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15 Smart Ways CTOs Can Leverage Their Expertise To Save Their Company’s Budget Dollars

Forbes Technology Council

In recent years, the role of the CTO has expanded. Now, in addition to overseeing new product development and the health of the company’s tech stack, CTOs are more client-facing and are spending more time working with the rest of the C-suite to guide overall company direction. While CTOs may have always had a seat at the table, they’re now expected to play a larger role in everything from establishing company culture to weighing in on financial decisions. 

It’s a smart move to expand the role of the CTO among the executive team. They not only have insight into the company’s vision and direction but also have the expertise to recommend the tech strategies that will most efficiently—and cost-effectively—help a company reach its goals. Below, 15 members of Forbes Technology Council share practical ways a CTO can help their company stretch its budget dollars.

1. Look For Inefficient Spending

CTOs have always had the opportunity to bring novel ideas to the table when it comes to cost savings as well as new product features. In a post-pandemic world where every company has had to inject technology into their business models at a rapid pace, CTOs are in a unique position to leverage tech to reduce costs and improve budget footprints by looking at where the company’s budget dollars are inefficiently spent. - Himanshu Niranjani, Visible - Verizon

2. Understand Problems Before Working On Solutions

Developing products and technology the customer doesn’t need is a huge waste. We all love cool tech, but we need to keep the market in mind. Having a good understanding of how innovative products can solve specific problems for a group of customers is the best way to prevent wasting budget dollars on the wrong projects. Have a clear understanding of the problem before working on the solution. - Johannes Mayer, Wiferion GmbH

3. Work To Get The Biggest Impact Possible From R&D

Directing self-funded investments in R&D to deliver growth for the business is an important responsibility for CTOs. Getting the most impact out of the precious R&D budget while taking some risk on disruptive technologies is a balance the CTO needs to get right. Working in partnerships—and picking the right partners—is one way of stretching the benefits of R&D budgets further. - Alex Cresswell, Thales Group

4. Watch The Value-To-Spend Ratio

CTOs should seek a high value-to-spend ratio in every budget line item. One of the most common causes for a low ratio is poor adoption of expensive technology capabilities. A CTO who leads their organization to “think from the user out” will implement product-management practices that engage users to discover tech value issues and resolve them (for example, cutting low-value tech or improving adoption). - Christopher Lazzaro, Associated Electric Cooperative Inc.

5. Veto Unneeded Tech Purchases

The CTO needs to have the confidence to step in and stop any purchase or contract for technology that another business leader may be attempting to make autonomously. When you do, discuss the overall strategy of the organization, and explain why this choice does not align. Describe how the ultimate cost to the organization of overcoming this unwise purchase will be higher than any potential savings that may seem attractive to your peers. - Dick Wilkinson, New Mexico Supreme Court


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6. Work With HR To Create Plans For Automation

CTOs can leverage process intelligence and process discovery tools to reveal areas for improvement and work with HR to determine the cost of the resources allocated to these processes, establishing the ROI. Together, they can create a clear plan on what to automate. Freed-up personnel can absorb previously neglected tasks or be reallocated to open positions, preventing the need to increase headcount. It is a win-win solution. - Carolyn Jenkins, EPSoft Technologies

7. Reduce Redundancies

As companies grow and expand, often individual departments with individual budgets make individual decisions for their individual needs. Working with a collective mindset, the CTO should be able to assist all leaders to come together to find a single “best fit” that functions across the organization for better pricing, lower costs, efficiency, optimization, cost-effectiveness and productivity. - Luke Wallace, Bottle Rocket

8. Look For Ways To Streamline Processes

Start by analyzing processes that are still on paper or have multiple inputs. There are simple, out-of-the-box solutions that can streamline these processes, improve outcomes and create new capacity. Changing even the smallest processes with the right solution can have a big ROI. - Andreas Sulejewski, Neptune Software

9. Quantify The ROI Of New Efficiencies And Opportunities

Technology leaders must understand the current and ideal future state of the business and be able to quantify the ROI of new efficiencies or revenue opportunities to help justify their roadmap, as well as any new tech that comes with it. We do this often with our customers through business value assessments that show the tangible value of their investment, justifying the business case—and the budget. - Cindy Jaudon, IFS

10. Invest In Tech At The Edge

Invest in tech and tools that can surround your core systems and be used at the edge of the business instead of having many point solutions. No-code and low-code tools give tech-savvy business users the tools to create digital solutions without the hefty price of core systems. - Deb Gildersleeve, Quickbase

11. Change To A Decentralized Model

Typically, the highest cost for a company is labor. Increasing developer productivity can lead to significant cost savings. As a CTO/tech leader, you can change the organizational and technical architecture to a decentralized model and create an environment with high flow efficiency, boosting developer productivity by eliminating the gates created by layered and centralized architecture. - Asanka Abeysinghe, WSO2, Inc.

12. Understand The Hidden Costs Of Managed Services

As businesses continue to embrace the cloud, those looking to conserve budgets should understand the hidden costs of managed services masquerading as cloud software. True cloud-based software requires significantly less effort to customize, implement and maintain compared to hosting client server software or working with vendors offering managed services. - Ken Fleming, Logistyx Technologies

13. Explore New Cybersecurity Solutions

Instead of continuously adding security control tools and building more layered defenses to mitigate cyber risk, be open to new methods of solving perennial cybersecurity problems. Understand the potential threats, both known and unknown, and see what is happening in your geography, industry and technology stack. Know where your critical assets are and monitor and protect them first. - Kumar Ritesh, CYFIRMA

14. Tap Into The Global Talent Pool

Hire overseas. Most of the cost of technology comes from personnel. With Covid forcing many companies to go remote and global, there’s a new opportunity to tap into the worldwide pool of inexpensive, highly skilled talent. Just make sure candidates have timezone overlaps with the rest of the team. For example, South America has a largely untapped talent pool, and its time zones closely match those in North America. - Bhavesh “BK” Kakadiya, The Abstract Operations Company

15. Instead Of Cutting Costs, Look For Ways To Boost Revenue

Saving budget dollars is likely to be a low priority for CTOs over the next few years. Adding to revenue should be the main focus of the CTO. Covid-19 accelerated the need for building omnichannel customer experiences and new virtual products and services. But if cost savings are a priority, automation is the first place to look. People are still the most expensive part of most organizations. - Kevin Parikh, Avasant

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