As the economy grows more challenging, South African businesses are being forced to cut their IT budgets. But technology services and solutions specialist Entelect has doubled down on its efforts to work with customers to streamline projects, find innovative ways to save, and ensure they still get the projects and value they hoped for.
Entelect Account Executive Vencel Ravić says even major enterprises are having to reduce their IT spend. “Customers we’ve built trust with over the years are quite transparent when it comes to costing. Their budgets started being reduced at the start of 2023. While they still have the same goals and ambitions, they are taking a hard line on costs.”
Budget cut drivers
Some factors influencing these budget cuts include the huge costs of mitigating the impacts of load-shedding, interest rate hikes, the rand-dollar exchange rate, and possible geopolitical changes due to elections taking place around the world this year.
Ravić says: “They are cautiously cutting their budgets. Some are assessing their more innovative strategies, and cutting them if they haven’t had a return, or there’s no solid business case for them. They haven’t cut those that are business-critical or deliver immediate value.
“For consultants and service providers, it means we all have to get more competitive and find viable ways to deliver more value,” he explains.
He says Entelect is now investing in its relationships with customers to help them achieve their goals – at a lower cost. “We place immense value on the partnerships we have with our customers. This means commitment when times are good, and doubling up the commitment when the going gets hard.”
Critical paths to value
“We run value workshops assessing ROI and work to find the critical path to value by focusing on what is really important and cutting out bells and whistles,” Ravić explains. “We are taking the opportunity to partner with our customers in trying times by looking at costs, reorganising the structure of our teams, and being mindful of the fact that every hour counts.”
Smart resourcing
Entelect optimises its teams to reduce costs to clients. Instead of allocating a full team of technical experts for the full duration of an engagement, the company assigns specific expertise only as needed, and has more team members taking on wider responsibilities.
“Instead of assigning a senior heavy team, we mix the team, and relook at cross-functional team structures. We may find that we have team members who are able to ‘double hat’ and be as effective,” he says.
“We continuously reassess the health of the team balance and strive to find the sweet spot of experience and cost.”
Creating the right mix of seniority and experience within a team is beneficial to both businesses and staff, he notes. Team members are able to accelerate their career, and organisations can optimise their operations.
Significant change has been achieved by deploying teams who can time manage effectively, and communicate rapidly. This can be done quite simply - such as reducing the number of people attending meetings.
“You don’t need every person in every meeting – they could rather work on coding during that time,” Ravić says. “In the past, people didn’t think they could push back and decline meetings. Now, wherever possible, we have only one or two key people attend the meeting and report back to the rest of the team. One team we monitored saw a velocity increase: on a team of 8 – 10 people you could free up as much as 25% of their time just by excluding people from lengthy meetings.”
Flexing teams up and down has also been beneficial for both Entelect and its customers. Instead of putting a full team in place on site for the duration of the project, Entelect stretches the budget by putting the right people in place as needed.
“For example, the customer may say we need a team of six, but we will suggest starting with a smaller team that ramps up as analysis and requirements become visible. We might start with the tech lead and business analyst as the vanguard to lay the foundation, and add two developers in month two, with UX and design coming in at month four. We are trying to find the sweet spot to utilise the right people at the right time on the right project,” he says.
“When we tell clients about this flexibility, they get excited – they expected to spend a fixed amount of money to cover all the team members throughout the engagement.”
Optimising cloud spend
Another key way in which Entelect helps customers cut costs is by working with them to reduce infrastructure costs. “As an AWS and Microsoft solutions partner, we have access to their cloud engineers and experts, who help us find areas to optimise spend for our clients. Everyone has a cloud migration strategy and some companies just move across without thinking the move through carefully. This has led to cloud becoming a major expense, and the increased exchange rate doesn’t help.
"To resolve this at particular customers, we allocated engineers with cloud experience, tweaking and configuring how they run cloud infrastructure. By optimising their cloud spending, they saved millions over a year,” Ravić says.
The fact that Entelect’s longest-standing customers have partnered with the company for decades underlines the importance of good relationships: Standard Bank has been a customer for 18 years, Discovery for 15 years, FNB for 12 years. Absa for eight years and Anglo American for six years. “When customers are running very tight on budget and you can get them out of that jam and deliver, that relationship gets better,” he concludes.
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