Cost Optimization vs. Cost Reduction
In today’s era of change and uncertainty, cost optimization is a key buzzword. However, the easier and more commonly taken route is cost reduction vs. cost optimization. Organizations approach cost reduction by working with legal and purchasing departments to obtain the best pricing and terms for all IT purchases, which includes working on simplifying and standardizing platforms, processes, as well as services to reduce cost.
Cost optimization does not involve cutting costs, but rather a continuous process of reducing waste and repurposing existing resources to create value; a feedback loop that continuously improves itself while effectively managing costs.
In today’s world, segregating between cost optimization and the value that technology delivers imposes a major risk to the business in our current environment. From COVID-19 that threatened public health, to international unrest, to challenges of climate challenge – businesses are struggling to remain flexible and maintain capacity to contribute to the economy. Industries that are affected by the global economy and require intensive labor are now left scrambling to survive, otherwise an evolution is bound to happen.
Building your business’s capability today to adapt to the new way of doing business is the essence of continuity and recovery. Your organization can leverage technology to achieve cost optimization and reduction while maintaining business continuity.
Data as Competitive Advantage
Be bold and assess the current environment, then apply innovation to designing, testing, and implementing a profitable business model. Designing and implementing long-term continuous improvement for your business enables a restructuring and adoption of continuous change. Establish comprehensive data-gathering processes in your organization, then repurpose data to create value and provide continuous analysis in addition to predictive scenarios where you can pivot and adjust your business performance. Flexibility and agility today are not only essential for survival, but also a competitive differentiator.
Extend IT cost reduction to the business
Decisions to save costs in technology are often siloed from business needs, which hinders progress towards tangible results. Understanding the impact of eliminating technology in business areas and aligning these decisions with long-term process improvement goals is necessary for effective cost optimization. This requires the business to assess relevance, evaluate task automation, and consider consolidation as well as implementation of shared services horizontally across the organization. In addition, leverage the business to set an efficiency and effectiveness baseline for automation. At Thynkli, we build a digital twin of organization, taking a holistic, non-disruptive view of your organization and understand, through data-driven insights, where operational efficiencies and cost savings exist. Using our technology and approach, we streamline and establish repeatable, automated processes that ensure your organization maintains governance and regulatory compliance while also creating toolkits to empower process improvement. Contact us today to learn how we can help you on your digital cost optimization journey.
To discover more about the Thynkli process see HERE.