AI Governance

A Framework for Building Responsible, Ethical, Fair, and Transparent AI

Are you ready for AI?

Business leaders must manage the associated risks as they scale their use of AI

Regulations and risk assessment tools

Governments around the world are developing AI assessment methodologies and legislation for AI. Here are a couple of examples:

• Responsible use of artificial intelligence (AI) guiding principles (Canada):
  1. understand and measure the impact of using AI by developing and sharing tools and approaches
  2. be transparent about how and when we are using AI, starting with a clear user need and public benefit
  3. provide meaningful explanations about AI decision-making, while also offering opportunities to review results and challenge these decisions
  4. be as open as we can by sharing source code, training data, and other relevant information, all while protecting personal information, system integration, and national security and defense
  5. provide sufficient training so that government employees developing and using AI solutions have the responsible design, function, and implementation skills needed to make AI-based public services better
• The Algorithmic Impact Assessment tool (Canada) is used to determine the impact level of an automated decision-system. It defines 48 risk and 33 mitigation questions. Assessment scores consider factors such as systems design, algorithm, decision type, impact, and data.
• The National AI Initiative Act of 2020 (DIVISION E, SEC. 5001) (US) became law on January 1, 2021. This is a program across the entire Federal government to accelerate AI research and application.
• Bill C-27, Artificial Intelligence and Data Act (AIDA) (Canada), when passed, would be the first law in Canada regulating the use of artificial intelligence systems.
• The EU Artificial Intelligence Act (EU) assigns applications of AI to three risk categories: applications and systems that create an unacceptable risk, such as government-run social scoring; high-risk applications, such as a CV-scanning tool that ranks job applicants; and lastly, applications not explicitly listed as high-risk.
• The FEAT Principles Assessment Methodology was created by the Monetary Authority of Singapore (MAS) in collaboration with other 27 industry partners for financial institutions to promote fairness, ethics, accountability, and transparency (FEAT) in the use of artificial intelligence and data analytics (AIDA).

AI policies around the world

Source of data: OECD.AI (2021), powered by EC/OECD (2021), database of national AI policies, accessed on 7/09/2022, https://oecd.ai.

The need for AI governance

“To adopt AI, organizations will need to review and enhance their processes and governance frameworks to address new and evolving risks.” (Canadian RegTech Association, Safeguarding AI Use Through Human-Centric Design, 2020)

To ensure responsible, transparent, and ethical AI systems, organizations will need to review existing risk control frameworks and update them to include AI risk management and impact assessment frameworks and processes. As ML and AI technologies are constantly evolving, the AI governance and AI risk management frameworks will need to evolve to ensure the appropriate safeguards and controls are in place. This applies not only to the machine learning models and AI system custom built by the organization’s data science and AI team, but it also includes AI-powered vendor tools and technologies. The vendors should be able to explain how AI is used in their products, how the model was trained, and what data was used to train the model. AI governance enables management, monitoring, and control of all AI activities within an organization.

Key concepts

Info-Tech Research Group defines the key terms used in this document as follows:

Machine learning systems learn from experience and without explicit instructions. They learn patterns from data, then analyze and make predictions based on past behavior and the patterns learned.

Artificial intelligence is a combination of technologies and can include machine learning. AI systems perform tasks that mimic human intelligence, such as learning from experience and problem solving. Most importantly, AI makes its own decisions without human intervention.

We use the definition of data ethics by Open Data Institute: “Data ethics is a branch of ethics that considers the impact of data practices on people, society and the environment. The purpose of data ethics is to guide the values and conduct of data practitioners in data collection, sharing and use.”

Algorithmic or machine bias is systematic and repeatable errors in a computer system that create unfair outcomes, such as privileging one arbitrary group of users over others. Algorithmic bias is not a technical problem. It’s a social and political problem, and in the context of implementing AI for business benefits, it’s a business problem.

Download the blueprint Mitigate Machine Bias blueprint for detailed discussion on bias, fairness, and transparency in AI systems

Key concepts – explainable, transparent and trustworthy

AI Governance Framework

Monitoring Monitoring compliance and risk of AI/ML systems/models in production Tools & Technologies Tools and technologies to support AI governance framework implementation Model Governance Ensures accountability and traceability for AI/ML models

Organization Structure, roles, and responsibilities of the AI governance organization Operating Model How AI governance operates and works with other organizational structures to deliver value Risk and Compliance Alignment with corporate risk management and ensuring compliance with regulations and assessment frameworks Policies/Procedures/ Standards Policies and procedures to support implementation of AI governance

Effective IT Communications

Empower IT employees to communicate well with any stakeholder across the organization.

Analyst perspective

There has never been an expectation for IT to communicate well.

Brittany Lutes
Research Director
Info-Tech Research Group

Diana MacPherson
Senior Research Analyst
Info-Tech Research Group

IT rarely engages in proper communications. We speak at, inform, or tell our audience what we believe to be important. But true communications seldom take place.

Communications only occur when channels are created to ensure the continuous opportunity to obtain two-way feedback. It is a skill that is developed over time, with no individual having an innate ability to be better at communications. Each person in IT needs to work toward developing their personal communications style. The problem is we rarely invest in development or training related to communications. Information and technology fields spend time and money developing hard skills within IT, not soft ones.

The benefits associated with communications are immense: higher business satisfaction, funding for IT initiatives, increased employee engagement, better IT to business alignment, and the general ability to form ongoing partnerships with stakeholders. So, for IT departments looking to obtain these benefits through true communications, develop the necessary skills.

Executive summary

Info-Tech Insight
No one is born a good communicator. Every IT employee needs to spend the time and effort to grow their communication skills as constant change and worsening IT crises mean that IT cannot afford to communicate poorly anymore.

Your challenge

Overall satisfaction with IT is correlated to satisfaction with IT communications

The bottom line? For every 10% increase in communications there 8.6% increase in overall IT satisfaction. Therefore, when IT communicates with the organization, stakeholders are more likely to be satisfied with IT overall.

Info-Tech Diagnostic Programs, N=330 organizations

IT struggles to communicate effectively with the organization:

• CIOs are given minimal time to present to the board or executive leaders about IT’s value and alignment to business goals.
• IT initiatives are considered complicated and confusing.
• The frequency and impact of IT crises are under planned for, making communications more difficult during a major incident.
• IT managers do not have the skills to communicate effectively with their team.
• IT employees do not have the skills to communicate effectively with one another and end users.

Common obstacles

IT is prevented from communicating effectively due to these barriers:

• Difficulty assessing the needs of the audience to inform the language and means of communication that should be used.
• Using technical jargon rather than translating the communication into commonly understood terms.
• Not receiving the training required to develop communication skills across IT employees.
• Frequently speak at organization stakeholders rather than engaging through dialogue.
• Beginning many communications from a blank page, especially crisis communications.
• Difficulty presenting complex concepts in a short time to an audience in a digestible and concise manner without diluting the point.

Effective IT communications are rare:

53% of CXOs believe poor communication between business and IT is a barrier to innovation.
Source: Info-Tech CEO-CIO Alignment Survey, 2022

“69% of those in management positions don’t feel comfortable even communicating with their staff.”
Source: TeamStage, 2022

Info-Tech’s approach

Effective communications is not a broadcast but a dialogue between communicator and audience in a continuous feedback loop.

The Info-Tech difference:

1. Always treat every communication as a dialogue, enabling the receiver of the message to raise questions, concerns, or ideas.
2. Different audiences will require different communications. Be sure to cater the communication to the needs of the receiver(s).
3. Never assume the communication was effective. Create measures and adjust the communications to get the desired outcome.

Common IT communications

And the less common but still important communications

Communicating Up to Board or Executives

• Board Presentations
• Executive Leadership Committee Meetings
• Technology Updates
• Budget Updates
• Risk Updates
• Year in Review

Communicating Across the Organization

• Townhalls – external to IT
• Year in Review
• Crisis Email
• Intranet Communication
• Customer/Constituent Requests for Information
• Product Launches
• Email
• Watercooler Chat

Communicating Within IT

• Townhalls – internal to IT
• Employee 1:1s
• Team Meetings
• Project Updates
• Project Collaboration Sessions
• Year in Review
• All-Hands Meeting
• Employee Interview
• Onboarding Documentation
• Vendor Negotiation Meetings
• Vendor Product Meetings
• Email
• Watercooler Chat

Insight Summary

Overarching insight
IT cannot afford to communicate poorly given the overwhelming impact and frequency of change related to technology. Learn to communicate well or get out of the way of someone who can.

Communication principles

Follow these principles to support all IT communications.

Two-Way

Incorporate feedback loops into your communication efforts. Providing stakeholders with the opportunity to voice their opinions and ideas will help gain their commitment and buy-in.

Timely

Frequent communications mitigate rumors and the spread of misinformation. Provide warning before the implementation of any changes whenever possible. Communicate as soon as possible after decisions have been made.

Consistent

Make sure the messaging is consistent across departments, mediums, and presenters. Provide managers with key phrases to support the consistency of messages.

Open & Honest

Transparency is a critical component of communication. Always tell employees that you will share information as soon as you can. This may not be as soon as you receive the information but as soon as sharing it is acceptable.

Authentic

Write messages in a way that embodies the personality of the organization. Don’t spin information; position it within the wider organizational context.

Targeted

Use your target audience profiles to determine which audiences need to consume which messages and what mediums should be employed.

Importance of IT being a good communicator

Don’t pay the price for poor communication.

IT needs to communicate well because:

• IT risk mitigation and technology initiative funding are dependent on critical stakeholders comprehending the risk impact and initiative benefit in easy-to-understand terms.
• IT employees need clear and direct information to feel empowered and accountable to do their jobs well.
• End users who have a good experience engaging in communications with IT employees have an overall increase in satisfaction with IT.
• Continuously demonstrating IT’s value to the organization comes when those initiatives are clearly aligned to overall objectives.
• Communication prevents assumptions and further miscommunication from happening among IT employees who are usually impacted and fear change the most.

“Poor communication results in employee misunderstanding and errors that cost approximately $37 billion.”
– Intranet Connections, 2019

Effective communication enables organizational strategy and facilitates a two-way exchange

What makes internal communications effective?

To be effective, internal communications must be strategic. They should directly support organizational objectives, reinforce key messages to make sure they drive action, and facilitate two-way dialogue, not just one-way messaging.

Measure the value of the communication

Communication effectiveness can be measured through a variety of metrics:

• Increase in Productivity
“When employees are offered better communication technology and skills, productivity can increase by up to 30%” (Expert Market, 2022).

• Increase in Understanding Decision Rationale
Employees who report understanding the rationale behind the business decisions made by the executive leadership team (ELT) are 3.6x more likely to be engaged, compared to those who were not (McLean & Company Engagement Survey Database, 2022; N=133,167 responses, 187 organizations).

• Increase in Revenue
Collaboration amongst C-suite executives led to a 27% increase in revenue compared to low collaborating C-suites (IBM, 2021).

• Increase in End-User Satisfaction
80.9% of end users are satisfied with IT’s ability to communicate with them regarding the information they need to perform their job (Info-Tech’s End-User Satisfaction Survey Database, N=20,617 end users from 126 organizations).

Methods to determine effectiveness:

• CIO Business Vision Survey
• Engagement surveys
• Focus groups
• Suggestion boxes
• Team meetings
• Random sampling
• Informal feedback
• Direct feedback
• Audience body language
• Repeating the message back

How to navigate the research center

This research center is intended to ensure that IT never starts their communications from a blank page again:

“‘Effectiveness’ can mean different things, and effectiveness for your project is going to look different than it would for any other project.”
– Gale McCreary in WikiHow, 2022

Audience: Organizational leadership

Speaking with Board and executive leaders about strategy, risk, and value

Keep in mind:

“Today’s CIOs have a story to tell. They must change the old narrative and describe the art of the (newly) possible. A great leader rises to the occasion and shares a vision that inspires the entire organization.”
– Dan Roberts, CIO, 2019

Communications for board presentations

Secure funding and demonstrate IT as a value add to business objectives.

DEFINING INSIGHT

Stop presenting what is important to you as the CIO and present to the board what is important to them.

Why does IT need to communicate with the board?

• To get their buy-in and funding for critical IT initiatives.
• To ensure that IT risks are understood and receive the funding necessary to mitigate.
• To change the narrative of IT as a service provider to a business enabler.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating Board Presentations:

Do: Ensure you know all the members of the board and their strengths/areas of focus.

Do: Ensure the IT objectives and initiatives align to the business objectives.

Do: Avoid using any technical jargon.

Do: Limit the amount of data you are using to present information. If it can’t stand alone, it isn’t a strong enough data point.

Do: Avoid providing IT service metrics or other operational statistics.

Do: Demonstrate how the organization’s revenue is impacted by IT activities.

Do: Tell a story that is compelling and excited.

OUTCOME

Organization Alignment

• Approved organization objectives and IT objectives are aligned and supporting one another.

Stakeholder Buy-In

• Board members all understand what the future state of IT will look like – and are excited for it!

Awareness on Technology Trends

• It is the responsibility of the CIO to ensure the board is aware of critical technology trends that can impact the future of the organization/industry.

Risks

• Risks are understood, the impact they could have on the organization is clear, and the necessary controls required to mitigate the risk are funded.

Communications for business updates

Continuously build strong relationships with all members of business leadership.

DEFINING INSIGHT

Business leaders care about themselves and their goals – present ideas and initiatives that lean into this self-interest.

Why does IT need to communicate business updates?

• The key element here is to highlight how IT is impacting the organization’s overall ability to meet goals and targets.
• Ensure all executive leaders know about and understand IT’s upcoming initiatives – and how they will be involved.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating Business Updates:

Do: Ensure IT is given sufficient time to present with the rest of the business leaders.

