It’s always interesting to me which blog topics generate interest. Two weeks ago, I asked the #CIO Twitter community to offer their ideas for IT cost cutting and the summary was one of the more active posts lately, especially on LinkedIn groups like the Forbes CIO Network. I have summarized the comments below. Thanks to Robert Marchant, Jerry Rosenbaum, Puneet Dhawan, Reuben Thomas, Krishna Pulipati, Curtis Todd and Roger Jennings for their thoughtful comments.
- Cancel that cyclic PC Desktop estate refresh and move to a centralized virtual desktop model
- Share more services and products among business and IT departments or teams
- Make every piece of hardware and software count
- Realign managers to technical staff ratio
- Keep departments 5% under-staffed
- Audit decisions and decision makers for vendor and product selection and standards adherence
- Encourage employees for self-paced learning
- Align team structures and incentives to deliver cost-out
- IT teams try to do things which they are not good at simply to maintain a sense of control, eg, an Application services team managing its own servers. This will not be their core competency and they will not be able to focus on driving efficiencies in managing the servers. Have a separate team manage servers and create incentives them to reduce cost of operations.
- There are a lot of ideas with those closest to the ground. The ideas may be small, but they can add up to a significant number. Build an environment where everyone in the IT organization understands that cost-out is important. And then ensure they have the resources to execute.
- Re-negotiate maintenance contracts based on company margins
- Use more open source products
- Launch a holistic supplier sourcing and contracting campaign which will provide an overall strategic plan to optimize negotiations and improve vendor performance and costs while reducing risk.
One commenter said it well:
I am reminded of a quote from Grace Hopper. There are two costs – the cost of doing something and the cost of not doing something.
So when trying to save costs, look at all the costs.
The ideas we’ve generated are great. Another area to consider is rationalizing your application portfolio. One of our health care clients has over 100 ERP systems. Talk about cost cutting opportunities!
Did you enjoy this article? Please subscribe to CIO Dashboard to receive the latest posts!