costs align with the signed contracts.

This level of visibility puts the customer in the driving seat.

The bottom line is that TEM has become the only way for enterprises to effectively facilitate accountability across their ICT environments.

Consider the more risky and costly alternative – the ostrich route of just plodding along with your head in the sand because that’s the way it has always been done.

On the other hand, you can use technology to solve a technology problem, enable cost benefits and put you in complete control of the company’s expenditure.

Neil Buckley
MD, Apex BI.

Buckley completed his studies in software support and PC engineering in 1999. He later went on to enhance his knowledge and skill through courses at the Harvard School of Business plus other institutions in the US. He has two decades of experience in an ICT career that has seen him appointed to senior management positions across various functional lines of business, including enterprise, SME, partner and retail channels. In 2007, he founded Apex BI. In the 12 years since inception, the company has attracted market share and has become a major player in the technology expense management sector. Apex BI is the only African company to be a member of the Enterprise Technology Management Association.

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