The COVID-19 outbreak has already had a major impact on the global economy. The IMF has declared we’ve entered a global recession, and enterprises are scrambling to meet the unprecedented scale of business continuity planning that the pandemic has caused. Nimble organizations are best positioned to survive – and potentially do better – yet some will face acute debt and a liquidity crisis. It’s highly likely that many businesses will face bankruptcy or consolidation without significantly reducing costs given the demand shock and recession.
Amid this devastating blow, most companies’ focus in the coming few months is to shift to business sustainability, revise budgets, take stock of current spends and yearly projections, reprioritize investments and explore avenues to cut costs. At times like this, proven frameworks like OPTIMIZE SGT (Sustain, Grow, Transform) can act as a guide to help CIOs identify rapid cost-saving opportunities, focus on optimizing costs to sustain the business, make quick spend revisions to foster future growth, and enable transformation in the coming years.
Businesses should consider five dimensions to arrive at the appropriate strategy: Business & IT Alignment, Simplification of IT, Cloud, Operating Model, and IT Process Automation.
This approach to help CIOs identify optimum cost-reduction opportunities spans six to eight weeks depending on the size of the organization. There is also an option to conduct shorter and more-focused assessments for specific business units or geographies. At a high level, the critical activities in these engagements span five stages, as shown below.
The prioritized opportunities form the baseline for cost reductions across the portfolio, helping CIOs to align their strategy with revised budget and spend targets.
Around the world, the lockdowns imposed to contain the spread of COVID-19 have caused economic ripples that will last for years. This impact is being felt across sectors, though the hardest-hit are travel, hospitality, aviation, manufacturing and retail. With consumer discretionary spending essentially stopped, enterprises must quickly identify cost-saving opportunities to sustain their business and foster sustainable growth. Embracing tools like Wipro’s OPTIMIZE SGT framework can help CIOs as they chart a path to not just survive, but thrive.