Do: Ensure the goals of IT are clear and can be depicted visually.

Do: Tie every IT goal to the objectives of different business leaders.

Do: Avoid using any technical jargon.

Do: Reinforce the positive benefits business leaders can expect.

Do: Avoid providing IT service metrics or other operational statistics.

Do: Demonstrate how IT is driving the digital transformation of the organization.

OUTCOME

Better Reputation

• Get other business leaders to see IT as a value add to any initiative, making IT an enabler not an order taker.

Executive Buy-In

• Executives are concerned about their own budgets; they want to embrace all the innovation but within reason and minimal impact to their own finances.

Digital Transformation

• Indicate and commit to how IT can help the different leaders deliver on their digital transformation activities.

Relationship Building

• Establish trust with the different leaders so they want to engage with you on a regular basis.

Audience: Organization wide

Speaking with all members of the organization about the future of technology – and unexpected crises.

Less than 50% of internal communications lean on a proper framework to support their communication activities.
– Philip Nunn, iabc, 2020

Communications for strategic IT initiatives

Communicate IT’s strategic objectives with all business stakeholders and users.

DEFINING INSIGHT

IT leaders struggle to communicate how the IT strategy is aligned to the overall business objectives using a common language understood by all.

Why does IT need to communicate its strategic objectives?

• To ensure a clear and consistent view of IT strategic objectives can be understood by all stakeholders within the organization.
• To demonstrate that IT strategic objectives are aligned with the overall mission and vision of the organization.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating IT Strategic Objectives:

Do: Ensure all IT leaders are aware of and understand the objectives in the IT strategy.

Do: Ensure there is a visual representation of IT’s goals.

Do: Ensure the IT objectives and initiatives align to the business objectives.

Do: Avoid using any technical jargon.

Do: Provide metrics if they are relevant, timely, and immediately understandable.

Do: Avoid providing IT service metrics or other operational statistics.

Do: Demonstrate how the future of the organization will benefit from IT initiatives.

OUTCOME

Organization Alignment

• All employees recognize the IT strategy as being aligned, even embedded, into the overall organization strategy.

Stakeholder Buy-In

• Business and IT stakeholders alike understand what the future state of IT will look like – and are excited for it!

Role Clarity

• Employees within IT are clear on how their day-to-day activities impact the overall objectives of the organization.

Demonstrate Growth

• Focus on where IT is going to be maturing in the coming one to two years and how this will benefit all employees.

Communications for crisis management

Minimize the fear and chaos with transparent communications.

DEFINING INSIGHT

A crisis communication should fit onto a sticky note. If it’s not clear, concise, and reassuring, it won’t be effectively understood by the audience.

Why does IT need to communicate when a crisis occurs?

• To ensure all members of the organization have an understanding of what the crisis is, how impactful that crisis is, and when they can expect more information.
• “Half of US companies don’t have a crisis communication plan” (CIO, 2017).

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating During a Crisis:

Do: Provide timely and regular updates about the crisis to all stakeholders.

Do: Involve the Board or ELT immediately for transparency.

Do: Avoid providing too much information in a crisis communication.

Do: Have crisis communication statements ready to be shared at any time for possible or common IT crises.

Do: Highlight that employee safety and wellbeing is top priority.

Do: Work with members of the public relations team to prepare any external communications that might be required.

OUTCOME

Ready to Act

• Holding statements for possible crises will eliminate the time and effort required when the crisis does occur.

Reduce Fears

• Prevent employees from spreading concerns and not feeling included in the crisis.

Maintain Trust

• Ensure Board and ELT members trust IT to respond in an appropriate manner to any crisis or major incident.

Eliminate Negative Reactions

• Any crisis communication should be clear and concise enough when done via email.

Audience: IT employees

IT employees need to receive and obtain regular transparent communications to better deliver on their expectations.

Keep in mind:

“IT professionals who […] enroll in communications training have a chance to both upgrade their professional capabilities and set themselves apart in a crowded field of technology specialists.”
– Mark Schlesinger, Forbes, 2021

Communications for IT activities and tactics

Get IT employees aligned and clear on their daily objectives.

DEFINING INSIGHT

Depending on IT goals, the structure might need to change to support better communication among IT employees.

Why does IT need to communicate IT activities?

• To ensure all members of the project team are aligned with their tasks and responsibilities related to the project.
• To be able to identify, track, and mitigate any problems that are preventing the successful delivery of the project.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating IT Activities:

Do: Provide metrics that define how success of the project will be measured.

Do: Demonstrate how each project aligns to the overarching objectives of the organization.

Do: Avoid having large meetings that include stakeholders from two or more projects.

Do: Consistently create a safe space for employees to communicate risks related to the project(s).

Do: Ensure the right tools are being leveraged for in-office, hybrid, and virtual environments to support project collaboration.

Do: Leverage a project management software to reduce unnecessary communications.

OUTCOME

Stakeholder Adoption

• Create a standard communication template so stakeholders can easily find and apply communications.

Resource Allocation

• Understand what the various asks of IT are so employees can be adequately assigned to tasks.

Meet Responsibly

• Project status meetings are rarely valuable or insightful. Use meetings for collaboration, troubleshooting, and knowledge sharing.

Encourage Engagement

• Recognize employees and their work against critical milestones, especially for projects that have a long timeline.

Communications for everyday IT

Engage employees and drive results with clear and consistent communications.

DEFINING INSIGHT

Employees are looking for empathy to be demonstrated by those they are interacting with, from their peers to managers. Yet, we rarely provide it.

Why does IT need to communicate on regularly with itself?

• Regular communication ensures employees are valued, empowered, and clear about their expectations.
• 97% of employees believe that their ability to perform their tasks efficiently is impacted by communication (Expert Market, 2022).

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating within IT:

Do: Have responses for likely questions prepared and ready to go.

Do: Ensure that all leaders are sharing the same messages with their teams.

Do: Avoid providing irrelevant or confusing information.

Do: Speak with your team on a regular basis.

Do: Reinforce the messages of the organization every chance possible.

Do: Ensure employees feel empowered to do their jobs effectively.

Do: Engage employees in dialogue. The worst employee experience is when they are only spoken at, not engaged with.

OUTCOME

Increased Collaboration

• Operating in a vacuum or silo is no longer an option. Enable employees to successfully collaborate and deliver holistic results.

Role Clarity

• Clear expectations and responsibilities eliminate confusion and blame game. Engage employees and create a positive work culture with role clarity.

Prevent Rumors

• Inconsistent communication often leads to information sharing and employees spreading an (in)accurate narrative.

Organizational Insight

• Employees trust the organization’s direction because they are aware of the different activities taking place and provided with a rationale about decisions.

Case Study

Amazon

INDUSTRY
E-Commerce

SOURCE
Harvard Business Review

Jeff Bezos has definitely taken on unorthodox approaches to business and leadership, but one that many might not know about is his approach to communication. Some of the key elements that he focused on in the early 2000s when Amazon was becoming a multi-billion-dollar empire included:

• Banning PowerPoint for all members of the leadership team. They had to learn to communicate without the crutch of the most commonly used presentation tool.
• Leveraging memos that included specific action steps and clear nouns
• Reducing all communication to an eighth-grade reading level, including pitches for new products (e.g. Kindle).

Results

While he was creating the Amazon empire, 85% of Jeff Bezos’ communication was written in a way that an eighth grader could read. Communicating in a way that was easy to understand and encouraging his leadership team to do so as well is one of the many reasons this business has grown to an estimated value of over $800B.

“If you cannot simplify a message and communicate it compellingly, believe me, you cannot get the masses to follow you.”
– Indra Nooyi, in Harvard Business Review, 2022

Communication competency expectations

Communication is a business skill; not a technical skill.

Source: Skills Framework for the Information Age, 2021

Key KPIs for communication with any stakeholder

Measuring communication is hard; use these to determine effectiveness.

Standard workshop communication activities

Introduction
Communications overview.

Plan
Plan your communications using a strategic tool.

Compose
Create your own message.

Deliver
Practice delivering your own message.

Contact your account representative for more information. workshops@infotech.com 1-888-670-8889

Research contributors and experts

Anuja Agrawal
National Communications Director
PwC

Anuja is an accomplished global communications professional, with extensive experience in the insurance, banking, financial, and professional services industries in Asia, the US, and Canada. She is currently the National Communications Director at PwC Canada. Her prior work experience includes communication leadership roles at Deutsche Bank, GE, Aviva, and Veritas. Anuja works closely with senior business leaders and key stakeholders to deliver measurable results and effective change and culture building programs. Anuja has experience in both internal and external communications, including strategic leadership communication, employee engagement, PR and media management, digital and social media, and M&A/change and crisis management. Anuja believes in leveraging digital tools and technology-enabled solutions, combined with in-person engagement, to help improve the quality of dialogue and increase interactive communication within the organization to help build an inclusive culture of belonging.

Nastaran Bisheban
Chief Technology Officer
KFC Canada

A passionate technologist, and seasoned transformational leader. A software engineer and computer scientist by education, a certified Project Manager that holds an MBA in Leadership with Honors and Distinction from University of Liverpool. A public speaker on various disciplines of technology and data strategy with a Harvard Business School executive leadership program training to round it all. Challenges status quo and conventional practices; is an advocate for taking calculated risk and following the principle of continuous improvement. With multiple computer software and project management publications she is a strategic mentor and board member on various non-profit organizations. Nastaran sees the world as a better place only when everyone has a seat at the table and is an active advocate for diversity and inclusion.

Heidi Davidson
Co-Founder & CEO
Galvanize Worldwide and Galvanize On Demand

Dr. Heidi Davidson is the co-founder and CEO of Galvanize Worldwide, the largest distributed network of marketing and communications experts in the world. She also is the co-founder and CEO of Galvanize On Demand, a tech platform that matches marketing and communications freelancers with client projects. Now with 167 active experts, the Galvanize team delivers startup advisory work, outsourced marketing, training, and crisis communications to organizations of all sizes. Before Galvanize, Heidi spent four years as part of the turnaround team at BlackBerry as the Chief Communications Officer and SVP of Corporate Marketing, where she helped the company move from a device manufacturer to a security software provider.

Eli Gladstone
Co-Founder
Speaker Labs

Eli is a co-founder of Speaker Labs. He has spent over six years helping countless individuals overcome their public speaking fears and communicate with clarity and confidence. When he’s not coaching others on how to build and deliver the perfect presentation, you’ll probably find him reading some weird books, teaching his kids how to ski or play tennis, or trying to develop a good-enough jumpshot to avoid being a liability on the basketball court.

Francisco Mahfuz
Keynote Speaker & Storytelling Coach

Francisco Mahfuz has been telling stories in front of audiences for a decade and even became a National Champion of public speaking. Today, Francisco is a keynote speaker and storytelling coach and offers communication training to individuals and international organizations and has worked with organizations like Pepsi, HP, the United Nations, Santander, and Cornell University. He’s the author of Bare: A Guide to Brutally Honest Public Speaking and the host of The Storypowers Podcast, and he’s been part of the IESE MBA communications course since 2020. He’s received a BA in English Literature from Birkbeck University in London.

Sarah Shortreed
EVP & CTO
ATCO Ltd.

Sarah Shortreed is ATCO’s Executive Vice President and Chief Technology Officer. Her responsibilities include leading ATCO’s Information Technology (IT) function as it continues to drive agility and collaboration throughout ATCO’s global businesses and expanding and enhancing its enterprise IT strategy, including establishing ATCO’s technology roadmap for the future. Ms. Shortreed’s skill and expertise are drawn from her more than 30-year career that spans many industries and includes executive roles in business consulting, complex multi-stakeholder programs, operations, sales, customer relationship management, and product management. She was recently the Chief Information Officer at Bruce Power and has previously worked at BlackBerry, IBM, and Union Gas. She sits on the Board of Governors for the University of Western Ontario and is the current Chair of the Chief Information Officer (CIO) Committee at the Conference Board of Canada.

Eric Silverberg
Co-Founder
Speaker Labs

Eric is a co-founder of Speaker Labs and has helped thousands of people build their public speaking confidence and become more dynamic and engaging communicators. When he’s not running workshops to help people grow in their careers, there’s a good chance you’ll find him with his wife and dog, drinking Diet Coke, and rewatching iconic episodes of the reality TV show Survivor! He’s such a die-hard fan, that you’ll probably see him playing the game one day.

Stephanie Stewart
Communications Officer & DR Coordinator
Info Security Services Simon Fraser University

Steve Strout
President
Miovision Technologies

Mr. Strout is a recognized and experienced technology leader with extensive experience in delivering value. He has successfully led business and technology transformations by leveraging many dozens of complex global SFDC, Oracle, and SAP projects. He is especially adept at leading what some call “Project Rescues” – saving people’s careers where projects have gone awry; always driving “on-time and on-budget.” Mr. Strout is the current President of Miovision Technologies and the former CEO and board member of the Americas’ SAP Users” Group (ASUG). His wealth of practical knowledge comes from 30 years of extensive experience in many CxO and executive roles at some prestigious organizations such as Vonage, Sabre, BlackBerry, Shred-it, The Thomson Corporation (now Thomson Reuters), and Morris Communications. He has served on boards including Customer Advisory Boards of Apple, AgriSource Data, Dell, Edgewise, EMC, LogiSense, Socrates.ai, Spiro Carbon Group, and Unifi.

Info-Tech Research Group Contributors:

Plus an additional two contributors who wish to remain anonymous.

