FIVE CRITICAL LEVERS TO REDUCE COST AND COMPLEXITY
Here are five critical levers you can push to reduce cost and complexity while staying focused on high-value areas.
IT and business processes outsourcing contracts When reviewing ongoing and expiring contracts, ask yourself: Do we need these goods or services right now or can we pause for two to five months? Decide if the tools and services provided are vital to operations. Look at streamlining the features you’re paying for—for instance, if you plan to implement some features now and others later, can you pay for a feature only when it goes live? If the service is not critical to the business, ask for a three to six-month suspension. Benchmarking For contracts expiring over the next three to six months, take note of your exit clauses. Prior to renewal, ask for a discount or a best and final offer. Use benchmarking or contract health checks to identify the key levers that can help in a renegotiation.
Right-shoring : Ensure the right services are being delivered from the right location—maximize offshoring.
Right FTE skills : Right-skills are a key to optimizing costs; Assess and analyze the current FTE skills and future skill requirements. Unnecessarily over-skilled resources may not add value, but are more expensive
Staffing pyramid : The span of control within the delivery and support teams is frequently skewed towards senior roles. Optimizing this can lead to significant reduction in costs.
THE IT LEADER’S RECESSION PLAYBOOK I 2020 © WAVESTONE
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