Idea in Brief

The CIO of a multinational engineering firm was presented with what first appeared to be a straightforward problem. The CFO began a cost cutting initiative, and the CIO needed to reduce IT spending by 10% over the next several years.

However, the engineering firm also empowered its business units to navigate client challenges independently. But that creates challenges for IT.

Lines of business frequently purchased applications and programs independently in order to provide comprehensive and competitive solutions to clients. The varying needs and standards between projects would lead to duplicative application purchases across several lines of business. Finally, business units frequently turned over applications after a few years to IT for support, which led to IT constantly managing duplicative applications.

To address these challenges, we needed to solve two problems:

  • Short-term tactical cost takeout of the IT application portfolio
  • Long-term IT strategy to introduce better IT application governance

For the short term tactical cost takeout, we combed through the IT application landscape, identifying 10 quick wins, eight of which were viable candidates for rationalization.

For the longer term, we implemented a new IT application strategy through four steps:

  1. Standardize product & solution support (activities that keep the lights on)
  2. Standardize on a narrow set of strategic vendors, with a set of supportive business leaders, in their business domains
  3. Standardize governance, by building hybrid, co-owned business + IT centers of excellence, to enforce consistent processes & tools and to enable consistent project delivery
  4. Co-create digital business solutions for end clients, with IT as a trusted advisor to business units

Through their new IT strategy, the CIO could better manage the $150M+ IT application portfolio over the next four years.