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Briefing: The ‘variabilisation of IT’ towards greater efficiencies

Tao Ai Lei | April 2, 2013
The next big thing in IT is the use of the right level of technology resources that the task requires, which will allow companies to enjoy increased business agility and massive cost savings.

The next big thing in IT is the use of the right level of technology resources that the task requires, which will allow companies to enjoy increased business agility and massive cost savings.

Achuthan Nair
Photo: Achuthan Nair

The concept of turning the fixed costs of running a business into variable costs is gaining steam as organisations turn to the variabilisation of technology to help find and retain customers, reduce IT costs and risks, improve business insights while saving on time, said Achuthan Nair, senior vice president & business head of Global Infrastructure Services, Wipro.

He was speaking at a breakfast briefing at the CIO Conference 2013 to a roomful of senior IT executives.

Nair opined that adopting an Ultra-Low-Cost Product Development (ULCPD) strategy is more than just about lowering component costs, but is about delivering high quality, innovative products in aggressively short timeframes.

Three dominant trends
Nair identified some significant IT trends that have led to organisations turning to the variabilisation of technology. The first trend is standardisation.

"CIOs drive standardisation across the enterprise, as they try to adhere to standards, which are predictable and help us manage better," said Nair.

He explained how in this era, IT companies tend to adopt a standardised, or one size fits all approach that is similar to how manufacturers would produce goods without customisation for consumer needs. Companies had in turn given in to these specifications irrespective of their own requirements, resulting in huge capital expenses with limited flexibility.

The second trend is customisation, where solutions are tailored for different requirements. Since the standardisation era provided limited flexibility, IT companies upgraded to provide customised solutions specific to the requirements of the clients. This is also seen in the "BYOD [Bring Your Own Device] or standardise the end user point" trend where CIOs allow employees the freedom to choose the devices they prefer to use.

These solutions with significant flexibility came along with high IT capital investments, and implied that the organisations are bounded to the IT investment at all business cycles. The trends of standardisation and customisation has now led to the third trend of variabilisation. The global economy following the collapse of Lehman Brothers had put pressure on organisations to do things differently.

"CIO are no longer provider of IT services, but now have new priorities beyond IT, which have more business relevance... IT is no longer a sunk cost but is now more strategically aligned, and is expected to mirror the pace of business," said Nair. CIOs' new priorities include increasing enterprise growth; reducing enterprise costs; consolidating, standardising and streamlining operations; and improving efficiency.

 

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