Tug-of-war - digital transformation and IT budget allocations

We have heard the same story for the past year — organizations of all sizes are experiencing a forced need to speed up digital transformation initiatives and deployments. One major, underlying concern to this acceleration? Budget.

Spearheaded by CIOs and tech teams, the long, strategic process used to require months, if not years, of planning and implementation. Leadership would carefully determine a budget, ensuring planned hardware, software subscriptions, and services would not strain the organization. Today, digital transformation has become a matter of survival. The focus has shifted from infrastructures powering internal daily operations and reducing calls to increasing efficiency and delivering a positive customer experience. This has encouraged organizations to move traditional IT budget allocations to digital initiatives…or has it?

In April 2020, analysts predicted a five-percent decline in IT budgets to occur in 2021. However, IT services have proven to be highly resilient, effectively managing the increased demands to deal with complex situations, such as a remote workforce or training delivery models. This agility has garnered the attention of executive leadership across organizations, easing the anticipated impact and reduction on their specific IT budgets. At the beginning of 2021, an IT spending report was released reflecting a six-percent increase. That's right, the opposite of what analysts anticipated. Though this outlook is better news than expected, it doesn't necessarily mean leadership will allocate budgets and spend money the same way they did pre-COVID-19.

It's important to keep in mind that IT services are not immune from scrutiny, and they will need to be re-examined in light of de-centralized IT functions. Leaders should be prepared to justify their IT spending, especially as the pressures from the pandemic continue to sustain their momentum.

Wondering where to begin? Below are a few suggestions and real-life scenarios.

Re-examine IT spend to optimize with vendors who offer scalable and sustainable pricing models

Consider conducting a cost analysis across all current and future vendors to understand the different pricing models and options. Though the task can be rather time-consuming, it can help organizations understand where the budget is currently being spent, where savings can occur, and what allocations should be anticipated in future planning. It's very likely that a vendor is using an outdated model, and due to the longevity of the contract, the model and services have been overlooked or pushed aside. Alternatively, organizations should remain on the lookout for the unexpected, such as receiving a surprise bill. With no predictability in an organization's IT spend, unexpected changes could potentially add additional costs.

Identifying a scalable solution can save thousands of dollars and impact a company internally and externally. For example, the City of Seattle recently consolidated its IT organizations across the city, which created a complex web of systems, tools, and processes to integrate. One of the city's biggest challenges was tracking all of its assets and ensuring they didn't get lost as a result of no clear accountability. They chose to integrate asset management into their IT service management tool which allows them to track the status and ownership/custodianship of each device and along with its warranty status and other lifecycle details. With these critical asset insights, the IT department offers increased transparency of IT costs and asset inventory standing to all of their stakeholders, including the citizens of Seattle.

While it is easier said than done, opt for vendors who offer easy-to-understand and predictive pricing models that scale to support your technicians and end-users — and business functions outside of IT, such as HR, Facilities, Legal and others. Consider it a bonus if the platform's extensibility allows your organization to expand its capabilities without incurring more costs.

Strategically align IT priorities to help justify investments in digital transformation efforts

With budgets top of mind this past year, every organization is looking for a way to do more with less. Take the time to conduct an audit of the technical debt created pre-COVID and during COVID. There are likely to be strategic, scalable, cost-saving solutions that can be implemented, such as automated workflows using a no-code platform. Don't only take inventory, rank each priority, such as risk, development efforts, and organizational impact — all of which can eventually lead an organization to create a data-driven plan that the entire company can support.

The rise of citizen developers and no-code platforms can help reduce costs AND accelerate digital transformation.

Consolidating different functions within your business will not only help supplement the IT team's time and business outcomes, but it may also help save applications and tasks on the chopping block while accelerating digital transformation initiatives. For example, the University of Missouri implemented a low-code platform to rapidly build mApps within days and weeks instead of months to serve various needs across the organization. They successfully implemented everything from tracking DNA sequencing requests from other universities and commercial entities to launching a mApp, enabling them to manage remote work requests and approvals from staff-the outcome? Flexibility, agility, and innovation — a win for all. 

As we move forward, IT leaders and executive teams should have a clear understanding of their budget spend and where there may be an opportunity for consolidation. Invest time in learning what tools have evolved, what vendor contracts entail, and if there is a potential intersection between current and future IT spend and digital transformation initiatives. This enables an organization to remain flexible and agile in the future while also providing an enhanced speed to digital maturity.

To learn how Ivanti solutions enable this next generation of service management solutions, check out our upcoming webinar "From Firefighting to Fire Prevention — Service Management for the Realities of 2021."