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5
Strategies To Reduce IT Costs
By Dennis Sommer (www.dennissommer.com)
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.
About The Author
- Dennis Sommer
 Dennis
Sommer is the founder and CEO of Executive Business Advisers,
a management consulting firm helping senior executives
maximize both sales and profit growth. Dennis specializes
in strategic planning, sales, marketing and operations
performance improvement.
Dennis is a highly
sought after author, keynote and seminar speaker on
sales, leadership and business best practices.
Contact Dennis at www.executivebusinessadvisers.com
or www.dennissommer.com
.
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