Related Info-Tech Research

Boardroom Presentation Review

• You will come away with a clear, concise, and compelling board presentation that IT leaders can feel confident presenting in front of their board of directors.
• Add improvements to your current board presentation in terms of visual appeal and logical flow to ensure it resonates with your board of directors.
• Leverage a best-of-breed presentation template.

Build a Better Manager

• Management skills training is needed, but organizations are struggling to provide training that makes a long-term difference in the skills managers actually use in their day to day.
• Many training programs are ineffective because they offer the wrong content, deliver it in a way that is not memorable, and are not aligned with the IT department’s business objectives.

Crisis Communication Guides

During a crisis it is important to communicate to employees through messages that convey calm and are transparent and tailored to your audience. Use the Crisis Communication Guides to:

• Draft a communication strategy.
• Tailor messages to your audience.
• Draft employee crisis communications.

Bibliography

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Gallo, Carmine. “How Great Leaders Communicate.” Harvard Business Review, 23 November 2022

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Lambden, Duncan. “The Importance of Effective Workplace Communication – Statistics for 2022.” Expert Market, 13 June 2022.

“Mapping SFIA Levels of Responsibilities to Behavioural Factors.” Skills Framework for the Information Age, 2021.

McCreary, Gale. “How to Measure the Effectiveness of Communication: 14 Steps.” WikiHow, 31 March 2023.

Nowak, Marcin. “Top 7 Communication Problems in the Workplace.” MIT Enterprise Forum CEE, 2021.

Nunn, Philip. “Messaging That Works: A Unique Framework to Maximize Communication Success.” iabc, 26 October 2020.

Picincu, Andra. “How to Measure Effective Communications.” Small Business Chron. 12 January 2021.

Price. David A. “Pixar Story Rules.” Stories From the Frontiers of Knowledge, 2011.

Roberts, Dan. “How CIOs Become Visionary Communicators.” CIO, 2019.

Schlesinger, Mark. “Why building effective communication skill in IT is incredibly important.” Forbes, 2021.

Stanten, Andrew. “Planning for the Worst: Crisis Communications 101.” CIO, 25 May 2017.

State of the American Workplace Report. Gallup, 6 February 2020.

“The CIO Revolution.” IBM, 2021.

“The State of High Performing Teams in Tech 2022.” Hypercontex, 2022.

Walters, Katlin. “Top 5 Ways to Measure Internal Communication.” Intranet Connections, 30 May 2019.

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Analyst Perspective

Optimize your cost sustainably.

Whether the industry is in an economic downturn, or your business is facing headwinds in the market, pressure to reduce spending across organizations is inevitable. When it comes to the IT organization, it is often handled as a onetime event. Cost optimization is an industry standard term, but it usually translates into cost cutting. How do you manage this challenge given the day-to-day demands placed on IT? Do you apply cost reduction equally across the IT landscape, or do you apply reductions using a targeted approach? How do you balance the business demands regarding innovation with keeping the lights on? What is the best path forward?

While the situation isn't unique, all too often the IT organization response is too shortsighted.

By using the Info-Tech methodology and tools, you will be able to develop an IT cost optimization roadmap based on your specific circumstances and timeline.

A well-thought-out strategy should help you achieve three objectives:

1. Reduce your unwarranted IT spending.
2. Optimize your cost-to-value.
3. Sustain your cost optimization.

This blueprint will guide you to understand your mandate, identify your cost optimization journey (reactive, proactive, or strategic), and assess your IT spend across four levers (assets, vendors, project portfolio, and workforce).

Finally, keep in mind that cost optimization is not a project to be completed, but an ongoing process to be exercised.

Bilal Alberto Saab
Research Director, IT Financial Management
Info-Tech Research Group

Executive Summary

Info-Tech Insight
Cost optimization is not just about reducing costs. In fact, you should aim to achieve three objectives: (1) reduce your unwarranted IT spending, (2) optimize your cost-to-value, and (3) sustain your cost optimization.

Your challenge

IT leaders are often asked to cut costs.

• Cost management is a long-term challenge. Businesses and IT departments look to have a flexible cost structure focused on maximizing business value while maintaining the ability to adapt to market pressure. However, businesses must also be able to respond to unexpected events.
• In times of economic downturn, many CEOs and CFOs shift their thinking from growth to value protection. This can force a round of cost cutting across all departments focused on short-term, immediate, and measurable objectives.
• Many IT departments are then faced with the challenge of meeting cost cutting targets. No one knows exactly how markets will behave, but the effects of rising inflation and increasing interest rates, for example, can manifest very quickly.

When crisis hits, does IT's hard-won gains around being seen as a partner to the business suddenly disappear and IT becomes just a cost center all over again?

In times of economic slowdown or downturn, the key challenge of IT leaders is to optimize costs without jeopardizing their strategic and innovative contribution.

Common obstacles

The 90% of the budget you keep is more important than the 10% of the budget you cut.

• While the business responds to fluctuating economic conditions, IT must ensure that its budget remains fully aligned with business strategy and expected business value.
• However, in the face of sudden pressures, a common tendency is to make quick decisions without fully considering their long-term implications.
• Avoid costly mistakes with a proactive and strategic mindset. Put in place a well-communicated cost optimization strategy rather than hastily cutting back the biggest line items in your budget.

How can IT optimize costs to achieve a corporate impact, but not cut so deep that the organization can't take advantage of opportunities to recover and thrive?

Know how you will strategically optimize IT costs before you are forced to cut cost aggressively in a reactive fashion.

What is cost optimization?

It's not just about cutting costs

• While cost optimization may involve cutting costs, it is more about making smart spend and investment decisions.
• At its core, cost optimization is a strategic decision-making process that sets out to minimize waste and get the most value for money.
• Cost optimization encompasses near-term, mid-term, and long-term objectives, all of which are related and build upon one another. It is an accumulative practice, not a onetime exercise.
• A sound cost optimization practice is inherently flexible, sustainable, and consequence-oriented with the positive goal of generating net benefit for the organization over time.

Change your mindset ...

An Info-Tech survey of IT staff reveals that while most agree that cost optimization is an important IT process, nearly 20% fewer of them agree that it's being managed well.

Info-Tech IT Management & Governance Diagnostic, 2022.

A starting point for cost optimization improvement is adjusting your frame of mind. Know that it's not just about making difficult cuts - in reality, it's a creative pursuit that's about thriving in all circumstances, not just surviving.

Slow revenue growth expectations generate urgency

Many IT organizations will be directed to trim costs during turbulent times.

• Cost optimization implies continuous cost management, which entails long-term strategic initiatives (i.e. organizations and their IT departments seek flexible cost structures and practices focused on maximizing business value while maintaining the ability to adapt to changes in the broader economic environment). However, organizations must also be able to respond to unexpected events.
• During times of turmoil – poor economic outlook expected to negatively impact an organization's bottom line – CEOs and CFOs think more about survival than growth, driving cost cutting across all departments to create short-term, immediate, and measurable financial benefits.
• In such situations, many IT departments will be hard-pressed to meet cost cutting targets at short notice. If not planned correctly, with a tunnel vision focus instead of a strategic one, you can end up hurting yourself in the not-so-distant future.

Insight summary

Sustain an optimal cost-to-value ratio across four levers:

1. Assets
2. Vendors
3. Project Portfolio
4. Workforce

Cost optimization is not just about reducing costs

In fact, you should aim to achieve three objectives:
(1) reduce your unwarranted IT spending, (2) optimize your cost-to-value, and (3) sustain your cost optimization.

Reduce unwarranted IT spending

Stop the bleeding or go for quick wins
Start by reducing waste and bad spending habits while clearly communicating your intentions to your stakeholders – get buy-in.

Optimize cost-to-value

Value means tradeoffs
Pursue value but know that it will lead you to make tradeoffs between cost, performance, and risk.

Sustain cost optimization

Think about tomorrow: reduce, reuse, recalibrate, and repeat
Standardize and automate your cost optimization processes around a proper governance framework. Cost optimization is not a onetime exercise.

Info-Tech's methodology for building your IT cost optimization roadmap

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

IT Cost Optimization Roadmap Samples and Templates
Templates including an abbreviated executive presentation and a final communication presentation based on a 12-month cost optimization roadmap.

IT Cost Optimization Workbook
A workbook generating a 12-month cost optimization roadmap.

Measure the value of this blueprint

Maintain an optimal IT cost-to-organization revenue ratio.

This blueprint will guide you to set cost optimization goals across one to three main objectives, depending on your identified journey (reactive, proactive, or strategic):

• Reduce unwarranted IT spending.
• Optimize cost-to value.
• Sustain cost optimization.

In phase 1 of this blueprint, we will help you establish your goals to satisfy your organization's needs.

In phase 3, we will help you develop a game plan and a roadmap for achieving those metrics.

Once you implement your 12-month roadmap, start tracking the metrics below over the next fiscal year (FY) to assess the effectiveness of undertaken measures.

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks are used throughout all four options.

Guided implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI will include multiple calls over the course of one to two months.

IT cost analysis and optimization workshop overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Phase 1

Understand Your Mandate and Objectives

Phase 1
Understand Your Mandate and Objectives

Phase 2
Outline Your Cost Optimization Initiatives

Phase 3
Develop Your IT Cost Optimization Roadmap

Phase 4
Communicate and Execute

This phase will walk you through the following activities:

• Business context and cost optimization journey
• Cost constraints and parameters
• Cost optimization goals

This phase involves the following participants:

• CIO/IT director
• IT finance lead

1.1 Gain consensus on the business context and IT cost optimization journey

60 minutes

• Using the questions on slide 20, conduct a brief journey assessment to ensure consensus on the direction you are planning to take.
• Document your findings in the provided template.

See the next three slides for guidelines and the journey assessment questions and template.

Distinguishing between three journeys

By considering business objectives without forgoing your IT mandate.

Questions to help determine your journey

Template & Example

Journey assessment

1.2 Review internal and external benchmarking reports

60-90 minutes

1. Review the IT spend and staffing results, summarized in your Info-Tech IT Spend & Staffing Benchmarking report.
2. Identify areas where your IT spend is disproportionately high or low in comparison with your industry peers.
3. Review and document any causes or rationales for high or low spend in each area identified. Do not be specific about any actual optimization targets or actions at this stage - simply make notes.
4. Start a list of potential cost optimization initiatives to be further analyzed and investigated for feasibility at a later stage (see next slides for guidance, example, and template).

Info-Tech's approach

Our IT cost model maps your IT spending and staffing according to four key views, putting IT spend in language that stakeholders across the organization can relate to.

Template & Example

Potential cost optimization initiatives list

Brainstorm and list potential cost optimization initiatives at a macro level.

Want help with your IT spend transparency and benchmarking efforts?

Let us fast-track your IT spend journey.

The path to IT financial management maturity starts with knowing exactly where your money is going. To streamline this effort, Info-Tech offers an IT Spend & Staffing Benchmarking service that provides full transparency into where your money is going without any heavy lifting on your part.

This unique service features:

• A client-proven approach to meet your IT spend transparency goals.
• Spend and staff mapping that reveals business consumption of IT.
• Industry benchmarking to compare your spending and staffing to that of your peers.
• Results in a fraction of the time with much less effort than going it alone.
• Expert review of results and ongoing discussions with Info-Tech analysts.

If you'd like Info-Tech to pave the way to IT spend transparency, contact your account manager for more information - we're happy to talk anytime.

1.3 Identify your overarching constraints

30 minutes

1. Assess where spend change opportunities are currently limited or nonexistent due to organization edict or policy, industry regulatory requirements, or active contracts. Ask yourself:
   1. Where do IT spend bottlenecks exist and what are they?
   2. What IT spend objectives and practices are absolutely mandatory and nonnegotiable from both a business and an IT perspective?
   3. Are there areas where spend change is possible but would be very difficult to execute due to the stakeholders involved, governance processes, time frames, or another constraining factor?
2. Identify where reduction or elimination of an IT service would negatively affect required service levels and business continuity or recovery.
3. List constraints as negotiable or nonnegotiable on the template provided.
4. Remove areas of focus from your cost optimization scope that land outside achievable parameters, and flag those that are difficult but still possible.

See the next slides for additional guidance and a constraints assessment template.

Acknowledge your limitations

By recognizing your constraints, which will lead you to define your cost optimization scope.

We define a constraint as a restriction controlling the behavior of any of your stakeholders, hence preventing a desired outcome.

In our context, constraints will determine your playing field: the boundaries of your cost optimization scope.

Distinguish between constraints

Negotiable vs. nonnegotiable to delimit your cost optimization scope.

Template & Example

Constraints assessment

List high-level limitations that hinder your cost optimization options.

1.4 Establish overarching cost optimization goals

60-90 minutes

1. Establish specific IT cost optimization goals. Depending on your journey, step 1.1. You will have one to three overarching cost optimization goals, as follows:
   1. Reactive: Cost-cutting goal to reduce unwarranted IT spending.
   2. Proactive: Cost-to-value optimization goal.
   3. Strategic: Cost optimization sustainability goal.
   Consider amounts and time frames, as well as likely/suitable approaches you plan to employ to achieve these goals.
2. Document your final cost optimization goals in the IT Cost Optimization Workbook.
3. Revisit your goals after outlining your initiatives (phase 2) to ensure feasibility depending on your journey.

Download the IT Cost Optimization Workbook

Template & Example

Document your overarching goals

Excel Workbook: IT Cost Optimization – Set Optimization Goals Worksheet

Refer to the example and guidelines below on how to document your goals based on your journey:

Complete the following fields for each goal depending on your journey in the Excel Workbook as per guidelines:

1. Navigate to the Set Cost Optimization Goals tab.
2. Identify your journey and objective for each goal.
3. Document your goal(s).

