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Top 5 Strategies to shift budgets from maintenance to innovation

May 17, 2018 - Vani Vangala Product Business Manager, Finacle digital banking portfolio, Infosys Finacle

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On average 65 to 70% of a bank’s IT budget is spent on keeping the lights on, in IT maintenance tasks.
IT budget for innovation led activities is often limited to 10 to 20% of a bank’s budget – perhaps even lower % if the planning horizon of the organization is short term!
Here are my top 5 strategies for shifting budgets from maintenance to innovation –

Understanding the cost base in detail

While not a strategy in the truest sense, understanding what is software maintenance and how much it costs – arming oneself with the right information on current IT maintenance spend is an important step. Typically, software maintenance spend is categorized into Bug fixes (largely reactive), Changes to improve performance or usability, Small sets of Enhancements, and On-going Preventive maintenance.
Most organizations still use the omni-present spreadsheets to tabulate their IT maintenance budgets and actual expenses. Using a technical business management solution like the one from Apptio allows CIOs to understand the cost base at a granular level and allows for a data driven approach to planning IT maintenance budgets.
Proofpoint – Look at how understanding the cost base helped XXYY

Usage of cloud based infrastructure and open source tooling

Many organisations still depend extensively on on-premise installs of software and hardware. Likewise many organisations still use prohibitively expensive, licensed software.
Moving applications from on-premise to a private cloud deployment and similarly from licensed software to open source software options will free up a significant chunk of the IT budget.
Hence this is a critical strategy to formulate and execute!

Sensor based assistance to the human workforce

Analysing processes, typically unearths various repetitive and effort intensive manual tasks within the IT organization.
Using sensors to provide automated inputs, deploying software robots to automate these processes and using human skills to deal with only exceptions in these processes are ways to improve productivity of the human workforce – it also frees up the workforce to focus on more complex tasks.
And so this is another critical strategy to formulate and execute!

Automating IT Operations

Monitoring of IT Operations is another manual effort intensive area in many organisations.
Automating the monitoring of IT operations as well as diagnostics and prognostics using AI based technologies will enhance productivity of existing FTEs as well as free up some FTEs over a period of time to undertake other higher order tasks.
Business processes, typically consist of various repetitive and effort intensive manual tasks within the IT organization. Deploying bots to deal with this is an excellent way to free up parts of the workforce and improve productivity of existing FTEs.
Ergo this too is a critical strategy to formulate and execute!

At the absolute top of the list is shifting the staffing mix in IT organisations

If one looks at the staffing of an IT organization, on average 80% of the staff would be for helpdesk and application centric roles and only about 20% would be focused on strategy, architecture, and other specialized IT roles.
These ratios need to be inverted such that the organization internally is optimized and lean. And ensuring key specialized roles are well staffed, also increases the focus on longer range planning horizon instead of fighting fires all year long!

Vani Vangala

Product Business Manager, Finacle digital banking portfolio, Infosys Finacle

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