Put organisational performance at heart of the cost management agenda

With cost-reduction pressure biting more sharply than ever, how can you manage tighter budgets while still enabling ICT to drive business success? By Peter Clarke, Enterprise Director, eircom corporate markets

Some of this practice is prudent and necessary, particularly given the pressure on ICT department heads to deliver immediate returns to the business. But it's in the next phase of cost reduction where managers must be most cautious and take a broader view of organisational impact. As you consider your cost-reduction strategy, here are key points to consider:

Cut ICT fat, not muscle: The heavy ICT investments of previous decades have largely been superseded by a leaner approach, and over the past 12 months, ICT fat from this era has largely been removed.  Risk to business performance occurs when aggressive ICT cost reduction targets the "muscle" of ICT platforms - those investments which underpin the business systems such as staff expertise, hardware service maintenance and bandwidth - on the false understanding that low visibility equals low impact. Avoiding this mistake means prioritising spend against clear business value metrics, shifting the focus away from capital expenditure to operational expenditure, and adopting different ICT models like outsourcing of non-core services.

Your IP network has more to give: Few organisations that upgraded to IP as their network infrastructure have maximised the full power of the network to remove operational costs. While VoIP adoption is growing, IP networks are also used for a number of cost-saving initiatives such as visual communications, which can reduce travel expenses by around 30% and increase availability of scarce resources, or the centralisation of ICT to eliminate duplicated resources and applications in multiple sites. You can also reduce your utility bill by using the IP network to monitor energy use and detect anomalies, such as after-hours lighting. Training, too, can be delivered more cost-effectively by supplementing or replacing face-to-face courses with on-network training. These are just some of the many savings achievable via IP.

Measure ICT spend against value, not price: Taking the time to fully measure a supplier against clear business goals will pay dividends. For instance, an organisation choosing an ICT partner on per-minute prices or minimal maintenance contract may have ignored the business impact on, for example, reduced service levels or slower rollout of critical business services. Business decisions made around a single metric could prove costly in the longer run when further resources are required to deal with the impact on other areas of the business. The same is true of the choice between "new" versus "upgrade". For instance, a company which needs to improve its call handling might simply upgrade its current Interactive Voice Response ( IVR) system,  where callers press numbers on the phone pad to access a service. The other option, however, is to leverage new technologies such as Enhanced Voice Recognition ( EVR) to improve the overall quality of the call experience, which, in turn can impact customer satisfaction and loyalty. By measuring the return to the business over a longer period than 12 months, new technologies may in fact offer better value and enhance an organisations competitive advantage.

Your staff have more to give: Substantial cost can be removed from the organisation if you assess the value of staff time and how that time is spent. For example, if a highly skilled ICT team spends the lion's share of their time occupied with routine, low-level work that could usefully managed by outside partners, are you really optimising their value? The focus for any organisation should be retaining in-house effort, which delivers tangible business gain. In addition, Unified Communication and Collaboration technology can also cut costs by reducing dependency on face-to-face or telephone-centric communication, and can act as an enabler for people to become more productive.

Use ICT to improve competitiveness: Every organisation has nagging operational problems that impact their competitiveness, such as persistent delays in tending to customer complaints, excessive queues in retail or financial services, or unsatisfactory customer experiences due to unmanaged, unstructured call handling. With a focus on more centralised ICT systems, shared services models, a modernised customer contact system and effective use of on-line channels, many operational weaknesses can be effectively resolved, and without huge capital investment.
 
Businesses and industries today are transforming in the face of ongoing market challenges. Cost management, whilst essential to business transformation, is most effective where it puts the organisations performance at its heart and fully leverages the power of ICT.

To see how ICT solutions can address your cost-management challenges, please contact your eircom account manager

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