Download the IT Cost Optimization Workbook

Template & Example

Break down your goals per quarter

Excel Workbook: IT Cost Optimization - Set Cost Optimization Goals Worksheet

Refer to the example and guidelines below on how to break down your goals per quarter and track your progress:

Complete the following fields for each goal depending on your journey in the Excel Workbook as per guidelines:

1. Navigate to the Set Cost Optimization Goals tab.
2. Determine your target per quarter for every goal.
3. Document your targets.

Download the IT Cost Optimization Workbook

1.5 Identify inputs required for decision making

60-90 minutes

1. Each of the optimization levers (assets, vendors, project portfolio, and workforce) will require specific and unique sources of information which you will need to collect before moving forward. Examples of important sources of information include:
   1. Latest iteration of the IT strategy.
   2. List of IT assets (hardware, software).
   3. List of IT services or IT service catalog.
   4. List of current and planned IT projects and their resourcing allocations.
   5. List of largest vendor contracts and their key details, such as their expiration/renewal date.
   6. IT department organizational chart and salaries (by role).
2. Review and analyze each of the documents.
3. Continue to list potential cost optimization initiatives (step 1.2) to be further analyzed and investigated for feasibility at a later stage.

Prepare all pertinent sources of information

And start drafting your cost optimization laundry list.

Phase 2

Outline Your Cost Optimization Initiatives

Phase 1
Understand Your Mandate and Objectives

Phase 2
Outline Your Cost Optimization Initiatives

Phase 3
Develop Your IT Cost Optimization Roadmap

Phase 4
Communicate and Execute

This phase will walk you through the following activities:

• IT cost optimization initiatives
• IT cost optimization workbook

This phase involves the following participants:

• CIO/IT director
• IT finance lead
• IT asset manager
• IT infrastructure manager
• IT vendor management lead
• PMO lead
• IT talent management representative
• Other IT management

Outline your cost optimization initiatives

Across Info-Tech's four levers.

Most common cost optimization challenges

Across Info-Tech's four levers.

2.1 Determine your cost optimization initiatives

8 hours

Now that you have identified your journey and understood your constraints:

1. Review your list of potential cost optimization initiatives and document viable ones in the IT Cost Optimization Workbook.
2. Think of potential cost optimization initiatives within the four levers: assets, vendors, project portfolio, and workforce. The following slides will help you in this endeavor.

Download the IT Cost Optimization Workbook

Plan your cost optimization initiatives

Your initiatives will differ depending on your journey

In terms of aggressiveness and objectives.

Cost optimization initiatives pertaining to a reactive journey are characterized by aggressive cost reduction.

On the other hand, cost optimization initiatives within a strategic journey can vary in aggressiveness across objectives.

2.1.1 Identify asset optimization initiatives

2 hours

1. Review the IT asset management strategy if available. Compile a list of all hardware, software, and facility asset costs for delivery of IT services.
2. Analyze hardware and software assets for opportunities to consolidate, reduce, eliminate, and/or enhance functionality/automation. Look for:
   1. Redundancy or duplication of functionality not necessary for disaster recovery or business continuity purposes.
   2. Low or no-use software.
   3. Homegrown or legacy systems with high maintenance/support burdens.
   4. Multiple, old, or unsupported versions of current-use software.
   5. Opportunities to delay hardware/software refreshes or upgrades.
   6. Cloud/outsourced options.
   7. Instances of unsanctioned shadow IT.
3. Reassess your in-house asset management processes to see where efficiency and effectiveness could be improved overall.
4. Document cost optimization initiatives that could be driven by asset optimization objectives in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

Example

Asset optimization

Some examples to get you started

Template & Example

List your objectives and initiatives

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to input your asset optimization initiatives and related objectives:

List your initiatives in the provided Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Enter all your initiatives driven by the asset optimization lever.
3. Determine the cost optimization objective per initiative.

2.1.2 Identify vendor optimization initiatives

2 hours

1. Revisit the IT vendor classification if available. Identify all existing vendor contracts up for renewal within the current fiscal year and create an inventory.
2. Examine your vendor contracts to optimize your expected value from every IT provider you deal with. For each contract:
   1. Identify the business purpose/drivers.
   2. Identify the expiration/renewal date to determine time frames for action.
   3. Determine if there is an opportunity to rightsize, cancel, renegotiate costs/service levels, or postpone renewal/purchase.
   4. Identify integrations and interdependencies with other hardware and software systems to understand scope and impact of potential changes.
3. Reassess your in-house vendor management processes to see where efficiency and effectiveness could be improved overall.
4. Document cost optimization initiatives that could be driven by vendor optimization objectives in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

Example

Vendor optimization

Some examples to get you started.

Template & Example

List your objectives and initiatives

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to input your vendor optimization initiatives and related objectives:

List your initiatives in the provided Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Enter all your initiatives driven by the vendor optimization lever.
3. Determine the cost optimization objective per initiative.

2.1.3 Identify project portfolio optimization initiatives

2 hours

1. Review the IT Project Portfolio Strategy if available, and the list of both in-flight and planned projects.
2. Reassess your project portfolio to maximize total value in line with business objectives and strategy. For each current and pending project on the list, identify a cost optimization initiative, including:
   1. Revisiting, confirming, and documenting actual project rationale with the business in relation to strategic goals.
   2. Rescoping existing projects that are underway.
   3. Accelerating planned or existing projects that enable business cost savings or competitive advantage and revenue growth.
   4. Canceling or postponing projects that are underway or haven't started.
   5. Identifying net-new projects that enhance business capabilities or save business costs.
3. Reassess your in-house project management and project portfolio management processes to see where efficiency and effectiveness could be improved overall.
4. Document cost optimization initiatives that could be driven by project portfolio optimization objectives in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

Example

Project portfolio optimization

Some examples to get you started.

Template & Example

List your objectives and initiatives

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to input your project portfolio optimization initiatives and related objectives:

List your initiatives in the provided Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Enter all your initiatives driven by the project portfolio optimization lever.
3. Determine the cost optimization objective per initiative.

2.1.4 Identify workforce optimization initiatives

2 hours

1. Review the IT department's strategic workforce plan (SWP) if available, organizational chart, and salaries by role. Do not review IT staffing in terms of named individuals who occupy a given role - focus on functions, roles, and job descriptions.
2. Determine capability gaps:
   1. Rectify efficiency, effectiveness, and other performance issues.
   2. Train IT staff to enhance or improve skills and effectiveness.
   3. Add roles, skills, or headcount to improve effectiveness.
   4. Integrate teams to improve collaboration and reduce redundancies or break out new ones to increase focus/specialization.
   5. Redesign job roles and responsibilities.
   6. Redeploy/reassign staff to other teams.
   7. Conduct layoff (as a last resort, starting by assessing contractual employees).
3. Document cost optimization initiatives that could be driven by workforce optimization objectives in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

Example

Workforce optimization

Some examples to get you started.

Template & Example

List your objectives and initiatives

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to input your workforce optimization initiatives and related objectives:

List your initiatives in the provided Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Enter all your initiatives driven by the workforce optimization lever.
3. Determine the cost optimization objective per initiative.

2.2 Estimate the cost savings of cost optimization initiatives

8 hours

Now that you have identified your initiatives:

1. Review your cost optimization initiatives per lever (Assets, Vendors, Project Portfolio, and Workforce).
2. Determine whether the implementation cost of each of your initiatives is included as part of your budget.
3. Estimate your cost savings.
4. Document your assessment in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

2.2.1 Estimate the costs impacting your asset optimization initiatives

2 hours

1. Review each asset optimization initiative to estimate cost implications.
2. Consider implementation cost in terms of your budget, and document it in the IT Cost Optimization Workbook (see next slides). Is the implementation cost of the underlying initiative considered in your current budget? If not, move to the next initiative. You will assess the flagged initiative independently at a later stage if deemed necessary.
3. Estimate the current cost related to the initiative (including implementation cost), and document it in the IT Cost Optimization Workbook (see next slides). This will be the first of two inputs needed to calculate the initiative's potential cost savings.
4. Estimate the expected cost, post initiative execution, of the underlying initiative, and document it in the IT Cost Optimization Workbook (see next slides). This will be the second and last input needed to calculate the initiative's potential cost savings.

Download the IT Cost Optimization Workbook

Template & Example

Estimate your cost

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete cost estimates for each asset optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine if the implementation cost is considered within the budget.
3. If yes, estimate the current cost, and expected cost of the underlying initiative.

2.2.2 Estimate the costs impacting your vendor optimization initiatives

2 hours

1. Review each vendor optimization initiative to estimate cost implications.
2. Consider implementation cost in terms of your budget, and document it in the IT Cost Optimization Workbook (see next slides). Is the implementation cost of the underlying initiative considered in your current budget? If not, move to the next initiative. You will assess the flagged initiative independently at a later stage if deemed necessary.
3. Estimate the current cost related to the initiative (including implementation cost), and document it in the IT Cost Optimization Workbook (see next slides). This will be the first of two inputs needed to calculate the initiative's potential cost savings.
4. Estimate the expected cost, post initiative execution, of the underlying initiative, and document it in the IT Cost Optimization Workbook (see next slides). This will be the second and last input needed to calculate the initiative's potential cost savings.

Download the IT Cost Optimization Workbook

Template & Example

Estimate your cost

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete cost estimates for each vendor optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine if the implementation cost is considered within the budget.
3. If yes, estimate the current cost, and expected cost of the underlying initiative.

2.2.3 Estimate the costs impacting your project portfolio optimization initiatives

2 hours

1. Review each project portfolio optimization initiative to estimate cost implications.
2. Consider implementation cost in terms of your budget, and document it in the IT Cost Optimization Workbook (see next slides). Is the implementation cost of the underlying initiative considered in your current budget? If not, move to the next initiative. You will assess the flagged initiative independently at a later stage if deemed necessary.
3. Estimate the current cost related to the initiative (including implementation cost), and document it in the IT Cost Optimization Workbook (see next slides). This will be the first of two inputs needed to calculate the initiative's potential cost savings.
4. Estimate the expected cost, post initiative execution, of the underlying initiative, and document it in the IT Cost Optimization Workbook (see next slides). This will be the second and last input needed to calculate the initiative's potential cost savings.

Download the IT Cost Optimization Workbook

Template & Example

Estimate your cost

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete cost estimates for each project portfolio optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine if the implementation cost is considered within the budget.
3. If yes, estimate the current cost, and expected cost of the underlying initiative.

2.2.4 Estimate the costs impacting your workforce optimization initiatives

2 hours

1. Review each workforce optimization initiative to estimate cost implications.
2. Consider implementation cost in terms of your budget, and document it in the IT Cost Optimization Workbook (see next slides). Is the implementation cost of the underlying initiative considered in your current budget? If not, move to the next initiative. You will assess the flagged initiative independently at a later stage if deemed necessary.
3. Estimate the current cost related to the initiative (including implementation cost), and document it in the IT Cost Optimization Workbook (see next slides). This will be the first of two inputs needed to calculate the initiative's potential cost savings.
4. Estimate the expected cost, post initiative execution, of the underlying initiative, and document it in the IT Cost Optimization Workbook (see next slides). This will be the second and last input needed to calculate the initiative's potential cost savings.

Download the IT Cost Optimization Workbook

Template & Example

Estimate your cost

Excel Workbook: IT Cost Optimization –i Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete cost estimates for each workforce optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine if the implementation cost is considered within the budget.
3. If yes, estimate the current cost, and expected cost of the underlying initiative.

Phase 3

Develop Your IT Cost Optimization Roadmap

Phase 1
Understand Your Mandate and Objectives

Phase 2
Outline Your Cost Optimization Initiatives

Phase 3
Develop Your IT Cost Optimization Roadmap

Phase 4
Communicate and Execute

This phase will walk you through the following activities:

• IT cost optimization workbook
• IT cost optimization roadmap

This phase involves the following participants:

• CIO/IT director
• IT finance lead
• IT asset manager
• IT infrastructure manager
• IT vendor management lead
• PMO lead
• IT talent management representative
• Other IT management

Develop your prioritized and aligned cost optimization roadmap

The process of developing your roadmap is where you set final cost optimization priorities, conduct a final rationalization to decide what's in and what's out, and document your proposed plan of action.

First, take a moment to consider if you missed anything. Too often, only the cost cutting elements of the cost optimization equation get attention. Remember that cost optimization also includes making smart investments. Sometimes adding and expanding is better for the business than removing or contracting.

• Do your proposed initiatives help position the organization to recover quickly if you're dealing with a downturn or recession scenario?
• Have you fully considered growth or innovation opportunities that will help optimize costs in the long run?

Feasibility
Eliminate initiatives from the longlist of potential initiatives that cannot be achieved given the cost optimization goals you determined at the beginning of this exercise.

Priority
Rank order the remaining initiatives according to their ability to contribute to goal attainment and dependency relationships with external constraints and one another.

Action Plan
Create an overarching visual roadmap that shows how you intend to achieve your cost optimization goals over the short, medium, and long-term.

