Value or Benefits Is the Leading IT Cost-Optimization Priority for CIOs

Value or Benefits Is the Leading IT Cost-Optimization Priority for CIOs
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IT cost optimization in most organizations is now largely focused on business optimization rather than cost cutting, according to a recent survey by Gartner. Survey respondents revealed that their top criterion for selecting cost optimization priorities is business value or benefits realization, rather than the biggest or fastest cost reductions.

The survey revealed that larger and more successful organizations plan to give the business greater budgetary control over the savings it achieves. This way, business controls how it spends these savings on digital solutions development. The largest and most successful organizations look beyond the quickest or biggest savings ideas to prioritize business value.

The survey found that the biggest gap between successful leaders and underperformers is in the three most difficult areas: limiting business demand, negotiating with the business and rationalizing application portfolios. The survey looked at how IT organizations' control over spending on IT and digital technologies has changed in recent years. It found that there are two-and-a-half times as many IT organizations gaining financial control than losing it. This bolsters Gartner's opinion that the most successful organizations are more likely to trust their IT organization to manage their IT and digital technology spending.

Respondents were also questioned about who manages the selection and approval of cost optimization ideas. Those with visibility of both the IT shared services budget and all digital spending across the organization reported that, on average, nearly half of their digital technology spending is paid for by the business. A quarter is paid for out of the IT budget, with chargeback to the business.