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Cost Optimization in an IT Business

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Vani Gopalan, IT Director, Flowserve Corporation

Holding a PG Diploma in IT from Symbiosis Centre of Distance Learning and having completed her Executive MBA in Digital Transformation from IIM Indore, Vani is a seasoned business professional with close to two decades of experience in the IT space. Some of her key areas of expertise include Governance, Operations, Transformation, Product Management, and more.

In a recent conversation with Keerthana H K(Correspondent, CIO Insider), Vani shared her insights on various aspects surrounding the current IT landscape. Below are the excerpts from the exclusive interview –


What are some of the metrics or KPIs to measure the ROI of IT initiatives?
As an IT industry leader, I strongly believe that measuring ROI is not a one-time activity. Also, every IT organization cannot have the same metrics the ROI of their IT investments, as it varies according to the stage of their journey – be it in terms of IT, business or digital transformation. Some of the metrics that we follow are reduction in operational costs, productivity boost, sustainable business growth, data security, and most importantly, organizational culture. These are some of the most critical parameters for any IT business. Measuring these aspects periodically will enable the organization to have a clear understanding of their current positioning in the market.

How would you advice IT companies to approach cost optimization while being aligned with core business objectives?
Cost optimization is not about reducing resources or laying-off people; in my opinion, it is a mindset. Since successful cost optimization requires a significant shift in mindset itself, organizations need to shift focus towards ways in which they can make the change in ongoing activities. There are various aspects to keep in mind when we think about cost optimization – major ones being the organizational buy-in, the value that this cost optimization can provide to the business, and many others. Given that companies are always prone to change, the ways in which they keep-up with the rate of change and implementing financial best-practices play a crucial role in having control over the costs.

Some of the key areas that all IT leaders must focus on in terms of cost optimization are the projects that they are investing in, whether they are right investments, ways in which those investments are being done, documenting & reporting financial transparency and many more. Also, when you’re engaging in a project, you are involving numerous vendor partners. You need to do a careful analysis of whether it is really necessary to have multiple

partners or if it can be grouped together and given to one single individual/entity. Additionally, IT leaders must ensure to have periodic evaluations of various IT processes and be always on the look-out to learn about new industry-best practices from their fellow industry peers. Lastly, IT leaders must communicate with their team members (all levels) and make them have a clear understanding about cost optimization so that they are not fearful of it.

How should business leaders stay updated with changing industry trends and emerging technologies?
Networking is critical for every business leader to stay updated with the latest happening in their industry and get familiarized with the best practices globally. This also enables them to not waste their by reinventing the wheel, as the solution or technology that they are looking might already exist somewhere, that can be tailored to your needs. Also, the only thing that is constant in today’s business world is change; so, if we don’t keep ourselves up-to-date with the latest market changes, we lose our competitive edge in the market and might even cease to exist. Thus, I make sure to attend at least two conferences each month, wherein I get to meet & interact with a lot of tech leaders from diverse verticals. Additionally, I also participate in my own newsletters and sharing my own perspective on LinkedIn has also helped me immensely in staying relevant to changing industry dynamics.

Successful cost optimization requires a significant shift in mindset itself, organizations need to shift focus towards ways in which they can make the change in ongoing activities.

What strategies should the IT COEs and offshore teams implement to remain adaptable and responsive to changing market dynamics?
For an offshore organization, it is important to ensure that the teams are communicated about every happening the company. Also, there is something I call the 3E formula – Engage, Empower, and Empathy. I consider these as very powerful tools when we it comes to making sure that your COE or offshore teams to remain adaptable. Keeping barriers such as time zone challenges, cultural differences, and geographical differences in mind and staying aware of the happenings across geographies for every company. Additionally, it is paramount for business leaders to maintain a clear and transparent line of communication across the entire organization, which I personally feel is at the core of making sure that every employee of the company is adaptable to the changes and adding value to the business. Lastly, companies can also introduce a change/transformation team within the organization.

Throw some light on a few effective methodologies and frameworks to streamline IT COE processes with business goals.
Planning the implementation of your Center of Excellence isn’t a small task. Since there is organizational change involved, there are many aspects that need to be considered. Fortunately, you can take an incremental approach to implementing your CoE.

Although there are numerous models and methodologies that every organization uses to manage its COEs. I believe the model always revolves around 3 important pillars 1. People 2. Process & Technology. Further-more based on various critical factors such as workforce requirements, necessary skill-sets, cost, and many others, you can select the model that is best suited to manage your COE. Also, since most of COEs are formed for cost optimization especially in terms of workforce costs, it is very much important to keep in mind the sentiments of people from former locations. As you innovate more and build the center further, it becomes very challenging to streamline all the functions. However, to overcome these hassles, you need to have your success mandates and responsibility & accountability metrics written down properly. Deploying and evolving a CoE enables organizations to improve application quality and performance in an organized way, at its own pace, while simultaneously cutting costs. It provides greater visibility into the application lifecycle and provides metrics for improving quality and performance in a rigorous, consistent, procedural way. This model certainly offers a compelling new alternative for skill development and career advancement for the people.

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