Reduce your technology costs the hard way

Photo by filmvanalledagA short time ago I was speaking to an IT director who was excited having come out of a conversation with his opposite number in Finance. The finance director wanted to dramatically simplify their internal financial mechanisms. The IT guy was excited because he saw that the complexity of the current mechanisms was directly reflected in the technology systems that he was responsible for, and a simplification of the business processes meant his life would become simpler.

I felt this was a good demonstration of an uncomfortable truth about technology costs, particularly systems that deliver to internal business needs. While many might like to reduce their technology costs by changing only the IT function internally, the reality is that the systems’ complexity (and hence cost) is only that way because those systems are helping automate complex business processes. Even if the bulk of the costs are people (which is often the case), those people are needed because the complexity of the systems constantly demands their time and attention.

Permissions, cost-centres, workflow, sign-off, reporting, overrides, exceptions, escalation, reconciliation, tracking, amending, auditing, messaging,… All these elements of a business process add to the cost and complexity of the technology.

The way to really reduce technology costs is to simplify the actual business processes they reflect. And that’s really hard, because it takes people out of their narrow departmental worlds, away from their immediate goals, and demands that they work co-operatively for the greater good. But when it can be achieved, as promised in the conversation above, the results are significant, and go way beyond technology concerns.