Emergency Cost-Cutting

Scott Francis
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Sandy has a new post about Gartner’s latest webinar on emergency cost cutting in IT.  The webinar is over but likely they’ll probably allow replay of the webinar soon with registration on their site (if they haven’t already). I think Sandy does a fantastic job of summarizing the call however, along with some excellent color commentary. If I can sum up Sandy’s cautionary notes:
  1. Be careful that your cost-cutting doesn’t cost you your long-term organizational learning and viability.  Some of the recommendations from Gartner will help you survive this year, but leave you wounded heading into the recovery.  If you’re company is strong enough, be prudent about what you cut and retain your ability to fight when the economy turns.
  2. Be careful about abandoning SLA’s to the business -they’re your customer and if you aren’t living up to their expectations they may decide they can get bad service at a lower price… (Most people will believe that good service costs more… but if the service is already bad, they won’t see as much downside in trying something cheaper).
I’d add a couple of my own:
  1. Make sure the projects you DO take on can be tied to ROI – real cost cuts in IT, or real business benefits that the business is signing up for (usually operational savings).
  2. Make sure you bite off manageable projects – projects you can complete this year start earning a return for the business this year.  Simplify the big projects, figure out how to get 20% of the benefit this year, rather than getting 100% of it in 18 months.  Then get the next 20%, etc.  (Some call this, continuous process improvement or iterative development… I call it putting money on the table).
  3. Eliminate non-essential positions if you can,
  4. Do not create additional bureaucracy for your employees, for example, to get reimbursed for legitimate business expenses.  This is only going to hurt your productivity as a company – but it is a very much hidden cost.  It won’t show up as a bottom-line cost, it will show up overall as less revenue per head though… Instead, a better strategy would be to be more clear about what is reimbursable, and to take longer to reimburse (say, 30 days instead of 15).
  5. Don’t stop going to conferences and consulting with experts.  These may provide just the ideas you need to save your project, team, organization, company.  In this kind of environment we need our creative energy fed.
  6. Figure out how to help the business with the real problems they are faced with.  They’re your customer, figure out how to do more of what they really care about, and less of what they don’t.