Key Drivers For Portfolio Company Value Creation:…
Cloud Services were born with a “Pay as you go” (PAYG) Business model, purchasing just the needed services with “zero waste of resources”. To reduce the global costs associated with PAYG, many companies decided to opt for long-term commitments instead of the existing pricing model.
We noticed two effects:
Therefore, organizations have to focus on creating a remediation plan in both the short and long term. To reduce the waste in the short term, the below solutions have been identified as potential options:
It’s “compulsory” to monitor real consumption of both services and user licenses. It's not particularly hard, but how many organizations have a robust governance and toolset to effectively monitor real usage?
Once the real utilization rate is known, it is important to adopt automatic real-time monitoring solutions. Fortunately, there is a wide range of available tools. It may take some "focus" to design an efficient governance… but it really is worth it!
Finally, since we are now aware that we cannot ignore “disaster” situations, we suggest performing a full risk analysis when renewing contracts, including ICT Risk-Analysis methodologies. Risk analyses can identify “what-if” scenarios and define a mitigation plan in order to protect your business against exceptional events and preserve long-term savings from shiny quick wins.
These difficult circumstances will give you the opportunity to introduce and negotiate some clauses during your next contract renewal and it may save you later when you face harder times.