Insight

Creating a more dynamic technology cost structure

In the wake of COVID-19, every information technology organization needs to assess cost structure and work toward optimization.

Chris Panneck

Chris Panneck

Managing Director, CIO Advisory, KPMG US

+1 214-840-6781

Denis Berry

Denis Berry

Principal, CIO Advisory Lead, KPMG US

+1 312-665-2866

Simplify, restructure and strengthen your IT operating model to better position your organization for the long haul

Many IT organizations take incremental actions to reduce their costs at the beginning of an economic downturn without fully understanding what the impact the downturn may have on the business. Common first-step cost reduction tactics can result in 10-15% technology-related savings, but care should be taken to not lose flexibility. Discounted software licensing or long-term agreements with service providers could tie up a significant portion of the IT budget.  

In the COVID-19 economic climate, the old playbook may no longer be relevant. Changes in the market are accelerating the digitization of businesses, creating greater demand for technology capabilities in the face of declining resources.

If your IT organization has already started reducing costs, and you are concerned about how it may limit your options, conduct a quick assessment of your cost structure to gauge your ability to respond to market changes. If you suspect your current cost structure is more rigid than you would like, there are actions you can take now to avoid draconian measures later. Learn more in this paper. 

Technology impacts of COVID-19
Creating a more dynamic technology cost structure in response to volatile markets