Five Steps For Controlling Your IT Technology Costs
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You've just been called into the CEO's office for an important meeting. Your
welcomed into the office and asked to take a seat. Your CEO says, the reason I
asked you in today, is to discuss our IT strategy for next year. Specifically, I
want to discuss our objective to reduce overall IT costs by 30% while
maintaining excellent service levels and supporting our business growth.
Now, you think to yourself, this is completely insane. How can we continue to
provide top notch support of the organization with a 30% budget reduction. In
other words, how am I going to do more with less. If you are not prepared for
this type discussion, then your best plan of action is to say you will go back
and develop a plan of action achieving these new goals. Or, if you have reviewed
this article and outline a plan of action in the likelihood this conversation
every comes up, you will be prepared to discuss your strategy at this time.
Are you ready to get the most from your technology while protecting the
bottom line? We have five steps that should be discussed during your IT
strategic planning sessions.
Over half your IT budget is spent on staffing. Look at consolidating your
distributed locations, data centers, call centers, repair centers, etc.
Duplication of job functions is more difficult to manage, creates costly
management overhead, and drastically increases staffing costs.
Standardize Processes and Platforms
Complexity and re-work is time consuming, risky, and costly. Standardization
makes everything easier, including development, training, maintenance, and
upgrades. If possible, standardize on development and management methodologies,
processes, and templates to reduce training and improve productivity.
Standardize on hardware platforms, business applications, operating systems, and
desktops to receive volume discounts from the vendors.
Automate Manual Processes
Tools that can automate current manual processes like software distribution
to desktops, IP address configurations, processing paper documents, etc. will
save your organization big money in staff efficiency. This staff can be moved to
other high priority projects performing more valuable services.
It is vital that you negotiate with your vendors. Never automatically sign a
new contract once the current contract is up. Twelve to eighteen months before a
contract is up, start discussing your needs with the current vendor and other
vendors specializing in this area. Put together a Request For Proposal (RFP) and
solicit bids from multiple vendors. Learn from your current or past contracts,
demand specific service levels, include penalties for failing to meet
performance goals, and always negotiate the price.
Outsource Specific Tasks
Investigate the outsourcing of specific tasks that are not business critical.
Selective outsourcing can make your department's activities much simpler,
improve performance by concentrating on core critical applications, and reduce
Are you ready to take action? Before jumping into your cost reduction
strategy, you will need a plan of action. Identify your key priorities.
Determine which areas will add the most value to the organization. Identify who
should be involved. Which areas will you focus on first and when will the
deliverables be complete. Determine your expected cost savings and then track
these measurements over time.
By focusing on these five target areas you will have a great start on your
cost reduction strategy.
About the Author
Dennis Sommer is a widely respected and world renowned authority on sales,
business development and leadership performance improvement. He is a leading
adviser, author, and speaker providing clients with practical strategies that
improve personal and organization performance. He has held numerous consulting,
sales, and leadership level positions with Accenture, Jo-Ann Stores, and CA,
Inc. Dennis is also founder of two successful technology and management
consulting firms. Please contact Dennis at: email@example.com or
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Article Published/Sorted/Amended on Scopulus 2007-11-20 00:10:50 in Computer Articles