SoftwareOne has released its new research “Driving Business Outcomes through Cost-Optimised Innovation”. There is a significant opportunity for companies of all sizes but in particular for those with revenue between $500 million and $5 billion, to optimise their IT costs and surge ahead in innovation. The research shows that companies leading the way in IT cost optimisation and innovation are twice as likely as others to see an improved return on investment (50% vs 26%), report higher profitability (35% vs 23%), and faster time to market (43% vs 26%).
The new SoftwareOne study, conducted by an independent global research firm, investigates IT cost management and innovation best practices for mid-market companies. The research surveyed organisations in 12 countries and across six industry sectors in North and Latin America, Europe and the Middle East, and the Asia-Pacific region. Survey respondents were classified into three categories — Optimised Innovators, Aspiring Innovators, and Initiating Innovators — based on their reported levels of progress in optimising IT costs and building a modern IT foundation.
While 48% of executives at mid-sized companies lack the budget or are unsure they have the budget to fund the next round of innovation, Optimised Innovators apply seven best practices to achieve results:
- Building a modern IT platform. Optimised Innovators are well ahead of other companies in installing a modern IT foundation for driving ongoing cost optimisation and innovation.
- Investing in key digital initiatives. Over the next two years, Optimised Innovators plan to significantly outspend other companies on critical technologies. The gaps were most evident for spending in network security, automation, and cloud and SaaS management.
- Prioritising data security and privacy. Optimised Innovators use nearly every cybersecurity solution more often than others.
- Building a cloud-based infrastructure. More than two-thirds have made significant progress in building a cloud-based infrastructure, and more than half have moved their apps to the cloud and migrated core processes. A similar percentage have established governance, compliance, and security policies. Over the next two years they plan to have 70% of their software applications and workloads in the cloud, as well as 56% of their custom applications.
- Closing the AI gap and moving ahead with adoption strategies to automate processes, improve decision-making, internal processes and customer engagement. 84% are at mid- or advanced levels of using AI for internal processes and 71% for customer engagement.
- Developing a GenAI first-mover advantage. Optimised Innovators are nearly twice as likely as others to be at mid- or advanced implementation of GenAI for internal purposes and are considerably further ahead for customer engagement.
- Mastering the practice of IT cost management. Optimised Innovators are ahead of their peers across nearly all areas of cost management, having made significant progress in monitoring and cutting operational, software licensing, and IT infrastructure costs. Over the next two years, Optimised Innovators expect to make the most progress in sustainability, aligning FinOps with sustainability practices to optimise resource usage, reduce waste, and cut energy costs.
“Aligning the business benefits of innovation investments with opportunities to strategically optimise IT estates is critical to success. Our study suggests that there is a clear opportunity for companies to optimise to innovate,” said Oliver Berchtold, President of Software and Cloud at SoftwareOne. “Having defined innovation priorities that drive business outcomes, companies can have a more informed understanding of their IT landscape with an end-goal in mind. This includes analysing software licenses, cloud environments and custom applications to identify areas for optimisation. This process will free up resources to invest where it matters most to the business, whether it be GenAI adoption, security solutions, or accelerated cloud transformation. Bringing these opportunities into reach serves as a catalyst for growth.”
