The concept of scalable consumption of technologies is growing in popularity. The idea that companies can alter their IT costs dynamic is attractive to businesses where the amount of space and servers employed exceeds the actual usage. Paying for equipment that sits idle translates into waste, and companies that consider IT costs a fixed expense are under pressure to discover a more agile approach. Innovative consumption-based service models offer the solution.
With the advent of Software as a Service (SaaS), CIOs have an opportunity to integrate greater agility into the company by employing a consumption-based (or “as a Service”) IT model. Rather than pre-committing to IT costs based on full-time equivalent employees (FTEs), seats, or tasks, a usage-based approach relies on a data structure where expense directly correlates to consumption. The ability to scale resources based on usage offers organizations the flexibility and savings present in variable costs as opposed to fixed ones.
Transitioning to a cloud-based infrastructure is the foundation of this new cost reduction concept. Whether it is orchestrated through a dependable third-party provider or internally, getting the organization on board with the shift to consumption-based IT requires outlining the benefits of the efficiency and savings it establishes.
Making the Case
To implement consumption-based IT services and move company fixed costs to the variable column, organizations must sketch the advantages of the switch.
- Agility: The primary reasons for the shift to consumption-based IT services include greater flexibility, quicker time-to-market, and simplified scaling. When work volumes fluctuate, this establishes a major cost reduction.
- Cost Reduction: This type of IT service offers the ability to synchronize revenue with cost, calculate the benefits of the IT impact on a service or product, and engage new technologies without being saddled with debt or high capital expenditure.
- Companywide Integration: Rather than focusing on single-point solutions, cloud-based infrastructure enables companywide pricing structure for an overall reduction in IT costs.
- Ongoing Improvement: Consumption-based IT services allow for ongoing expense assessments. Enterprises have the power to continually review usage and pinpoint services or specific components that can be more efficient, and alter them as needed.
Moving to a consumption-based service model lowers IT costs. By instituting workable flexibility that gives both components and services the ability to evolve, businesses can establish improved performance in a low-cost framework. An agile, cost-efficient infrastructure delivers cutting-edge resources that improve efficiency and productivity throughout the organization.