Tracking technology spend in a hybrid working world

The global lockdown measures brought on by the pandemic have put digital-first initiatives into the spotlight for businesses. As lockdown measures lift, businesses will now rely on IT to help progress the newly adopted hybrid working environment.

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Nathan Besh, Director, Product Management & Technical Evangelism, Apptio

Last year, global lockdown measures highlighted the importance of embracing technical change to enable flexibility within business. As operations were forced to move online seemingly overnight, companies were forced to adopt a tech-first approach to minimise disruption to their day-to-day activities.

With that initial hurdle passed, the loosening of lockdown measures means that business leaders are focused on supporting a new hybrid model of working for their employees – and it's going be IT's job to make sure that happens smoothly.

But the shift to hybrid working raises challenging questions for IT leaders. Now the panic to survive is over, do organisations still need to be paying all the new services they signed up for? How can you remove the costs you no longer need? And what unforeseen new costs and technologies will this new way of working require in the long-term?

The harsh truth is that many IT departments don't track and manage technology investments effectively. Now more than ever, IT leaders should be looking towards disciplines like Technology Business Management (TBM) which help them to implement lasting and meaningful change in the way their business runs by applying traditional financial practices to IT cost management.

With hybrid working here to stay, here are some ways IT leaders can better manage and optimise their IT investments in the short term and improving planning and resilience in the long-term.

Managing the cloud and SaaS hangover

As employees began to work from home in large numbers, businesses needed to accelerate the deployment of cloud and SaaS technologies to survive and maintain productivity outside of the office. The flexibility offered by cloud and SaaS allowed them to adapt quickly, while also better enabling collaboration and virtual working.

But now the aim should not just be to survive, but to thrive. In the long-term, a lack of proper investment management can result in overspending on services, especially those adopted quickly in a time of need. This is particularly important for cloud and SaaS as they're often costed based on usage – Gartner predicts that corporate spending on cloud services alone is expected to rise by almost 20% in 2021.

The constant variation in costs and usage are difficult to track effectively, and subsequently this makes it hard to quantify the value the tech is bringing to the business. This is a problem as a move to hybrid work means that organisations need to figure out if they should scale back or maintain certain services as workers return to the office.

Spreadsheets and manual analysis aren't good enough, so CIOs need to invest in tools which can process and analyse increased amounts of data coming from SaaS and cloud. These insights can help to optimise current costs and plan future investments by making any decisions data-led rather than reactionary.

Translating technology costs into business value

While technology plays a key role, it should be noted that implementing hybrid working solutions is not just a tech-focused decision – it has a wide range of residual impacts on other aspects of the business. IT Leaders must consider which investments are necessary for the whole organisation to benefit and maintain an edge against competitors.

For example, hybrid working can introduce a more diverse range of talent to the business due to the flexibility it offers. It can also allow for easier geographic expansion by enabling employees to work in more locations. These are factors that add to the value gained from investing more in hybrid working, but aren't normally considered in the technology investment planning process.

With this in mind, IT leaders need to ensure they can translate discussions around technology investments to other heads of business. Such communication requires clarity, which can come from governance processes like TBM that provide taxonomies and processes for aligning tech costs to wider business priorities, and TBM-based tools, which process the data from multiple sources across the business and turn it into actionable insights that are both more easily understood by those outside IT.

The domino effect

The way we work has faced mass and rapid change before. Events like the dot-com bubble and the global financial crisis forced businesses to reprioritise quickly to thrive, and this pandemic will not be the last time businesses are faced with such upheavals. However, the key difference brought on by this event is the emphasis on the role of tech, which has become the value creator that underpins all aspects of business.

So while hybrid working appears to be the 'new normal', it doesn't mean that IT leaders can fix that problem and rest on their laurels. They need to be able to anticipate trends in the long-term, especially those caused by the advent of hybrid working, making their business more resilient while simultaneously staying ahead of the competition who are slow to adapt to new trends.

Usage and consumption analysis is vital for this. Leaders will need to be able to understand where operations are thriving and falling and use these insights to alter investments early and develop long-term plans rather than waiting for events to catch up with them.

For example, one of the next areas of concern for IT leaders is agile development. It's a practice that meshes well with the decentralised nature of hybrid working and can help with business resilience due to its iterative nature. However, it's currently only being adopted on a small-scale due to several procedural and technical challenges. Innovative technology leaders will be proactively looking at what tools and approaches they can use to accelerate the adoption of agile to complement hybrid working, thereby strengthening their organisation in the long-term.

Many leaders have relied on technology to help transition to working from home as quickly as possible. But as the hybrid workforce continues to take shape, the investments that organisations are making now may not be sustainable in the long-term. It's imperative that IT leaders take action by using the right tools and disciplines like TBM to manage costs more efficiently both now and in the future.

Nathan Besh has worked in Cloud technologies for over a decade helping customers from startups to enterprises transform their business by adopting the cloud and associated technologies. He was one of the early pioneers in Cloud Financial Management, building systems at AWS to allow customers to gain insights into their cost and usage data, and provide solutions for commitment-based discounting. Working now at Apptio in product management and technical evangelism, he continues his passion of helping customers to solve the financial challenges of the cloud through best-in-class products and education.