Cut IT costs on commodities, not innovation: CTO, Software AG

Cost cutting is a short-term goal, not a strategy, and IT departments need to show they can provide growth through investing in innovation, says Dr. Wolfram Jost, Chief Technology Officer at Software AG.

With many IT budgets being cut, Dr. Jost said it is important costs are reduced in the right places, whilst investments are still made in key areas.

“The challenge of IT is that there is always a pressure to cost cut, but on the other side they have to deliver new innovations to better support the business. I think IT departments and companies are really under pressure to save money but also to better enable the business at the same time,” Dr. Jost said.

“I believe that cost savings are a short term goal, but it is not a strategy. A strategy is to get more market share and revenue and therefore I think IT has to show the business how they can enable more profitable growth,” he added.

The large-scale standardisation that took place when companies first started investing in IT around 15 years ago leaves a lot of areas where costs can be cut now, Dr. Jost said. Most importantly, he added, these cost cuts should not effect IT investment in new innovations.

“They should save money on the pure commodity stuff – on pure standardisation – and they should spend more money in innovation. I think if a CIO has a budget then he has to look where can I do things cheaper and where can I give the business more flexible innovation to do better in the market,” Dr. Jost said.

“That’s not an easy task because IT budgets are under pressure. We offer a process platform that gives IT an enabling technology for their business. We are not saying that processes are too expensive, we are saying they are not innovative enough. If innovation is big enough then costs do not matter,” he added.

Dr. Jost said he also believes companies should be looking to platforms rather than products.

“We believe that platforms are better than products, so we offer an end-to-end process platform for customers to really improve their business processes. This is our core focus,” he said.

“Our research is now not focused on what we should do – it’s clear what – but our research is in how to do it in the most innovative way,” he added.