Cost Optimization Top of Mind for CIOs in 2023

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Read more about author Becky Trevino.

The last three years have been a rollercoaster for CIOs. Leading expansive digital transformation in 2020 so organizations could stay afloat during the pandemic, CIOs now face tough questions around budgets, SaaS sprawl, and security in 2023. The current focus on cost optimization by the C-suite reflects not only the current economic situation but also the explosion of SaaS and increased complexity in managing bloated tech stacks, inducing higher compliance risk.

The 2023 IT Priorities Report polled more than 800 IT leaders across the globe to assess the priorities and challenges IT leaders face as they navigate a potentially volatile 2023. For CIOs struggling to understand the growing complexity of their SaaS and cloud investments, after years of indiscriminate spending, visibility is the new priority to take a more thoughtful approach to IT spend.

Planning and Executive Buy-In Are Key to Juggling Competing Priorities 

Innovation is always top of mind for IT leaders, and this year is no different, with 94% of IT leaders stating innovation is a top priority for decision-makers going into 2023. However, delivering on innovation is a direct contradiction to the biggest concern for leaders right now, which is reducing IT costs. This pressure is compounded by continued organizational demands to innovate faster and demonstrate ROI on new investments, another way in which IT leadership roles continue to evolve. Maintaining this balancing act will take careful consideration but can be managed with dedication and planning.

Setting priorities seems like a simple enough task, but the three top priorities for IT leaders in 2023 are fundamentally incompatible. For 28% of survey respondents, reducing security risks was paramount. Meanwhile, delivering digital transformation and adopting new technology to improve day-to-day operations were tied for third place as top priorities. How do you reduce spending, the overwhelming priority for decision-makers, when cybersecurity, digital transformation, and new tech all have associated costs?

Now more than ever, IT leaders need to collaborate closely with business leaders to ensure their priorities align with the organization’s overarching goals. As IT leaders navigate 2023 and juggle these competing priorities, executive buy-in is paramount to manage expectations and get the support they need to move initiatives forward. 

Holistic IT Visibility Can Transform Your Decision-Making Process

A key component to getting a handle on IT spending is visibility. As noted in the report, 76% of survey respondents say business units are procuring far more cloud and SaaS than IT knows about. By gaining complete visibility across your organization’s tech stack, preferably with a tool that can provide insight across hardware, software, licensing, SaaS, and cloud, IT leaders can gain the insight needed to manage all these aspects of IT. With business units sourcing their own solutions independent of IT oversight, the bloat of IT expenditure can continue unchecked if there is no IT asset management tool in place.

The importance of cross-collaboration between business units is also integral to managing these expenditures. Removing barriers for employees to access IT tools, such as establishing software and SaaS portals, can be more transformational than it would appear on paper. Establishing a FinOps practice can also be a valuable exercise, by uniting IT and finance with a common goal of managing their cloud costs.

Decisions Are Only as Good as Your Data 

Every organization has access to data, but being able to make sense of the numbers and apply them appropriately is the differentiator in an increasingly unpredictable world. Eighty-nine percent of IT leaders surveyed stated IT must invest in tools and technologies to extract value from their data and turn it into actionable intelligence.

This starts with gaining visibility into the blind spots of IT infrastructure, to ensure data is being pulled from the entirety of your organization’s tech landscape. A tool to provide visibility combined with actionable insight based on accurate data is the kind of innovation businesses can rely on. As we see costs rise across cloud and SaaS, metrics on usage and licensing are a potential new frontier for cost savings.

Another area of improvement, according to reporting from the IT Priorities Report, is integrating data across the entire organization. This has been a facet of enabling digital transformation that has seen a small but steady rise in importance since 2020. Understanding the data running through your tech stack will also help other departments make better decisions, and in turn, will help with relationship-building and collaboration efforts across the business.

As I stated in my DATAVERSITY article last April, CIOs are valued members of the C-suite who are now being given even more avenues of professional growth and opportunity coming out of the pandemic. We will see these opportunities grow in scope as we see the effects of new technologies like ChatGPT offer new avenues for innovation and disruption. 

The building blocks of maintaining priorities will be crucial in the months ahead as we see the kind of transformational change that can only happen during a time of economic pressure. IT leaders, who are now more integrated into business operations than ever, need to think holistically about their approach to managing the competing interests of spend and innovation in order to not only survive but thrive in the coming days.