CIO

Cost Reductions and IT Directing

Reducing costs rather than generating benefits for the business sounds like no fun – and it isn’t. Yet 52% of IT directors are engaged primarily in this activity according to MooD International. Are transaction-based service level agreements (SLAs) to blame? Dan Raywood for IT Pro Portal has this to say:

Seventy-six per cent of respondents said that their internal clients’ expectations are not aligned with what the outsourcing suppliers perceive they are contracted to deliver.

Two-Dimensional Management Performance

MooD CEO George Davies believes that SLAs in their current state are not quite useful enough, calling it “two-dimensional management of performance.” Davies would add a third dimension, that of business impact and outcomes:

“Automation and digitisation should be the driving force behind activity and transformation as they will improve processes, drive out cost and importantly, accelerate innovation and line-of-sight to business value.”

Conflicting Forces

IT directors must contend with conflicting forces – those of suppliers who must make a profit, and that of internal customers who are driven to find value and innovation in transactions with vendors. The magic of outsourcing must be tempered by the reality that if benefits are not communicated properly, then gaps in resource use are created and wasteful spending ensues. Davies says:

“…There needs to be a common view which joins up all the parts of the supply chain and can identify gaps – and resource-wasting overlaps – ensuring there is transparency across the business and not inefficient silos.”

The growing complexity of the position leaves many IT directors (57%) less satisfied with their jobs. Simply put, the more specialist suppliers that are brought on board, the more difficult service integration becomes.

Read the original article at: http://www.itproportal.com/2015/04/27/it-directors-ignoring-business-benefits-favour-cost-reduction/

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