How to reduce technology costs within enterprises - 28 Jun 2022
How can our business lower the cost of Enterprise Technology?
We think many organisations will have to really think they corporate technology strategy how they do business as at 2022. Enterprise technology departments or have to rethink the traditional approaches of contracting Consulting and permanent hires. In this discussion we propose outsourcing for components rather than in sourcing. At Info Rhino, we have decades of experience inside enterprises, and know when enterprise technology is done well. With cutbacks and economic uncertainty, we propose an alternative approach that will help to streamline technology operations. Contact Info Rhino at www.inforhino.co.uk/contact
If we do searches online on methods to reduce cost for technology departments within Enterprises, lots of articles on many websites covering approaches such as;
Outsourcing
Renegotiating licences
Automation and Artificial Intelligence
CRM and Enterprise software
Moving to the cloud
We note these articles rarely discuss reducing headcount which is the first thing large Enterprises do when trying to reduce costs. Enterprises seek to renegotiate contracts and contractors' pay, renegotiate terms with consultancies, and initiate redundancies where they can. Redundancies confirmed problematic because there are often laws to protect employees.
What is Enterprise Technology?
Established larger businesses with significant technology are known as enterprises in the technology world. Those in the Enterprise Technology space commonly think of Enterprise Architecture as having many evolved software platforms systems interconnected within a rich ecosystem of applications for their business users and customers.
The typical enterprise has a number of departments;
Infrastructure
Windows
Unix
Cloud
Security
Disaster Recovery
Storage
Application Management
Operations
Database Management/DBA
User Access Control
Role Based Access
Release Management (Commonly)
Operations
Batch Automation
Issue Resolution
1st Line Support
Calling 2nd Line Support
Software Development
Applications
Business Intelligence
Testing
DevOps
UAT
Business Analysis and Requirements Gathering
Project Office
Project Management
Licence Management
Training coordination
Outsourcing management
Cost Management
These are not exhaustive functions within a typical Enterprise Technology Department, but if this sounds like your business then you are in Enterprise Technology.
In addition to typical in-house enterprise software and enterprise architecture, there is a pressing need for integrating third-party solutions into the enterprise solutions architecture. Typically, enterprises require external expertise to on-board bespoke technologies into their businesses.
Alternatively Enterprises seek develop software for themselves, in house. the benefits of developing the software in-house is it fixed to specific business requirements. The company understands their own needs. The challenge with large enterprises is they often have internal processes that can stifle the fast implementation of their required solutions.
The main ways Enterprises achieve their business needs
Enterprises have only a few options to achieving their business needs through technology. We ourselves, sometimes think it is strange how technology has progressed so much in the last few decades and yet the same few routes to implementing requirements are used.
The permanent employee route
Permanent employees have a more dependable offering than other routes. they tend to to settle more and have your loyalty to their employer. they sacrifice a higher salary because they may get to do more interesting work they have external financial commitments which they don't want to risk.
The contractor route
Contractors tend to have a higher skill set and experience than permanent employees, but have greater domain knowledge of the organisation. This is not always the case, but our experience is that contractors offer a higher level of expertise than a a permanent employee. Employees tend to understand their employers business model better than most contractors can. Contractors tend to have been on more sites which means they have been exposed to more use of technology and they therefore offer a better solution for getting the job done.
Please note, none of these examples are universal. We have experienced many client assignments that completely changes our former opinion on contracting/permanent/consultancy. Please take this article in the spirit it was intended to be received.
The consultancy route
In many situations, having a consultancy offer a team of experts can prove beneficial to the organisation. They can act as a small department within the organisation and can bring in new resources in a managed way. Alternatively, individuals can be provided by a Consultancy. and assumed advantage of consultancies is that they can the consultant can interact with the consultancy to tap into additional knowledge and expertise when required. Consultancies can in many situations offer lower quality staff at fees similar to contractors of a higher expertise level. will seem consultancies work for our clients and have seen then perform poorly for clients.
The thousand foot view
Our experience of contracting within large enterprises is that there are generally, two main types of solutions they are looking to implement.
Business As Usual
Change the Business
Most solutions are created for the purpose of domain requirements - that is business needs. A lot of the technology resources goes on adapting technology and code to specific domain requirements of the organisation. This is very expensive time-consuming, requires a lot of testing and review to make sure it doesn't affect existing technology architecture. Importantly most enterprises create an internal budgetary system whereby why budgets are allocated to projects that are sponsored by the business. This weights most technology towards domain-based requirements, and this is no better reflected than with this move towards agile methodologies - which we don't think is an optimal approach.
Our experience is that enterprises actually want flexible dynamic solutions - yet see these as being a luxury. Remember, enterprises are constantly trying to meet internal business requirements.
The most successful software within Enterprises is from flexible dynamic applications that can be repurposed across the enterprise. Examples of where has been seen is in; data mapping, report generation workload automation, system maintenance, data processing.
Whether enterprises are using cloud based infrastructure or on premise, we think it is better for these companies to have independent providers develop solutions for them that they can then plug into their enterprise solution architecture.
Enterprises will have to streamline their operations with the upcoming global recession. Many companies are cutting headcount. Whilst contractor rates may drop, and consultancies may reduce their fees, both of these models don't necessarily deliver the best value for Enterprises. The reason for this is the requirement to set up contractors and consultants within the client corporate domain, procuring licenses and many other personnel based administration, that reduces the time spent developing solutions.
Your objective is to engage experts to build solutions which are relatively painless and can be absorbed into your existing technology architecture. There may be a need for some onsite work, but a lot of this can be undertaken remotely.
In many circumstances, the technology consultancy can avoid divulging sensitive business information by providing obfuscated data.
Thinking about reducing Enterprise Technology costs in today's world
Whether you are a; junior, mid-level, senior, team lead, associate director, executive director, managing director, roles such as yours at risk. The flipside is that anybody delivering value to the organisation will be in a position of strength. It may be more than just an writing some code, installing some software, running a build - it may be creating a basement conducting soon outsourcing companies and then going to your senior to recommend overseeing the implementation of this solution this will set your company apart from others.
We can look to previous recessions and previous downsizing efforts by companies as a predictor of how this will be attempted in future. There is a difference this time though. Companies will have to be leaner and at the same time deliver more output. Their customers expect more from their suppliers, and are themselves seeking to reduce costs. Many Enterprises have got burned by moving their operations overseas as a cost-cutting exercise. Outsourcing needs to be done in a more selective manner. Instead it would make sense to consider technology architecture to be more of a compartmentalised set of services where they can be developed and maintained externally, but absorbed into their internal architecture. We are already seeing this hybrid approach happening with enterprise combining cloud and on-premise technology.
So if you have ideas on how you think Info Rhino can help, take a look at our beta section and services to get an idea on what we do.
https://www.inforhino.co.uk/services
https://www.inforhino.co.uk/beta
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