For Agility and Competitiveness, Turn to Variabilization
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For Agility and Competitiveness, Turn to Variabilization

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Looking in the rearview mirror at the devastation from the economic downturn, a lot of the pain that organizations suffered might have been mitigated had they integrated variabilized cost structures ...

Looking in the rearview mirror at the devastation from the economic downturn, a lot of the pain that organizations suffered might have been mitigated had they integrated variabilized cost structures into their business

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For Agility and Competitiveness, Turn to Variabilization For Agility and Competitiveness, Turn to Variabilization Presentation Transcript

  • © 2014 WIPRO LTD | WWW.WIPRO.COM1 For Agility and Competitiveness, Turn to Variabilization
  • © 2014 WIPRO LTD | WWW.WIPRO.COM2 For Agility and Competitiveness, Turn to Variabilization HIGHLIGHTS Looking in the rearview mirror at the devastation from the economic downturn, a lot of the pain that organizations suffered might have been mitigated had they integrated variabilized cost structures into their business A strictly fixed-cost approach creates higher entry and exit barriers to business, whereas strategically adopting variability throughout the organization can jumpstart competitiveness by linking costs to revenue. A variabilized organization is an agile one—and one with lower cost risks
  • © 2014 WIPRO LTD | WWW.WIPRO.COM3 The Three Levers of Variabilization Variabilizing IT Costs In this lever, IT transitions from being a fixed asset to being a utility. This allows the company to cost- effectively take advantage of the most current technologies while keeping its focus on the core business Variabilizing Business Processes This is leveraging a shared business process model to manage cost pressures via flexible pay-per-use supplier contracts containing SLAs Variabilizing Business Infrastructure Instead of having a fixed scope of operations, an enterprise can quickly scale up or down with this lever Different Models within the three levers • Virtualization: One of the most popular ways of doing this is by moving data to the Cloud and virtualizing networks. • Activity-based pricing: With outcome-based models, the cost to the customer is determined by what is actually required during a given period of time
  • © 2014 WIPRO LTD | WWW.WIPRO.COM4 Getting past the Barriers to Adoption • Use a gradual phase-out model, in which you continue using legacy systems until invested costs are fully amortized and you can gradually shift to a variable model • Another option is to determine whether the vendor who sold you your legacy systems may be willing to buy them back in order to sell you services using a variable pay structure. It enables the vendor to sell unutilized systems capacity to other customers Systems and equipment in wide use and easily replicable are strong candidates to convert to variable costs. The best approach is to identify potential pilot projects, starting with non-core parts of the business A leading Dutch paint manufacturer reduced costs by 35 percent after deploying a remote backup service in which the cost was based on the volume of business data stored
  • © 2014 WIPRO LTD | WWW.WIPRO.COM5 Next Generation Partnerships As agility—both in cost control and technology advancement—becomes a competitive necessity, variabilization can be an organization’s differentiator  The levers we talk about today can be just the beginning as variabilization becomes increasingly sophisticated and widely adopted by organizations  The first steps are to explore and adopt targeted variabilization models that optimize the organization’s financial flexibility so one can realize cost savings and break out of the bonds that fixed pricing creates  Variabilization can provide: new innovation opportunities, faster time to market, adoption of the latest technologies, and the ability to withstand economic downturns
  • © 2014 WIPRO LTD | WWW.WIPRO.COM6 For more details please visit the link below: http://www.wipro.com/Documents/for-agility-and-competitiveness- turn-to-variabilization.pdf
  • © 2014 WIPRO LTD | WWW.WIPRO.COM7 About Wipro Ltd Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of “Business through Technology” - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner’s approach to delivering innovation and an organization wide commitment to sustainability, Wipro has a workforce of 140,000 serving clients across 61 countries. For more information, please visit www.wipro.com. For more information, please visit www.wipro.com
  • © 2014 WIPRO LTD | WWW.WIPRO.COM8 Thank You ©Wipro Limited, 2014. All rights reserved. For more information visit www.wipro.com No part of this document may be reproduced in whole or in part without the written permission of the authors. Wipro is not liable for any business outcome based on the views presented in this document. For specific implementation clients should take advise from their client engagement manager.