BlogCloud Services Require New Approaches To Expense Management

Cloud Services Require New Approaches To Expense Management

October 10, 2019, Communications Lifecycle Management, Expense Management, Financial Management, Usage Management, Wireless Expense Management

With the adoption of cloud services, organizations must be ready to embrace a substantial paradigm shift in how they organize and manage their Technology Expense Management programs. This requires IT to assume leadership responsibilities that go beyond traditional telecommunication services as their infrastructure becomes more dynamic and enabled by multi-facet inter-dependent cloud-based services and virtualized networks. IT leaders must recognize that organizations will continue to operate in a hybrid technology environment, relying on a combination of both premise-based and cloud-based goods and services to support their business requirements. In this blog, we will provide the foundation to help IT leaders understand the value of implementing a holistic expense management program that encompasses the management of all aspects of premise equipment, deployed mobile devices and cloud-based services.

IT Leaders Need To Transform Into Strategic Enablers

The effective adoption of cloud has the potential to improve productivity across the entire IT organization. This becomes more evident as resources transition from procuring and maintaining elements of core infrastructure to becoming strategic fiduciary agents that are primarily focused on improving the value of the technology services consumed by users across the organization. This transformation is forcing organizations to rethink the way they approach and manage their technology investments. For instance, one fundamental and obsolete approach IT leaders need to change relates to unifying the disparate operational support teams and unconnected workflow processes that separate the near-time cost management of consumption-based cloud services (such as servers and storage) from traditional in arears expense management of network and communication service invoices. Strategic IT leaders require a unified near-time view of all the inter-related activities to run an effective expense management program.

IT Leadership Is Key To Enabling The Modern Digital Worker

The modern mobile digital worker relies on a combination of personal and company-owned devices enabled by both landline and wireless networks to achieve ubiquitous access to on-demand cloud-based services accessed through a vast spectrum of inter-connected networks and geographically distributed private and public data centers.  Therefore, every element of this dynamic virtualized global infrastructure needs unified near-time management oversight in order to help organizations maximize their investments and avoid exposure to unwanted costs and risks.

The On-Demand Digital Transformation Has Been Evolving For A Very Long Time

Each incremental evolution in technology over the last fifty years has improved the democratization of computing and network technologies and liberalized user access. Initially, access to expensive premise-based computing services was restricted to a finite quantity of proprietary dedicated hard-wired terminals. These terminals were directly connected to a singular central computing unit known as the mainframe which was typically located in the corporate data center. In the beginning of the computer evolution, the ratio of computer access points to employees was typically in the ratio of a few dozen employees per each hard-wired terminal. Procurements and fairly static expense management programs were guided by a universal corporate policy and typically funded as multi-year capitalization procurements that were financed by fixed allocation of costs to each cost center throughout the entire depreciation lifecycle.  This process was repeated for each lifecycle of replacement technology and completely controlled by essentially two entities – the IT and Finance departments.

Conversely, today, business users experience a far superior, quicker and more flexible self-service experience by simply clicking an application icon on their company-issued or personal device.  This paradigm shift results in a complete inversion of potentially uncontrolled user access points and installed applications. Supporting the modern digital workforce presents many more challenging complexities to managing a corporate expense management program. Today the digital worker simultaneously leverages a combination of landline and mobile devices to enable anywhere and anytime on-demand self-service access to a large spectrum of “aaS-based” cloud services including communication, infrastructure and business applications.  On-demand self-service means that the IT and Finance departments have little-to-no involvement in the daily activations, changes and deactivations of services.  Without near-time holistic insight, IT and Finance departments have no effective way to support their organizations and find themselves in a reactionary state each time they receive a new invoice.

Technology Is No Longer Purchased, But Leveraged For Periods Of Time

On-demand ephemeral cloud and network services means that more often than not, technology is no longer acquired, installed and subsequently deprecated over a long-term fixed depreciation lifecycle. Instead, departments or individual employees can simply use a credit card or activate a low-cost subscription that doesn’t require fiscal officer approval. In short, end users have the self-service ability at any time and from any mobile device to perform all the delivery services that were previously controlled by IT and Finance. The proliferation of self-service driven technology changes will not stop as it is necessary to accommodate the ever-changing business and market requirements in a timely manner in order to stay competitive.

IT Leaders Must Form Strategic Partnerships With Their Client Departments

Traditionally technology leaders and respective programs focused exclusively on managing the elements of the communication infrastructure with very little coordination or specific knowledge of the end user’s business activities. Today, managing access to computing and network services is now a direct extension of each digital employee’s role and ever-changing business requirements. To this end, modern IT programs can’t just focus on the managing the costs of premise-based physical technology or virtualized cloud-services. Instead, IT leaders must ensure their service support and delivery teams understand how and why technology enables their end users to achieve their business objectives in order to make sure they are making the right recommendations and decisions. This requires a new holistic IT operating model that supports the lifecycle of all digital technologies consumed across the entire organization. Organizations that fail to embrace this operating model will find themselves not understanding who, when and how cloud services are being used, and therefore, unable to make timely cost-effective decisions.

In subsequent blogs, we will discuss the fundamentals of managing cloud services and taking a holistic approach to managing all technology expenses.  In the meantime, be sure to check out our upcoming Calero World session “Extending TEM Best Practices into Additional Cloud-based Subscription Services” by registering here.