Organizations that have cracked IT cost optimization and innovation reap the rewards both financially and in terms of time to market, according to new research from SoftwareOne.
They are twice as likely as the rest of the pack to see an improved return on investment, researchers found. A third reported higher profitability, compared with 23% of other organizations, and 43% said they were seeing a faster time to market.
The researchers surveyed organizations in 12 countries and across six industry sectors in North and Latin America, Europe, the Middle East and the Asia-Pacific region.
They categorized survey respondents into three categories — Optimized Innovators, Aspiring Innovators and Initiating Innovators — based on their reported levels of progress in optimizing IT costs and building a modern IT foundation.
The study found that while 48% of executives at mid-sized companies lacked the budget or were unsure they had the budget to fund the next round of innovation, Optimized Innovators achieved significantly better results.
"Aligning the business benefits of innovation investments with opportunities to strategically optimize IT estates is critical to success," said Oliver Berchtold, president of software and cloud at SoftwareOne.
"Our study suggests that there is a clear opportunity for companies to optimize to innovate."
Top-performing enterprises have nailed IT cost optimization
Optimized Innovators shared seven best practices, the research found, being well ahead of other companies in installing a modern IT foundation for driving ongoing cost optimization and innovation.
Over the next two years, they plan to significantly outspend other companies on critical technologies, particularly in network security, automation, and cloud and SaaS management. They also prioritized data security and privacy, using nearly every available cybersecurity solution more often than others.
More than two-thirds said they'd made significant progress in building a cloud-based infrastructure, with more than half having moved their apps to the cloud and migrated core processes. A similar percentage have established governance, compliance, and security policies.
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Meanwhile, they are closing the AI gap and moving ahead with adoption strategies to automate processes, improve decision-making, internal processes and customer engagement.
This means they are nearly twice as likely as others to be at mid-or-advanced levels of implementation for internal purposes, as well as being considerably further ahead in customer engagement.
All in all, Optimized Innovators are ahead of their peers across nearly all areas of cost management, having made significant progress in monitoring and cutting operational, software licensing and IT infrastructure costs.
Optimization efforts will continue
This sharpened focus on IT optimization is expected to continue, according to SoftwareOne.
Over the next two years, the firm expects these high-flying enterprises to make the most progress in areas such as sustainability, while others will align FinOps with sustainability practices to optimize resource usage, reduce waste, and cut energy costs.
"Having defined innovation priorities that drive business outcomes, companies can have a more informed understanding of their IT landscape with an end-goal in mind. This includes analyzing software licenses, cloud environments and custom applications to identify areas for optimization," said Berchtold.
"This process will free up resources to invest where it matters most to the business, whether it be GenAI adoption, security solutions, or accelerated cloud transformation. Bringing these opportunities into reach serves as a catalyst for growth."
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