3.1 Assess the feasibility of your cost optimization initiatives

4 hours

Now that you have identified your initiatives across the four levers and understood the business impacts:

1. Review each of your cost optimization initiatives and estimate the feasibility in terms of:
   1. Effort required to implement.
   2. Risk: Likelihood of failure and impact on performance.
   3. Approval rights: Within the IT or finance's accountability/domain or not.
2. Document your assessment in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

3.1.1 Estimate the feasibility of your asset optimization initiatives

1 hour

1. Review each asset optimization initiative to estimate feasibility implications.
2. Start by defining the effort required variables. Think in terms of how many dedicated full-time employees you would need to implement the initiative. Document your definition for each of the three variables (High, Medium, or Low) in the IT Cost Optimization Workbook (see next slides). Then, estimate the effort required to implement the related initiative. Consider complexity, scope, and resource availability, before you document it in the IT Cost Optimization Workbook (see next slides).
3. Define your likelihood of failure variables. Think in terms of probability of failure or percent chance the underlying initiative will not succeed. Document your definition for each of the three variables (High, Medium, or Low) in the IT Cost Optimization Workbook (see next slides). Then, estimate the likelihood of failure to implement the related initiative, and document it in the IT Cost Optimization Workbook (see next slides).
4. Consider the initiative's impact on performance. Would implementing the initiative hinder IT or business performance? If you are on a reactive journey, would it impede business recovery in any way, shape, or form? Document the impact (Positive Impact, No Impact, or Negative Impact) in the IT Cost Optimization Workbook (see next slides).
5. Determine who is responsible for approving the initiative. Does it fall within your jurisdiction, responsibility, or accountability? If not, it would mean that it might be more difficult to implement the initiative. Document approval rights (within accountability or not within accountability) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Define your feasibility variables

Excel Workbook: IT Cost Optimization – Define Variables Worksheet

Refer to the example and guidelines below on how to define your feasibility variables for standardization purposes. You can adopt a different definition per optimization lever (Assets, Vendors, Project Portfolio, and Workforce), or maintain the same one across initiatives, depending on what makes sense for your organization:

Define your feasibility variables in the Excel Workbook as per guidelines:

1. Navigate to the Define Variables tab.
2. Review and enter the range of each effort required and likelihood of failure variable as you see fit for your organization.

Template & Example

Estimate your feasibility

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete feasibility estimates for each asset optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate effort required to implement the underlying initiative.
3. Identify the risk of each initiative: likelihood of failure and impact on performance.
4. Choose the adequate approval right classification for each initiative.

3.1.2 Estimate the feasibility of your vendor optimization initiatives

1 hour

1. Review each vendor optimization initiative to estimate feasibility implications, along with previously defined variables (see slides 64 and 65).
2. Consider the initiative's impact on performance. Would implementing the initiative hinder IT or business performance? If you are on a reactive journey, would it impede business recovery in any way, shape, or form? Document the impact (Positive Impact, No Impact, or Negative Impact) in the IT Cost Optimization Workbook (see next slides).
3. Determine who is responsible for approving the initiative. Does it fall within your jurisdiction, responsibility, or accountability? If not, it would mean that it might be more difficult to implement the initiative. Document approval rights (within accountability or not within accountability) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Estimate your feasibility

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete feasibility estimates for each vendor optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate effort required to implement the underlying initiative.
3. Identify the risk of each initiative: likelihood of failure and impact on performance.
4. Choose the adequate approval right classification for each initiative.

3.1.3 Estimate the feasibility of your project portfolio optimization initiatives

1 hour

1. Review each project portfolio optimization initiative to estimate feasibility implications, along with previously defined variables (see slides 64 and 65).
2. Consider the initiative's impact on performance. Would implementing the initiative hinder IT or business performance? If you are on a reactive journey, would it impede business recovery in any way, shape, or form? Document the impact (Positive Impact, No Impact, or Negative Impact) in the IT Cost Optimization Workbook (see next slides).
3. Determine who is responsible for approving the initiative. Does it fall within your jurisdiction, responsibility, or accountability? If not, it would mean that it might be more difficult to implement the initiative. Document approval rights (within accountability or not within accountability) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Estimate your feasibility

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete feasibility estimates for each project portfolio optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate effort required to implement the underlying initiative.
3. Identify the risk of each initiative: likelihood of failure and impact on performance.
4. Choose the adequate approval right classification for each initiative.

3.1.4 Estimate the feasibility of your workforce optimization initiatives

1 hour

1. Review each workforce optimization initiative to estimate feasibility implications, along with previously defined variables (see slides 64 and 65).
2. Consider the initiative's impact on performance. Would implementing the initiative hinder IT or business performance? If you are on a reactive journey, would it impede business recovery in any way, shape, or form? Document the impact (Positive Impact, No Impact, or Negative Impact) in the IT Cost Optimization Workbook (see next slides).
3. Determine who is responsible for approving the initiative. Does it fall within your jurisdiction, responsibility, or accountability? If not, it would mean that it might be more difficult to implement the initiative. Document approval rights (within accountability or not within accountability) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Estimate your feasibility

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete feasibility estimates for each workforce optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate effort required to implement the underlying initiative.
3. Identify the risk of each initiative: likelihood of failure and impact on performance.
4. Choose the adequate approval right classification for each initiative.

3.2 Prioritize cost optimization initiatives to create a final shortlist

4 hours

Now that you have your cost and feasibility for each cost optimization initiative:

1. Review each of your cost optimization initiatives and estimate the time and priority by considering:
   1. Preliminary priority assessment based on your cost and feasibility input.
   2. Time frame: start and end date of each initiative.
   3. Current budget cycle: time remaining in the current budget cycle and potential cost savings in this fiscal year.
2. Determine the final priority of the initiative and decide whether you want to include it in your 12-month roadmap.
3. Document your assessment in the IT Cost Optimization Workbook.

Download the IT Cost Optimization Workbook

3.2.1 Prioritize your asset optimization initiatives

1 hour

1. Review each asset optimization initiative to set the priority.
2. Validate your cost and feasibility estimates and consider the automated evaluation, in the IT Cost Optimization Workbook, providing you with a preliminary priority based on your cost and feasibility estimates (see next slides).
3. Revisit your overarching goals (step 1.4) as you will assess the time it will take you to complete your initiatives and prioritize accordingly.
4. Determine your start and end date for each initiative based on your journey, objectives, and overarching goals. Consider the urgency of each initiative. Document the quarter and year for your start and end dates in the IT Cost Optimization Workbook (see next slides).
5. Identify the time remaining in your current budget cycle after the completion of each initiative to get a cost savings estimate for the current fiscal year. Document the number of remaining quarters (0, 1, 2, 3, or 4) in the IT Cost Optimization Workbook (see next slides).
6. Decide on the priority of each initiative (High, Medium, or Low), and document it in the IT Cost Optimization Workbook (see next slides).
7. Revisit the priority decision after prioritizing all your initiatives and determine which ones to include in your 12-month roadmap; consider the number of initiatives you can tackle at the same time within a 12-month period. Document your final decision (Yes or No) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Understand your priority assessment

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how the preliminary priority assessment is assigned, for each asset optimization initiative, noting that columns Q to X are hidden automatic calculations and should not be touched:

Review the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Validate cost and feasibility estimates (columns I to P previously filled - steps 2.2 and 3.1) driving the Priority Score and Preliminary Priority Assessment.

Template & Example

Priority threshold rationale

Excel Workbook: IT Cost Optimization – Define Priority Threshold Worksheet

Refer to the screenshot of the Define Priority Threshold worksheet below to understand the rationale behind the priority score and priority level:

Template & Example

Estimate your timeline

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete timeline estimates for each asset optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate quarter and year to start and complete the initiative.
3. Identify the time remaining in your current budget cycle after the completion of the initiative.

Template & Example

Make your final decisions

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to assign the final priority for each asset optimization initiative, and include it in your 12-month roadmap:

• Estimated cost savings per year refer to cost savings fully realized by the end of the upcoming fiscal year, following the initiatives' implementation.
• Estimated cost savings in the current budget cycle, refer to cost savings partially realized in the current fiscal year, after the initiatives' implementation.

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the final priority of the initiative.
3. Decide whether you want to include the initiative in your 12-month roadmap.

3.2.2 Prioritize your vendor optimization initiatives

1 hour

1. Review each vendor optimization initiative to set the priority.
2. Validate your cost and feasibility estimates and consider the automated evaluation, in the IT Cost Optimization Workbook, providing you with a preliminary priority based on your cost and feasibility estimates (see next slides).
3. Revisit your overarching goals (step 1.4) as you will assess the time it will take you to complete your initiatives and prioritize accordingly.
4. Determine your start and end date for each initiative based on your journey, objectives, and overarching goals. Consider the urgency of each initiative. Document the quarter and year for your start and end dates in the IT Cost Optimization Workbook (see next slides).
5. Identify the time remaining in your current budget cycle after the completion of each initiative to get a cost savings estimate for the current fiscal year. Document the number of remaining quarters (0, 1, 2, 3, or 4) in the IT Cost Optimization Workbook (see next slides).
6. Decide on the priority of each initiative (High, Medium, or Low), and document it in the IT Cost Optimization Workbook (see next slides).
7. Revisit the priority decision after prioritizing all your initiatives and determine which ones to include in your 12-month roadmap; consider the number of initiatives you can tackle at the same time within a 12-month period. Document your final decision (Yes or No) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Understand your priority assessment

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how the preliminary priority assessment is assigned, for each vendor optimization initiative, noting that columns Q to X are hidden automatic calculations and should not be touched:

Review the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Validate cost and feasibility estimates (columns I to P previously filled - steps 2.2 and 3.1) driving the Priority Score and Preliminary Priority Assessment.

Template & Example

Priority Threshold Rationale

Excel Workbook: IT Cost Optimization – Define Priority Threshold Worksheet

Refer to the screenshot of the Define Priority Threshold worksheet below to understand the rationale behind the Priority Score and Priority Level:

Template & Example

Estimate your timeline

Excel Workbook: IT Cost Optimization – Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete timeline estimates for each vendor optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate quarter and year to start and complete the initiative.
3. Identify the time remaining in your current budget cycle after the completion of the initiative.

Template & Example

Make your final decisions

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how to assign the final priority for each vendor optimization initiative, and include it in your 12-month roadmap:

• Estimated cost savings per year refer to cost savings fully realized by the end of the upcoming fiscal year, following the initiatives' implementation.
• Estimated cost savings in the current budget cycle, refer to cost savings partially realized in the current fiscal year, after the initiatives' implementation.

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the final priority of the initiative.
3. Decide whether you want to include the initiative in your 12-month roadmap.

3.2.3 Prioritize your project portfolio optimization initiatives

1 hour

1. Review each project portfolio optimization initiative to set the priority.
2. Validate your cost and feasibility estimates and consider the automated evaluation, in the IT Cost Optimization Workbook, providing you with a preliminary priority based on your cost and feasibility estimates (see next slides).
3. Revisit your overarching goals (step 1.4) as you will assess the time it will take you to complete your initiatives and prioritize accordingly.
4. Determine your start and end date for each initiative based on your journey, objectives, and overarching goals. Consider the urgency of each initiative. Document the quarter and year for your start and end dates in the IT Cost Optimization Workbook (see next slides).
5. Identify the time remaining in your current budget cycle after the completion of each initiative to get a cost savings estimate for the current fiscal year. Document the number of remaining quarters (0, 1, 2, 3, or 4) in the IT Cost Optimization Workbook (see next slides).
6. Decide on the priority of each initiative (High, Medium, or Low), and document it in the IT Cost Optimization Workbook (see next slides).
7. Revisit the priority decision after prioritizing all your initiatives and determine which ones to include in your 12-month roadmap; consider the number of initiatives you can tackle at the same time within a 12-month period. Document your final decision (Yes or No) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Understand your priority assessment

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how the preliminary priority assessment is assigned, for each project portfolio optimization initiative, noting that columns Q to X are hidden automatic calculations and should not be touched:

Review the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Validate cost and feasibility estimates (columns I to P previously filled - steps 2.2 and 3.1) driving the Priority Score and Preliminary Priority Assessment.

Template & Example

Priority Threshold Rationale

Excel Workbook: IT Cost Optimization - Define Priority Threshold Worksheet

Refer to the screenshot of the Define Priority Threshold worksheet below to understand the rationale behind the Priority Score and Priority Level:

Template & Example

Estimate your timeline

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete timeline estimates for each project portfolio optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate quarter and year to start and complete the initiative.
3. Identify the time remaining in your current budget cycle after the completion of the initiative.

Template & Example

Make your final decisions

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how to assign the final priority for each project portfolio optimization initiative and include it in your 12-month roadmap:

• Estimated cost savings per year refer to cost savings fully realized by the end of the upcoming fiscal year, following the initiatives' implementation.
• Estimated cost savings in the current budget cycle, refer to cost savings partially realized in the current fiscal year, after the initiatives' implementation.

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the final priority of the initiative.
3. Decide whether you want to include the initiative in your 12-month roadmap.

3.2.4 Prioritize your workforce optimization initiatives

1 hour

1. Review each workforce optimization initiative to set the priority.
2. Validate your cost and feasibility estimates and consider the automated evaluation, in the IT Cost Optimization Workbook, providing you with a preliminary priority based on your cost and feasibility estimates (see next slides).
3. Revisit your overarching goals (step 1.4) as you will assess the time it will take you to complete your initiatives and prioritize accordingly.
4. Determine your start and end date for each initiative based on your journey, objectives, and overarching goals. Consider the urgency of each initiative. Document the quarter and year for your start and end dates in the IT Cost Optimization Workbook (see next slides).
5. Identify the time remaining in your current budget cycle after the completion of each initiative to get a cost savings estimate for the current fiscal year. Document the number of remaining quarters (0, 1, 2, 3, or 4) in the IT Cost Optimization Workbook (see next slides).
6. Decide on the priority of each initiative (High, Medium, or Low), and document it in the IT Cost Optimization Workbook (see next slides).
7. Revisit the priority decision after prioritizing all your initiatives and determine which ones to include in your 12-month roadmap; consider the number of initiatives you can tackle at the same time within a 12-month period. Document your final decision (Yes or No) in the IT Cost Optimization Workbook (see next slides).

