November 3, 2017

Much has been said about the role of the CIO (Chief Information Officer). In a technology event I recently attended, a speaker mentioned that the “I” of the CIO now stands for “Intelligence.” I found this idea interesting, but I’d like to consider an alternative.

Traditional companies are now facing enormous challenges to maintain their EBITDAs (Earnings Before Interest, Tax, Depreciation and Amortization), and in the midst of the digital revolution, these challenges are rapidly increasing. Therefore, I propose that the CIO must immediately become the CEO.

But wait!

I’m not talking about making the CIO the Chief Executive Officer. Instead, I’m talking about changing the “I” for Information to an “E” for Efficiency; that is, Chief Efficiency Officer with an emphasis on increasing operational efficiency as a result. Efficiency is what makes a company capable of carrying out its plans and actions with the least waste of time and effort, thus demonstrating competence and performance.

If you’re a CEO or CFO who wants to see your EBITDA undergo positive change, partner with your CIO. With the CIO by your side, your goal may become more attainable.

On the other hand, if you are the CIO and have not yet analyzed the DRE (Deferred Revenue Expenditure) or identified where to leverage new technologies to increase efficiency, you may want to consider taking on the role of CEO: Chief Efficiency Officer.

While looking for examples of CIOs who are now Chief Efficiency Officers, I came across a telemarketing sales team that tripled their billing opportunities through the help of Artificial Intelligence. In another example, a company managed to reduce the cost of raw material acquisition by 3%, attributing $500,000 dollars per month directly to this result. I am currently also following a company that is leveraging the Internet of Things in an effort to reduce energy costs by 10%, about $300,000 per year.

When CIOs are looking at the company’s operations and focusing on increasing and sustaining EBITDA, they are more likely to take advantage of technologies such as Artificial Intelligence and the Internet of Things to improve their deliverables, reduce costs, and become more scalable.

Organizational Changes Generate Costs from Unused Assets

Organizations that are planning for, undergoing, or recovering from a significant change such as:

  • a divestiture
  • merger & acquisition
  • downsizing of employees or locations
  • expansion of employees or locations
  • digital transformation project
  • digital optimization initiative

will almost certainly have telecom or infrastructure inventory that they are still paying for but are no longer actively using.

This may include data circuits connected to locations that have been sold or vacated, mobiles issued to employees or contractors who have left the business, network lines that have been replaced with newer and faster technology or just that one line that shows up on the bill, but no one is actually sure what it’s used for.

The 6 W’s for a Holistic View of Your Infrastructure

Tangoe has solutions that can help in all of these scenarios.  We build a ground up inventory of every line, circuit, mobile and more that a business pays for and determine the 6 W’s:

  • What is it?
    • What technology is being provided?
  • Where is it?
    • Where is it physically located, local, and remote end for point to point circuits?
  • Who uses it?
    • Which employee is it assigned to?
  • What is it used for?
    • What’s the business application for this line?
  • Who pays for it?
    • Whose budget does it hit?
  • What are the negotiated contract rates?
    • How much should this be billed?

All of this is built into a proprietary database application by skilled and experienced staff with associations of every asset in the inventory tied to enterprise-managed data, providing a complete overview of the infrastructure.

This method always* finds infrastructure on the bill that is unknown at best, downright wrong at worst, and that leads to opportunities to:

  • disconnect assets in inventory no longer used or needed and lines issued to terminated employees
  • get the correct contract rates and discounts applied to business lines (sometimes with retroactive credits or refunds)
  • right-size and optimize the network based on what your business actually needs

*Your results may differ, but seriously, there are always spurious entries.

Having this accurate, scrubbed, and maintained inventory of assets also helps manage transformation projects. It provides the foundation from which the changes can be made and closes the loop on deactivating obsolete infrastructure as upgrades and changes are made to the environment.  This evergreen asset inventory then becomes the foundation against which future invoices can be reconciled to identify billing discrepancies and errors that might otherwise go unnoticed.

No matter the alphabet letter in the soup titling your position, disruptive technologies are there impacting business in an unprecedented way while testing everyone’s ability to be creative, holistic, and focused on the end goal.

Tangoe provides a complete managed solution for asset inventory, expense, and usage management for organizations with more than $1BN in revenue.  Bringing order to technology chaos is our sweet spot, and helping Chief Information Officers (and Chief Efficiency Officers) achieve their EBITDA goals through increased efficiency is what we’ve been doing for over 17 years.

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