5 Steps For Controlling Your IT Technology Costs
Copyright 2006 Dennis Sommer
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.
Consolidate Centers
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.
Negotiate Wisely
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
overall costs.
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.
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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:
dennis@btrconline.com or http://www.btrconline.com
