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01 Mar 2010

You’ve borne the brunt of the global financial crisis, kept your executive team at bay by picking all the low hanging fruit when it came to cost saving – maybe you even cut an artery or two. And it’s not over yet; most organisations are still very cost-adverse. So, what do you do now when more savings seem elusive? A realistic budget You should be building your budget from zero up, not just factoring last year’s budget. Understand where all your costs are coming from and if they still exist. This means finding out the truth about the issues and needs. Do it with transparency and ensure you have supporting documentation for everything – this includes a justification listing intangible benefits and future opportunities, as well as the monetary aspects. Write them in ‘business speak’ and don’t use technical jargon, to ensure they are understood. Be honest, especially with yourself; for example, if you had budget overruns in specific areas, factor in these risks. When presenting your budget, always move any debate from ‘costs’ to ‘value’ and explain what services or projects will be sacrificed if cuts are made. "Not everything that can be counted counts, and not everything that counts can be counted." – Albert Einstein   Rationalisation This is really an extension of budgeting, but it’s worth a separate mention. Re-examine everything (both capital and operational expenditure) and ask yourself: "do we really need this" Look for systems where user numbers have dwindled to the point where they are no longer justifiable, especially if others are using a new system. A good benchmarking technique is to ask yourself if you would use your own money to pay for it. Don’t be afraid to renegotiate existing contracts with suppliers, as they won’t want to lose you. "A man should look for what is, and not for what he thinks should be." – Albert Einstein   Simplification Do you really need 24x7, 99.999%, high complexity everywhere? The reality is that your team has spent a lot of time and money making your systems highly reliable. As a result, many areas of your business may be over-engineered, with the associated costs. Removing complexity from systems and processes can reduce costs significantly. Have a close look and see if this applies to any of your systems – perhaps a ‘warm’ spare will do instead. This applies equally when designing new systems. "Make everything as simple as possible, but not simpler." – Albert Einstein   Modernisation New technology can be rich in features, often giving the ability to replace many processes or devices with one. This in turn can reduce operational costs and reduce complexity. The most prolific example is server virtualisation, but other examples include PABXs with open source solutions such as Asterisk. In these cases we are talking about adopting new technologies where a true economic advantage exists, not just a lower-powered, faster model. Investment can be very low, especially when dealing with open source solutions. Innovation Yes, this term is getting a little overused, and all it means is being brave enough (or smart enough) to introduce new ways of doing things, and that’s the bread and butter of the IT profession. We all know innovation is hard work, but there is more than one approach; try incremental innovation rather than the more typical radical innovation.Trial and implement open-source solutions for systems with high licence/maintenance costs; use a wiki. It’s our job to ensure either we or our team challenge the status quo. "Imagination is more important than knowledge... " – Albert Einstein   Externalisation Companies have externalised costs for decades, so try it at a departmental level. Sneak costs into other departments’ budgets, by externalising processes and their associated costs. Get more users or business units to do their own testing, training and documentation for new systems and processes, as it makes sense to move this to the coal face, where it is best understood. Additionally, release software on a limited trial rather than testing for another couple of weeks; you’ll be surprised how efficient it can be (but you’ll need to have immediate support available if you do this). Expansion By increasing your functions, processes and responsibility, you may be able to get the budget that goes with it. Look to the department with the largest budget and get a piece of their action by taking over some of their processes. There are lots of things IT can do more efficiently, especially structured processes, such as project management. Collaboration Above all, don’t do it alone; keep improving your relationship with every department, and look to them for ideas and share yours.

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