Download the IT Cost Optimization Workbook

Template & Example

Understand your priority assessment

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how the preliminary priority assessment is assigned, for each workforce optimization initiative, noting that columns Q to X are hidden automatic calculations and should not be touched:

Review the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Validate cost and feasibility estimates (columns I to P previously filled - steps 2.2 and 3.1) driving the Priority Score and Preliminary Priority Assessment.

Template & Example

Priority Threshold Rationale

Excel Workbook: IT Cost Optimization - Define Priority Threshold

Refer to the screenshot of the Define Priority Threshold worksheet below to understand the rationale behind the Priority Score and Priority Level:

Template & Example

Estimate your timeline

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how to complete timeline estimates for each workforce optimization initiative:

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the appropriate quarter and year to start and complete the initiative.
3. Identify the time remaining in your current budget cycle after the completion of the initiative.

Template & Example

Make your final decisions

Excel Workbook: IT Cost Optimization - Outline Initiatives Worksheet

Refer to the example and guidelines below on how to assign the final priority for each workforce optimization initiative, and include it in your 12-month roadmap:

• Estimated cost savings per year refer to cost savings fully realized by the end of the upcoming fiscal year, following the initiatives' implementation.
• Estimated cost savings in the current budget cycle, refer to cost savings partially realized in the current fiscal year, after the initiatives' implementation.

Complete the following fields for each initiative in the Excel Workbook as per guidelines:

1. Navigate to the Outline Initiatives tab.
2. Determine the final priority of the initiative.
3. Decide whether you want to include the initiative in your 12-month roadmap.

3.3 Develop your cost optimization roadmap

1 hour

1. Conduct a final evaluation of your timeline, priority decision, and initiatives you wish to include in your 12-month roadmap. Do they make sense, are they achievable, and do they all contribute individually and collectively to reaching your cost optimization goals?
2. Review your 12-month roadmap outputs in the IT Cost Optimization Workbook (see next slides).
3. Make adjustments to your 12-month roadmap by adding or removing initiatives as you deem necessary (step 3.2).
4. Document your final roadmap - including initiatives and relative time frames for execution - in the IT Cost Optimization Roadmap templates provided (see slide 97). The 12-month roadmap outputs from the IT Cost Optimization Workbook (see next slide) can facilitate this task.

Download the IT Cost Optimization Workbook

Template & Example

Potential Cost Savings Per Year

Excel Workbook: IT Cost Optimization - Outline Initiatives Charts Worksheet

Refer to the example below on charts depicting different views of estimated cost savings per year across the four optimization levers (Assets, Vendors, Project Portfolio, and Workforce) that could help you in your assessment and decision making.

From the Excel Workbook, after completing your potential initiatives and filling all related entries in the Outline Initiatives tab:

1. Navigate to the Outline Initiatives Charts tab.
2. Review each of the charts.
3. Navigate back to the Outline Initiatives tab to examine, drill down, and amend individual initiative entries or final decisions as you deem necessary.

Template & Example

12-month Roadmap Outputs

Excel Workbook: IT Cost Optimization - Diagram Results, List Results, and Timeline Result Worksheets

Refer to the example below depicting different roadmap output that could help you in presentations, assessment, and decision making.

From the Excel Workbook:

1. Navigate to the Diagram Results tab. This bubble diagram represent cost optimization initiatives by objective where each bubble size is determined by its estimated cost saving per year.
2. Navigate to the List Results tab. You will find a list of the cost optimizations initiatives you've chosen to include in your roadmap and related charts.
3. Navigate to the Timeline Result tab. This Gantt chart is a timeline view of the cost optimizations initiatives you've chosen to include in your roadmap.

Download the IT Cost Optimization Workbook

Phase 4

Communicate and Execute

Phase 1
Understand Your Mandate and Objectives

Phase 2
Outline Your Cost Optimization Initiatives

Phase 3
Develop Your IT Cost Optimization Roadmap

Phase 4
Communicate and Execute

This phase will walk you through the following activities:

• Cost optimization communication plan
• Cost optimization executive presentation

This phase involves the following participants:

• CIO/IT director
• IT finance lead
• PMO lead
• Other IT management

Build Your IT Cost Optimization Roadmap

4.1 Build the communication plan

45 to 60 minutes

1. Use the Cost Optimization Communication Plan templates and guidance on the following slides.
2. Complete the template to develop your communication plan for your cost optimization proposal and initiatives. At a minimum, it should include:
   1. Steps for preparing and presenting your proposal to decision-makers, sponsors, and other stakeholders, including named presenters and points of contact in IT.
   2. Checkpoints for communication throughout the execution of each initiative and the cost optimization roadmap overall, including target audiences, accountabilities, modes and methods of communication, type/scope of information to be communicated at each checkpoint, and any decision/approval steps.

Download the IT Cost Optimization Workbook

Understand a communication strategy's purpose

Put as much effort into developing your communication strategy as you would into planning and executing the cost optimization initiatives themselves. Don't skip this part.

Your communication strategy has two major components ...

1. A tactical plan for how and when you'll communicate with stakeholders about your proposals, activities, and progress toward meeting cost optimization goals.
2. An executive or board presentation that outlines your final proposed cost optimization initiatives, their respective business cases, and resources/support required with the goal of gaining approval to execute.

Your communication strategy will need to ...

• Provide answers to the "What's in it for me?" question from all impacted stakeholders.
• Roles, responsibilities, and accountabilities before, during, and after initiatives are completed.
• Descriptions and high-level information about dates, deliverables, and impacts of the specific changes being made.

You will also develop more detailed operational and project plans for each initiative. IT will use these plans to manage and track the execution of individual initiatives when the time comes.

Template & Example

Document the overall what and why of your planned communications

Template & Example

Next, note the who, how, and when of your communication plan

4.2 Build the executive presentation

45-60 minutes

1. Download Info-Tech's IT Cost Optimization Roadmap Samples and Templates.
2. Update the content with the outputs of your cost optimization roadmap and data/graph elements from the IT Cost Optimization Workbook. Refer to your organization's standards and norms for executive-level presentations and adapt accordingly.

Download IT Cost Optimization Roadmap Samples and Templates

Summary of Accomplishment

Congratulations! You now have an IT cost optimization strategy and a communication plan.

Throughout this blueprint, you have:

1. Identified your IT mandate and cost optimization journey.
2. Outlined your initiatives across the four levers (assets, vendors, project portfolio, and workforce).
3. Put together a 12-month IT cost optimization roadmap.
4. Developed a communication strategy and crafted an executive presentation - your initial step to communicate and discuss IT cost optimization initiatives with your key stakeholders.

What's next?

Communicate with your stakeholders, then follow your internal project policies and procedures to get the necessary approvals as required. Once obtained, you can start the execution and implementation of your IT cost optimization strategy.

If you would like additional support, have our analysts guide you through other phases as part of an Info-Tech workshop.

Contact your account representative for more information.

workshops@infotech.com
1-888-670-8889

Research Contributors and Experts

Jennifer Perrier
Principal Research Director, IT Financial Management
Info-Tech Research Group

Jack Hakimian
Senior Vice President, Research Development
Info-Tech Research Group

Graham Price
Senior Executive Counselor, Executive Services
Info-Tech Research Group

Travis Duncan
Research Director, Project & Portfolio Management
Info-Tech Research Group

Dave Kish
Practice Lead, IT Financial Management
Info-Tech Research Group

Baird Miller, PhD
Senior Executive Advisor, Executive Services
Info-Tech Research Group

Other Research Contributors and Experts

Monica Braun
Research Director, IT Financial Management
Info-Tech Research Group

Sandi Conrad
Principal Advisory Director, Infrastructure & Operations
Info-Tech Research Group

Phil Bode
Principal Advisory Director, Vendor Management
Info-Tech Research Group

Donna Glidden
Advisory Director, Vendor Management
Info-Tech Research Group

Barry Cousins
Distinguished Analyst & Research Fellow
Info-Tech Research Group

Andrew Sharp
Research Director, Infrastructure & Operations Practice
Info-Tech Research Group

Frank Sewell
Advisory Director, Vendor Management
Info-Tech Research Group

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Bibliography

"A Short Guide to Structured Cost Reduction." National Audit Office, 18 June 2010. Web.

"IT Cost Savings: A Guide to Application Rationalization." LeanIX, 2021. Web.

Jouravlev, Roman. "Service Financial Management: ITIL 4 Practice Guide." Axelos, 30 April 2020. Web.

Leinwand, Paul, and Vinay Couto. "How to Cut Costs More Strategically." Harvard Business Review, March 2017. Web.

"Role & Influence of the Technology Decision-Maker 2022." Foundry, 2022. Web.

"State of the CIO 2022." CIO, 2022. Web.

"The Definitive Guide to IT Cost Optimization." LeanIX, n.d. Web.

"Understand the Principles of Cost Optimization." Google Cloud, n.d. Web.

Master the Secrets of Adobe’s Creative Cloud Contracts to Right-Size Your Adobe Spend

Learn the essential steps to avoid overspending and to maximize negotiation leverage with Adobe.

ANALYST PERSPECTIVE

Only 18% of Adobe licenses are genuine copies: are yours?

"Adobe has designed and executed the most comprehensive evolution to the subscription model of pre-cloud software publishers with Creative Cloud. Adobe's release of Document Cloud (replacement for the Acrobat series of software) is the final nail in the coffin for legacy licensing for Adobe. Technology procurement functions have run out of time in which to act while they still retain leverage, with the exception of some late adopter organizations that were able to run on legacy versions (e.g. CS6) for the past five years. Procuring Adobe software is not the same game as it was just a few years ago. Adopt a comprehensive approach to understanding Adobe licensing, contract, and delivery models in order to accurately forecast your software needs, transact against the optimal purchase plan, and maximize negotiation leverage. "

Scott Bickley

Research Lead, Vendor Practice

Info-Tech Research Group

Our understanding of the problem

This Research is Designed For:

• IT managers scoping their Adobe licensing requirements and compliance position.
• CIOs, CTOs, CPOs, and IT directors negotiating licensing agreements in search of cost savings.
• ITAM/Software asset managers responsible for tracking and managing Adobe licensing.
• IT and business leaders seeking to better understand Adobe licensing options (Creative Cloud).
• Vendor management offices in the process of a contract renewal.

This Research Will Help You:

• Understand and simplify licensing per product to help optimize spend.
• Ensure agreement type is aligned to needs.
• Navigate the purchase process to negotiate from a position of strength.
• Manage licenses more effectively to avoid compliance issues, audits, and unnecessary purchases.

This Research Will Also Assist:

• CFOs and the finance department
• Enterprise architects
• ITAM/SAM team
• Network and IT architects
• Legal
• Procurement and sourcing

This Research Will Help Them:

• Understand licensing methods in order to make educated and informed decisions.
• Understand the future of the cloud in your Adobe licensing roadmap.

Executive summary

Situation

• Adobe’s dominant market position and ownership of the creative software market is forcing customers to refocus the software acquisition process to ensure a positive ROI on every license.
• In early 2017, Adobe announced it would stop selling perpetual Creative Suite 6 products, forcing future purchases to be transitioned to the cloud.

Complication

• Adobe operates in its own niche in the creative space, and Adobe users have grown accustomed to their products, making switching very difficult.
• With transition to a cloud-based subscription model, organizations need to actively manage licenses, software provisioning, and consumption.
• Without a detailed understanding of Adobe’s various purchasing models, overspending often occurs.
• Organizations have experienced issues in identifying commercial licensed packages with their install files, making it difficult to track and assign licenses.

Resolution

• Gain visibility into license deployments and needs with a strong SAM program/tool; this will go a long way toward optimizing spend.
• Number of users versus number of installs are not the same, and confusing the two can result in overspending. Device-based licensing historically would have required two licenses, but now only one may be required.
• Ensure compliance with internal audits. Adobe has a very high rate of piracy stemming from issues such as license overuse, misunderstanding of contract language, using cracks/keygens, virtualized environments, indirect access, and sharing of accounts.
• A handful of products are still sold as perpetual – Acrobat Standard/Pro, Captivate, ColdFusion, Photoshop, and Premiere Elements – but be aware of what is being purchased and used in the organization.
• Beware of products deployed on server, where the number of users accessing that product cannot easily be counted.

Info-Tech Insight

1. Your user-need analysis has shifted in the new subscription-based model. Determine which products are needed versus nice to have to prevent overspending on the Creative Cloud suite.
2. Examine what you need, not what you have. You can no longer mix and match applications.
3. Compliance is not automatic with products that are in the cloud. Shared logins or computers with desktop installs that can be accessed by multiple users can cause noncompliance.

The aim of this blueprint is to provide a foundational understanding of Adobe

Why Adobe

In 2011 Adobe took the strategic but radical move toward converting its legacy on-premises licensing to a cloud-based subscription model, in spite of material pushback from its customer base. While revenues initially dipped, Adobe’s resolve paid off; the transition is mostly complete and revenues have doubled. This was the first enterprise software offering to effect the transition to the cloud in a holistic manner. It now serves as a case study for those following suit, such as Microsoft, Autodesk, and Oracle.

What to know

Adobe elected to make this market pivot in a dramatic fashion, foregoing a gradual transition process. Enterprise clients were temporarily allowed to survive on legacy on-premises editions of Adobe software; however, as the Adobe Creative Cloud functionality was quickly enhanced and new applications were launched, customer capitulation to the new subscription model was assured.

