With the struggling global economy and soaring oil price, the corporations are challenged to improve the revenue and left with optimizing the current cost structure to sustain this financial environment. The corporations (in Financial services, Gas & Oil, Insurance & etc sectors) are looking for cost optimization, process efficiency, waste elimination and etc to minimize the current expenditure. Based on the industry, information technology (IT) budget plays a major role in the general & administration budget of the company. The IT executives have challenging job to minimize the IT G&A budget.
Enterprise Architects will play a pivotal role in assisting the CIO office to minimize the IT G&A budget. Assessing the current application portfolio and managing it efficiently to meet the IT G&A cost reduction targets are logical steps an enterprise architects would take. However, this logical steps are baby steps towards the G&A target. There are few transformational steps available, which will lead to achieve G&A targets immediately and going to make stepping stone towards the formation of business technology functional area and elimination of information technology (IT) in the corporate environment.
SaaS (software as a service) model is gaining momentum and it is being considered by lots of the corporation for the cost saving reasons. It is a transformational cost saving model proposed by the enterprise architect and IT strategist to the CIO . By implementing this model for enterprise systems like HRIS (PeopleSoft as a service) and etc will fetch immediate cost savings. By expanding the SaaS model within an organization will minimize the hard core IT function. The focus will turn more into the business enablement, business innovation enablement and contract/vendor/SLA management. The hard core IT function like managing a web environment, disk array configuration, infrastructure, network circuits management, SAP installation etc will ONLY be performed by the service providers. These functions will be done only by the core IT organization (like hosting provider, SAP provider, PeopleSoft provider etc).
In next 4-5 years, the majority of the organization will have a functional area called business technology (BT) and it will focus only in the following area.
- SLA/Contract Management
- Vendor Management
- Business innovation
- Business enablement
The IT and Business will merge and become one organization called business technology and there will not be a separate organization called Information Technology organization.