Business services must be sourced and acquired through the AuctionIQ Internet Marketplace offering according to Mahendra Durai, Senior Vice President, CA Technologies IT. For years across multiple companies, Mahendra has used the inventor of the first Internet Marketplace for IT services, AuctionIQ (AIQ). Since AIQ’s beginning, 30 years ago, AIQ has produced greater than 50% savings on average in IT cost categories in less than 3-6 months, as well as spread to cover almost all other business spends. In CA’s most recent project, $6M, a 45% savings, was produced. Less than 3 years ago, a similar project with AIQ produced savings of 55% with an ROI in 19 days using AIQ.
Mahendra hailed this as another use case of the “application economy.” By using the capabilities of CA Technologies’ Products, Mahendra’s team has the information to understand exactly where their infrastructure spend is. Now coupled with AIQ’s unique processes and Marketplace, significant savings are realizable in new ways. CA Technologies has comprehensive products, processes, and skills that allow businesses to:
- Optimize information technology services and portfolio investments
- Plan, implement and track information technology investments across performance and spend realities
- Discover and manage complex information technology implementations in a unified and simplified manner
This capability provides the information and confidence to understand your IT environment. Mahendra recently engaged his Team to produce demonstrable savings in less than 4 months. The business driver, in Mahendra’s words, “Our business is about growing the value we create for our customers through better products and better innovation. Our focus is to re-align “run” expenses so we can continuously invest in growth oriented investments. Using CA’s solutions, we are accustomed to increasing IT value at a lower cost. Using CA’s Products, we have the optics of where our investments are and how they are performing. This gives us insight into what our options are to maximize the value from our IT investments.” Using this knowledge, IT rose to the challenge of lowering cost without impacting services.
CA’s IT Team also knew of AIQ’s solutions to optimize spend beyond just using the CA Products. For this specific project, a specific IT service was running at a cost of $13M per year. After applying AIQ optimization processes, their spend was reduced by 45%, ($6M in savings,). From a purely economic standpoint, these saving would equate to a $.02 EPS improvement.
Mahendra explains the use of AIQ processes as, “We have a partnership with AIQ, as they know how to understand our current cost model, predict and then deliver savings with 99.5% accuracy in 30 days across various business services. AIQ prepares our requirements in a manner that enables our services to be completed using the AIQ internet-enabled marketplace. I have tracked the results over a decade, in multiple companies. AIQ has been able to consistently double the savings we could have obtained on our own.”
“We see what AIQ brings to the table as best-in-class, and so it was a no-brainer, leveraging the AIQ solution and services that were provided. We used this same approach to this IT service almost three years ago. It was a surprise we could achieve similar results again; and, double the cost reductions if we tried without the AIQ process,” Mahendra shared.
Mahendra had an unexpected perspective on using this process. “I think the important lesson from leveraging AIQ’s services are – don’t go it alone. As an IT technology or VMO leader, it’s important not to believe all answers and capabilities are available in-house and using a partner like AIQ is important. They have a database of results, unique processes, expertise from hundreds of clients, and tools to create this AIQ marketplace which just cannot be replicated in-house.
The results from AIQ Projects are achieved quickly and easily allowing a manager can focus on their core business and use the AIQ-created savings to fund needed initiatives. You will get what AIQ promises. It will give you the confidence to propose new initiatives and then self-fund them.”
Mahendra has seen this process work multiple times for over a decade. He shares some perspectives and best practices:
- “People are skeptical when they hear the savings possible. They focus on the fee for the service rather than the value the service delivers. You’ll realize these are not risks, but safe, no regret moves, and it becomes mainstream in how you operate going forward.”
- “Look at the spend holistically and across the enterprise. AIQ can show you the focus points and unique leveraging opportunities in new ways.”
- “Leadership is the antidote for complexity. In large organizations, there can be complexities in getting the energy behind a project like this. Make sure the CXO level leadership is sponsoring the change. Make sure the budget owner is driving the process. As a leader, align the budget owner, Finance, and Procurement teams with the understanding on how this will benefit the company.”
- “IT manages and optimizes the flow of business transactions and the productivity of the business. We have to think in terms of business enablement and improving the efficiencies and effectiveness of technology inestmetns.”