The Future

Adobe is now leveraging the power of connected customers, the availability of massive data streams, and the ongoing digitalization trend globally to supplement the core Creative Cloud products with online services and analytics in the areas of Creative Cloud for content, Marketing Cloud for marketers, and Document Cloud for document management and workflows. This blueprint focuses on Adobe's Creative Cloud and Document Cloud solutions and the enterprise term license agreement (ETLA).

Info-Tech Insight

Beware of your contract being auto-renewed and getting locked into the quantities and product subset that you have in your current agreement. Determining the number of licenses you need is critical. If you overestimate, you're locked in for three years. If you underestimate, you have to pay a big premium in the true-up process.

Learn the “Adobe way,” whether you are reviewing existing spend or considering the purchase of new products

1. Legacy on-premises Adobe Creative Suite products used to be available in multiple package configurations, enabling right-sized spend with functionality. Adobe’s support for legacy Creative Suites CS6 products ended in May 2017.
2. While early ETLAs allowed customer application packaging at a lower price than the full Creative Cloud suite, this practice has been discontinued. Now, the only purchasing options are the full suite or single-application subscriptions.
3. Buyers must now assess alternative Adobe products as an option for non-power users. For example, QuarkXPress, Corel PaintShop Pro, CorelDRAW, Bloom, and Affinity Designer are possible replacements for some Creative Cloud applications.
4. Document Cloud, Adobe’s latest step in creating an Acrobat-focused subscription model, limits the ability to reduce costs with an extended upgrade cycle. These changes go beyond the licensing model.
5. Organizations need to perform a cost-benefit analysis of single app purchases vs. the full suite to right-size spend with functionality.

As Adobe’s dominance continues to grow, organizations must find new ways to maintain a value-added relationship

Adobe estimates the total addressable market for creative and document cloud to be $21 billion. With no sign of growth slowing down, Adobe customers must learn how to work within the current design monopoly.

Source: Adobe, 2017

"Adobe is not only witnessing a steady increase in Creative Cloud subscriptions, but it also gained more visibility into customers’ product usage, which enables it to consistently push out software updates relevant to user needs. The company also successfully transformed its sales organization to support the recurring revenue model."

– Omid Razavi, Global Head of Success, ServiceNow

Consider your route forward

Consider your route forward, as ETLA contract commitments, scope, and mechanisms differ in structure to the perpetual models previously utilized. The new model shortchanges technology procurement leaders in their expectations of cost-usage alignment and opex flexibility (White, 2016).

☑ Implement a user profile to assign licenses by version and limit expenditures. Alternatives can include existing legacy perpetual and Acrobat classic versions that may already be owned by the organization.

☑ Examine the suitability and/or dependency on Document Cloud functions, such as existing business workflows and e-signature integration.

☑ Involve stakeholders in the evaluation of alternate products for use cases where dependency on Acrobat-specific functionality is limited.

☑ Identify not just the installs and active use of the applications but also the depth and breadth of use across the various features so that the appropriate products can be selected.

Use Info-Tech’s Adobe toolkit to prepare for your new purchases or contract renewal

Info-Tech Insight

IT asset management (ITAM) and software asset management (SAM) are critical! An error made in a true-up can cost the organization for the remaining years of the ETLA. Info-Tech worked with one client that incurred a $600k error in the true-up that they were not able to recoup from Adobe.

Apply licensing best practices and examine the potential for cost savings through an unbiased third-party perspective

Establish Licensing Requirements

• Understand Adobe’s product landscape and transition to cloud.
• Analyze users and match to correct Adobe SKU.
• Conduct an internal software assessment.
• Build an effective licensing position.

Evaluate Licensing Options

• Value Incentive Plan (VIP)
• Cumulative Licensing Program (CLP)
• Transactional Licensing Program (TLP)
• Enterprise Term License Agreement (ETLA)

Evaluate Agreement Options

• Price
• Discounts
• Price protection
• Terms and conditions

Purchase and Manage Licenses

• Learn negotiation tactics to enhance your current strategy.
• Control the flow of communication.
• Assign the right people to manage the environment.

Preventive practices can help find measured value ($)

Time and resource disruption to business if audited

Lost estimated synergies in M&A

Cost of new licensing

Cost of software audit, penalties, and back support

Lost resource allocation and time

Third party, legal/SAM partners

Cost of poor negotiation tactics

Lost discount percentage

Terms and conditions improved

Explore Adobe licensing and optimize spend – project overview

PHASE 1

Manage Your Adobe Agreements

Phase 1 outline

Call 1-888-670-8889 or email GuidedImplementations@InfoTech.com for more information.

Complete these steps on your own, or call us to complete a guided implementation. A guided implementation is a series of 2-3 advisory calls that help you execute each phase of a project. They are included in most advisory memberships.

Adobe’s Cloud – Snapshot of what has changed

1. Since Adobe has limited the procurement and licensing options with the introduction of Creative Cloud, there are three main choices:
1. Direct online purchase at Adobe.com
2. Value Incentive Plan (VIP): Creative Cloud for teams–based purchase with a volume discount (minimal, usually ~10%); may have some incentives or promotional pricing
3. Enterprise Term License Agreement (ETLA): Creative Cloud for Enterprise (CCE)
2. Adobe has discontinued support for legacy perpetual licenses, with the latest version being CS6, which is steering organizations to prioritize their options for products in the creative and document management space.
3. Document Cloud (DC) is the cloud product replacing the Acrobat perpetual licensing model. DC extends the subscription-based model further and limits options to extend the lifespan of legacy on-premises licenses through a protracted upgrade process.
4. The subscription model, coupled with limited discount options on transactional purchases, forces enterprises to consider the ETLA option. The ETLA brings with it unique term commitments, new pricing structures, and true-up mechanisms and inserts the "land and expand" model vs. license reassignment.

Info-Tech Insight

Adobe’s move from a perpetual license to a per-user subscription model can be positive in some scenarios for organizations that experienced challenges with deployment, management of named users vs. devices, and license tracking.

Core concepts of Adobe agreements: Discounting, pricing, and bundling

ETLA

Adobe has been systematically reducing discounts on ETLAs as they enter the second renewal cycle of the original three-year terms.

Adobe Cloud Bundling

Adobe cloud services are being bundled with ETLAs with a mandate that companies that do not accept the services at the proposed cost have Adobe management’s approval to unbundle the deal, generally with no price relief.

Custom Bundling

The option for custom bundling of legacy Creative Suite component applications has been removed, effectively raising the price across the board for licensees that require more than two Adobe applications who must now purchase the full Creative Cloud suite.

Higher and Public Education

Higher education/public education agreements have been revamped over the past couple of years, increasing prices for campus-wide agreements by double-digit percentages (~10-30%+). While they still receive an 80% discount over list price, IT departments in this industry are not prepared to absorb the budget increase.

Info-Tech Insight

Adobe has moved to an all-or-one bundle model. If you need more than two application products, you will likely need to purchase the full Creative Cloud suite. Therefore, it is important to focus on creating accurate user profiles to identify usage needs.

Use Info-Tech’s Adobe deployment tool for SAM: Track deployment and needs

Use Info-Tech’s Adobe deployment tool for SAM: Audit

Use Info-Tech’s Adobe deployment tool for SAM: Cost

Use Info-Tech’s tools to compare ETLA vs. VIP and to document forecasted costs and benefits

Is the ETLA or VIP option better for your organization?

Use Info-Tech’s Adobe ETLA vs. VIP Pricing Table tool to compare ETLA costs against VIP costs.

Your ETLA contains multiple products and is a multi-year agreement.

Use Info-Tech’s ETLA Forecasted Costs and Benefits tool to forecast your ETLA costs and document benefits.

Adobe’s Creative Cloud Complete offering provides access to all Adobe creative products and ongoing upgrades

Why subscription model?

The subscription model forces customers to an annuity-based pricing model, so Adobe has recurring revenue from a subscription-based product. This increases customer lifetime value (CLTV) for Adobe while providing ongoing functionality updates that are not version/edition dependent.

Key Characteristics:

• Available as a month-to-month or annual subscription license
• Can be purchased for one user, for a team, or for an enterprise
• Subject to annual payment and true-up of license fees
• Can only true-up during lifespan of contract; quantities cannot be reduced until renewal
• May contain auto-renewal clauses – beware!

Key things to know:

1. Applications can be purchased individually if users require only one specific product. A few products continue to have on-premises licensing options, but most are offered by per-user subscriptions.
2. At the end of the subscription period, the organization no longer has any rights to the software and would have to return to a previously owned version.
3. True-downs are not possible (in contrast to Microsoft’s Office 365).
4. Downgrade rights are not included or are limited by default.

Which products are in the Creative Cloud bundle?

Adobe Acrobat® XI Pro

Adobe After Effects® CC

Adobe Audition® CC

Adobe Digital Publishing Suite, Single Edition

Adobe InDesign® CC

Adobe Dreamweaver® CC

Adobe Edge Animate

Adobe Edge Code preview

Adobe Edge Inspect

Adobe Photoshop CC

Adobe Edge Reflow preview

Adobe Edge Web Fonts

Adobe Extension Manager

ExtendScript Toolkit

Adobe Fireworks® CS6

Adobe Flash® Builder® 4.7 Premium Edition

Adobe Flash Professional CC

Adobe Illustrator® CC

Adobe Prelude® CC

Adobe Premiere® Pro CC

Adobe Scout

Adobe SpeedGrade® CC

Adobe Muse CC

Adobe Photoshop Lightroom 6

Adobe offers different solutions for teams vs. enterprise licensing

Evaluate the various options for Creative Cloud, as they can be purchased individually, for teams, or for enterprise.

For further information on specific functionality differences, reference Adobe’s comparison table.

A Cloud-ish solution: Considerations and implications for IT organizations

☑ True cloud products are typically service-based, scalable and elastic, shared resources, have usage metering, and rely upon internet technologies. Currently, Adobe’s Creative Cloud and Document Cloud products lack these characteristics. In fact, the core products are still downloaded and physically installed on endpoint devices, then anchored to the cloud provisioning system, where the software can be automatically updated and continuously verified for compliance by ensuring the subscription is active.

☑ Adobe Cloud allows Adobe to increase end-user productivity by releasing new features and products to market faster, but the customer will increase lock-in to the Adobe product suite. The fast-release approach poses a different challenge for IT departments, as they must prepare to test and support new functionality and ensure compatibility with endpoint devices.

☑ There are options at the enterprise level that enable IT to exert more granular control over new feature releases, but these are tied to the ETLA and the provided enterprise portal and are not available on other subscription plans. This is another mechanism by which Adobe has been able to spur ETLA adoption.

☑ Not all CIOs consider SaaS/subscription applications their first choice, but the Adobe’s dominant position in the content and document management marketplace is forcing the shift regardless. It is significant that Adobe bypassed the typical hybrid transition model by effectively disrupting the ability to continue with perpetual licensing without falling behind the functionality curve.

☑ VIP plans do allow for annual terms and payment, but you lose the price elasticity that comes with multi-year terms.

Download Info-Tech’s Adobe ETLA vs. VIP Pricing Table tool to compare ETLA costs against VIP costs.

When moving to Adobe cloud, validate that license requirements meet organizational needs, not a sales quota

Follow these steps in your transition to Creative Cloud.

Step 1: Make sure you have a software asset management (SAM) tool to determine Adobe installs and usage within your environment.

Step 2: Look at the current Adobe install base and usage. We recommend reviewing three months’ worth of reliable usage data to decide which users should have which licenses going forward.

Step 3: Understand the changes in Adobe packages for Creative Cloud (CC). Also, take into account that the license types are based on users, not devices.

Step 4: Identify those users who only need a single license for a single application (e.g. Photoshop, InDesign, Muse).

Step 5: Identify the users who require CC suites. Look at their usage of previous Adobe suites to get an idea of which CC suite they require. Did they have Design Suite Standard installed but only use one or two elements? This is a good way to ensure you do not overspend on Adobe licenses.

Source: The ITAM Review

Download Info-Tech’s Adobe ETLA Deployment Forecast tool to track Adobe installs within your environment and to determine usage needs.

Acquiring Adobe Software

Adobe offers four common licensing methods, which are reviewed in detail in the following slides.

"Customers are not even obliged to manage all the licenses themselves. The reseller partners have access to the cloud console and can manage licenses on behalf of their customers. Even better, they can seize cross and upsell opportunities and provide good insight into the environment. Additionally, Adobe itself provides optimization services."

– B-lay

CLP and TLP

The CLP and TLP are transactional agreements generally used for the purchase of perpetual licenses. For example, they could be used for making Acrobat purchases if Creative Suite products are purchased on the ETLA.

Source: “Adobe Buying Programs Comparison Guide for Commercial and Government Organizations”

VIP and ETLA

The Value Incentive Plan is aimed at small- to medium-sized organizations with no minimum quantity required. However, there is limited flexibility to reduce licenses and limited price protection for future purchases. The ETLA is aimed at large organizations who wish to have new functionality as it comes out, license management portal, services, and security/IT control aspects.

Source: “Adobe Buying Programs Comparison Guide for Commercial and Government Organizations”

ETLA commitments risk creating “shelfware-as-a-service”

The Adobe ETLA’s rigid contract parameters, true-up process, and unique deployment/provisioning mechanisms give technology/IT procurement leaders fewer options to maximize cost-usage alignment and to streamline opex costs.

☑ No ETLA price book is publicly published; pricing is controlled by the Adobe enterprise sales team.

☑ Adobe's retail pricing is a good starting point for negotiating discounted pricing.

☑ ETLA commitments are usually for three years, and the lack of a true-down option increases the risk involved in overbuying licenses should the organization encounter a business downturn or adverse event.

