CIOs and IT departments need a new cost emphasis beyond slashing their own costs.
Put your own house in order before you start giving advice to others is a popular idiom. And CIOs have been doing that for years, incrementally cutting costs in IT functions. But what if the mandate from your CEO is for IT to help improve the performance of another department such as finance and accounting (F&A), for instance, but at the same time cut F&A costs by 60 percent? How can IT help that department?
We at Everest Group are assisting in a strategic plan for a client’s IT organization, and the cost reduction effort for that F&A department is part of the plan. The IT plan is part of a company revitalization, and the CFO recognizes their finance and accounting function is too large. She needs to dramatically improve reporting and analytics functions — but do so with 60 percent fewer resources. Sure, they can move some work offshore to get lower unit costs. And that’s good. But it won’t achieve operating the F&A function with 60 percent fewer people. The only way the CFO can possibly do this is through the judicious use of technology to enable digitizing the workforce, stop doing some functions and implement new tech-enabled functions.