Whether your organization is in healthcare, the SLED (State, Local, and Education) market or a different industry entirely, you’re almost certainly facing intense pressure to maximize your investments in existing platforms while prioritizing scalability, flexibility, and security.
The good news is that there are technology solutions that address common industry challenges. However, you must first strategically evaluate your organizational needs and capabilities in order to get the most from them. Here’s a look at what it takes to maximize existing tools’ value, leverage cloud resources, and balance costs with your business’ unique demands.
Evaluate the Capabilities of Your Existing Technology
It depends on the industry and business, but improving profit margins typically comes from efficiency gains across the organization, and often, a great place to start is within the IT organization. As such, the first step is reviewing your software portfolio and making better use of what you already own.
Evaluate your existing technology to see how you can optimize the resources you’ve previously invested in. If efficiencies are necessary, this step can help you avoid making major organizational decisions–like reducing your people. When you have to reduce budget to free up resources for innovation or enterprise transformation, it typically comes at the expense of people, software or in the worst case scenario “Keep the Lights On” (KTLO) Activities.
If you’ve managed your software well, you can transform your team’s jobs to be more effective in certain areas and keep them employed while cutting loose any solutions that are no longer necessary.
Understand & Undergo Application Portfolio Management
As you begin to take inventory of what you already have, you’re starting down the path of Application Portfolio Management. This is an essential piece of figuring out what you already have available to you. Enterprise architects and/or application leaders need to know what’s available to the organization and be informed on how to make use of the tools that are available.
I like correlating this process to inventorying your spice drawer at home. If you’re not diligent about monitoring what you have and how you’re using it, you might discover you have six bottles of cumin at any given time. You kept buying more because you didn’t realize you already had several bottles. You might’ve even purchased taco seasoning without realizing you had all the spices you needed to make it yourself with minimal effort.
It’s the same way with applications. If you’re not meticulous about inventorying your products, along with the different integrations and purposes they serve, you might end up with partially implemented software solutions with minimum business value extracted, and redundant software solutions– that consume valuable operating resources. This extends into underutilization of software licenses, too. For example, you may have purchased 1,000 Salesforce licenses, but you’re only using 800–so 200 are dormant. Making the upfront discount the software vendor offered if you purchased more software licenses then you needed to account for growth over the three year contract term can be a bad decision.
Because of the complexity of this, as well as the volume of technologies and factors, Application Portfolio Management must be a dedicated function. It must also be something that your organization invests in, along with Software Asset Management. But it is important to note that managing the lifecycle of software assets, ensuring compliance, cost optimization, and efficient license management is a SAM (Software Asset Management) function, and not part of Application Portfolio Management).
Leverage Cloud Resources
Cost containment can be difficult in certain industries, especially if you use cloud platforms like Azure, AWS or Oracle where the commits keep outpacing actual utilization. While such services are key, you also have to lay a strong foundation of IaC (Infrastructure as Code) and PaC (Policy as Code) to ensure your environment is secure and reliable. This can be expensive and require resources that are hard to find and hard to recruit. If you then spread your applications across multiple cloud platforms, the costs continue to multiply, even when using MultiCloud architectural principles.
If you focus on an outcome-driven technology selection process with long-term sustainability in mind, you may find that a platform solution like ServiceNow offers better outcomes at a fraction of the cost. To be clear I am not inferring that ServiceNow is an alternative to a hyperscaler, however when deciding whether or not to build cloud native applications to meet the business needs you should look at low code application development platforms or platforms that have prebuilt capabilities across multiple operational use cases, i.e. ServiceNow.
Analyze End-to-End Costs
CIOs and CTOs must consider the full spectrum of costs associated with building and maintaining cloud engineering platforms. This should include elements like infrastructure as code (IaC), policy as code, API management, and Code Scanning (SaaS, Dast, IasT), alongside the complexities of managing the entire DevSecOps environment of a modern application development platform.
Similarly, COOs and CFOs need to work with their IT teams to critically assess the entire software application lifecycle costs of SaaS solutions, homegrown cloud solutions, and multi-cloud infrastructures where applications are hosted. While capital expenditures may cover initial build costs, ongoing expenses—such as hiring skilled cloud infrastructure engineers, cloud application engineers, security and Site Reliability resources, —are often absorbed into operating budgets which significantly impact the financial flexibility of the organization long-term.
A comprehensive understanding of both development and operational costs is essential for effective financial planning and long-term sustainability.
In Summary
The steps outlined here are some of the core elements of evaluating and optimizing your IT investments–in other words, the DNA of doing business. If you’re unsure where to start, begin by meeting with your leadership team to create a plan to inventory your existing platforms, denoting the purpose of each one. This is called application rationalization, and it can be done as a one-off activity internally or by hiring a pro services company. Or, it can become part of an ongoing process supported by technology solutions like ServiceNow. Whichever path you choose, it must be done.
Key stakeholders can drive greater efficiency and value from existing tools by addressing concerns around flexibility, cost, and scalability. Informed decision-making and principled design approaches will ultimately enable long-term success in today’s complex technology landscape.