☑ Pricing discounts are the highest at the initial ETLA signing for the upfront volume commitment. The true-up pricing is discounted from retail but still higher than the signing cost per license.

☑ Technical support is included in the ETLA.

☑ While purchases typically go through value-added resellers (VARs), procurement can negotiate directly with Adobe.

"For cloud products, it is less complex when it comes to purchasing and pricing. If larger quantities are purchased on a longer term, the discount may reach up to 15%. As soon as you enroll in the VIP program, you can control all your licenses from an ‘admin console’. Any updates or new functionalities are included in the original price. When the licenses expire, you may choose to renew your subscriptions or remove them. Partial renewal is also accepted. Of course, you can also re-negotiate your price if more subscriptions are added to your console."

– B-lay

ETLA recommendations

1. Assess the end-user requirements with a high degree of scrutiny. Perform an analysis that matches the licensee with the correct Adobe product SKU to reduce the risk of overspending.

• Leverage metering data that identifies actual usage and lack thereof, match to user profile functional requirements, and then determine end users’ actual license requirements.

• Demand price transparency and granularity in the proposal process.
• Validate that volume discounts are appropriate and show through to the true-up line item pricing.

INFO-TECH TIP: For further guidance on ETLAs and pricing, contact your Info-Tech representative to set up a call with an analyst.

Use Info-Tech’s Adobe ETLA Deployment Forecast tool to match licensees with Adobe product SKUs.

Prepare for Adobe’s true-up process

How the true-up process works

When adding a license, the true-up price will be prorated to 50% of the license cost for previous year’s usage plus 100% of the license cost for the next year. This back-charging adds up to 150% of the overall true-up license cost. In some rare cases, Adobe has provided an “unlimited” quantity for certain SKUs; these Unlimited ETLAs generally align with FTE counts and limit FTE increases to about 5%. Procurement must monitor and work with SAM/ITAM and stakeholder groups to restrain unnecessary growth during the term of an Unlimited ETLA to avoid the risk of cost escalation at renewal time.

Higher-education specific

Higher-education clients can license under the ETLA based on a prescribed number of user and classroom/lab devices and/or on a FTE basis. In these cases, the combination of Creative Cloud and Acrobat Pro volume must equal the FTE total, creating an enterprise footprint. FTE calculations establish the full-time faculty plus one-third of part-time faculty plus one-half of part-time staff.

Info-Tech Insight

Compliance takes a different form in terms of the ETLA true-up process. The completion of Adobe's transition to cloud-based licensing and verification has improved compliance rates via phone home telemetry such that pirated software is less available and more easily detected. Adobe has actually decommissioned its audit arm in the Americas and EMEA.

Audits and software asset management with Adobe

Watch out for:

• Virtual desktops, freeware, and test and trial licenses
• Adobe products that may be bundled into a suite; a manual check will be needed to ensure the suite isn’t recognized as a standalone license
• Pirated licenses with a “crack” built into the software

Simplify your process – from start to finish – with these steps:

Determine License Entitlements

Obtain documentation from internal records and Adobe to track licenses and upgrades to determine what licenses you own and have the right to use.

Gather Deployment Information

Leverage a software asset management tool or process to determine what software is deployed and what is/is not being used.

Determine Effective License Position

Compare license entitlements with deployment data to uncover surpluses and deficits in licensing. Look for opportunities.

Plan Changes to License Position

Meet with IT stakeholders to discuss the enterprise license program (ELP), short- and long-term project plans, and budget allocation. Plan and document licensing requirements.

Adobe Genuine Software Integrity Service

• This service was started in 2014 to combat non-genuine software sold by non-authorized resellers.
• The service works hand in hand with the cloud movement to reduce piracy.
• Every Adobe product now contains an executable file that will scan your machine for non-genuine software.
• If non-genuine software is detected, the user will be notified and directed to the official Adobe website for next steps.

Detailed list of Adobe licensing contract types

The table below describes Adobe contract types beyond the four typical purchasing models explained in the previous slides:

Insight breakdown

Insight 1

Adobe operates in its own niche in the creative space, and Adobe users have grown accustomed to their products, making switching very difficult.

Insight 2

Adobe has transitioned the vast majority of its software offerings to the cloud-based subscription model. Active management of licenses, software provisioning, and consumption of cloud services is now an ongoing job.

Insight 3

With the vendor lock-in process nearly complete via the transition to a SaaS subscription model, Adobe is raising prices on an annual basis. Advance planning and strategic use of the ETLA is key to avoid budget-breaking surprises.

Summary of accomplishment

Knowledge Gained

• The key pieces of licensing information that should be gathered about the current state of your own organization.
• An in-depth understanding of the required licenses across all of your products.
• Clear methodology for selecting the most effective contract type.
• Development of measurable, relevant metrics to help track future project success and identify areas of strength and weakness within your licensing program.

Processes Optimized

• Understanding of the importance of licensing in relation to business objectives.
• Understanding of the various licensing considerations that need to be made.
• Contract negotiation.

Deliverables Completed

• Adobe ETLA Deployment Forecast
• Adobe ETLA Forecasted Cost and Benefits
• Adobe ETLA vs. VIP Pricing Table

Related Info-Tech Research

Take Control of Microsoft Licensing and Optimize Spend

Create an Effective Plan to Implement IT Asset Management

Establish an Effective System of Internal IT Controls to Mitigate Risks

Optimize Software Asset Management

Take Control of Compliance Improvement to Conquer Every Audit

Cut PCI Compliance and Audit Costs in Half

Bibliography

“Adobe Buying Programs: At-a-glance comparison guide for Commercial and government organizations.” Adobe Systems Incorporated, 2014. Web. 1 Feb. 2018.

“Adobe Buying Programs Comparison Guide for Commercial and Government Organizations.” Adobe Systems Incorporated, 2018. Web.

“Adobe Buying Programs Comparison Guide for Education.” Adobe Systems Incorporated, 2018. Web. 1 Feb 2018.

“Adobe Education Enterprise Agreement: Give your school access to the latest industry-leading creative tools.” Adobe Systems Incorporated, 2014. Web. 1 Feb. 2018.

“Adobe Enterprise Term License Agreement for commercial and government organizations.” Adobe Systems Incorporated, 2016. Web. 1 Feb. 2018.

Adobe Investor Presentation – October 2017. Adobe Systems Incorporated, 2017. Web. 1 Feb. 2018.

Cabral, Amanda. “Students react to end of UConn-Adobe contract.” The Daily Campus (Uconn), 5 April 2017. Web. 1 Feb. 2018.

de Veer, Patrick and Alecsandra Vintilescu. “Quick Guide to Adobe Licensing.” B-lay, Web. 1 Feb. 2018.

“Find the best program for your organization.” Adobe, Web. 1 Feb 2018.

Foxen, David. “Adobe Upgrade Simplified.” Snow Software, 7 Oct. 2016. Web.

Frazer, Bryant. “Adobe Stops Reporting Subscription Figures for Creative Cloud.” Studio Daily. Access Intelligence, LLC. 17 March 2016. Web.

“Give your students the power to create bright futures.” Adobe, Web. 1 Feb 2018.

Jones, Noah. “Adobe changes subscription prices, colleges forced to pay more.” BG Falcon Media. Bowling Green State University, 18 Feb. 2015. Web. 1 Feb. 2018.

Mansfield, Adam. “Is Your Organization Prepared for Adobe’s Enterprise Term License Agreements (ETLA)?” UpperEdge,30 April 2013. Web. 1 Feb. 2018.

Murray, Corey. “6 Things Every School Should Know About Adobe’s Move to Creative Cloud.” EdTech: Focus on K-12. CDW LLC, 10 June 2013. Web.

“Navigating an Adobe Software Audit: Tips for Emerging Unscathed.” Nitro, Web. 1 Feb. 2018.

Razavi, Omid. “Challenges of Traditional Software Companies Transitioning to SaaS.” Sand Hill, 12 May 2015. Web. 1 Feb. 2018.

Rivard, Ry. “Confusion in the Cloud.” Inside Higher Ed. 22 May 2013. Web. 1 Feb. 2018.

Sharwood, Simon. “Adobe stops software licence audits in Americas, Europe.” The Register. Situation Publishing. 12 Aug. 2016. Web. 1 Feb. 2018.

“Software Licensing Challenges Faced In The Cloud: How Can The Cloud Benefit You?” The ITAM Review. Enterprise Opinions Limited. 20 Nov. 2015. Web.

White, Stephen. “Understanding the Impacts of Adobe’s Cloud Strategy and Subscriptions Before Negotiating an ETLA.” Gartner, 22 Feb. 2016. Web.

Mitigate Key IT Employee Knowledge Loss

Transfer IT knowledge before it’s gone.

EXECUTIVE BRIEF

Executive Summary

Info-Tech Insight

Seventy-four percent of organizations do not have a formal process for capturing and retaining knowledge which, when lost, results in decreased productivity, increased risk, and money out the door.1

1 McLean & Company, 2016, N=120

Stop your knowledge from walking out the door

Today, the value of an organization has less to do with its fixed assets and more to do with its intangible assets. Intangible assets include patents, research and development, business processes and software, employee training, and employee knowledge and capability.

People (and their knowledge and capabilities) are an organization’s competitive advantage and with the baby boomer retirement looming, organizations need to invest in capturing employee knowledge before the employees leave. Losing employees in key roles without adequate preparation for their departure has a direct impact on the bottom line in terms of disrupted productivity, severed relationships, and missed opportunities.

Knowledge Transfer (KT) is the process and tactics by which intangible assets – expertise, knowledge, and capabilities – are transferred from one stakeholder to another. A well-devised knowledge transfer plan will mitigate the risk of knowledge loss, yet as many as 74%2 of organizations have no formal approach to KT – and it’s costing them money, reputation, and time.

84%of all enterprise value on the S&P 500 is intangibles.3

$31.5 billion lost annually by Fortune 500 companies failing to share knowledge. 1

74% of organizations have no formal process for facilitating knowledge transfer. 2

1 Shedding Light on Knowledge Management, 2004, p. 46

2 McLean & Company, 2016, N=120

3 Visual Capitalists, 2020

Losing knowledge will undermine your organization’s strategy in four ways

In a worst-case scenario, key employees leaving will result in the loss of valuable knowledge, core business relationships, and profits.

Are you part of the 74% of organizations with no knowledge transfer planning in place? Can you afford not to have it?

Consider this:

A system failure to a mainframe could be disastrous for organizations that haven’t effectively transferred key knowledge. Now think past the mainframe to key processes, customer/vendor relationships, legal requirements, home grown solutions etc. in your organization.

What would knowledge loss cost you in terms of financial and reputational loss?

Source: 1 Big Tech Problem as Mainframes Outlast Workforce

Source: 2 IT's most wanted: Mainframe programmers

Source: 3The State of the Mainframe, 2022

Case Study

Insurance organization fails to mitigate risk of employee departure and incurs costly consequences – in the millions

INDUSTRY: Insurance

SOURCE: ITRG Member

Forward thinking organizations use knowledge transfer not only to avoid risks, but to drive IT innovation

IT knowledge transfer is a process that, at its most basic level, ensures that essential IT knowledge and capabilities don’t leave the organization – and at its most sophisticated level, drives innovation and customer service by leveraging knowledge assets.

Common obstacles

In building your knowledge transfer roadmap, the size of your organization can present unique challenges

How you build your knowledge transfer roadmap will not change drastically based on the size of your organization; however, the scope of your initiative, tactics you employ, and your communication plan for knowledge transfer may change.

How knowledge transfer projects vary by organization size:

Capture both explicit and tacit knowledge

Knowledge transfer is not a one-size-fits-all project

	No formal knowledge transfer program exists; knowledge transfer is ad hoc, or may be conducted through an exit interview only. 74% of organizations are at level 0.1
	At level one, knowledge transfer is focused around ensuring that high risk, explicit knowledge is covered for all high-risk stakeholders.
	Organizations have knowledge transfer plans for all high-risk knowledge to ensure redundancies exist and leverage this to drive process improvements, effectiveness, and employee engagement.
	Increase end-user satisfaction and create a knowledge value center by leveraging the collective knowledge to solve repeat customer issues and drive new product innovation.

1 Source: McLean & Company, 2016, N=120

Assess your fit for this blueprint by considering the following statements

I’m an IT Leader who…

This blueprint can help you build a roadmap to resolve each of these pain points. However, not all organizations need to have a knowledge culture. In the next section, we will walk you through the steps of selecting your target maturity model based on your knowledge goals.

Case Study

Siemens builds a knowledge culture to drive customer service improvements and increases sales by $122 million

INDUSTRY: Electronics Engineering

SOURCE: KM Best Practices

Info-Tech’s approach

Five steps to future-proof your IT team

The Info-Tech difference:

1. Successfully build a knowledge transfer roadmap based on your goals, no matter what market segment or size of business.
2. Increase departmental efficiencies through increased collaboration.
3. Retain key IT knowledge.
4. Improve junior employee engagement by creating development opportunities.

Use Info-Tech tools and templates

Info-Tech’s methodology to mitigate key IT employee knowledge loss

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

IT Knowledge Transfer Project Charter Establish a clear project scope, decision rights, and executive sponsorship for the project.		IT Knowledge Transfer Risk Assessment Tool Identify and assess the knowledge and individual risk of key knowledge holders.
IT Knowledge Identification Interview Guide Extract information about the type of knowledge sources have.		IT Knowledge Transfer Roadmap Presentation Communicate IT knowledge transfer recommendations to stakeholders to gain buy-in.

Key deliverable:

IT Knowledge Transfer Plan

Track knowledge activities, intended recipients, and appropriate transfer tactics for each knowledge source.

Blueprint benefits