It is no surprise that the economic situation in our country will directly impact enterprise IT/Cyber budgets. No one wants to cut costs. Yet, IT leaders are obligated to contribute to organisation-wide cost-cutting efforts, and must continuously demonstrate fiscal responsibility.

However, just because your budget is being cut, does not mean that your organisation’s expectations of IT are any lower… Doing the same or sometime even more with less money may become a new mandate for many IT shops in Australia.

A good IT leader doesn’t wait for the economy to take a turn for the worse before looking at how they are spending money. In fact, the proactive CIO is always looking to get the best value for their IT dollar and being prudent with their expenditures.

But cutting costs unwisely can quickly lead to a race to the bottom. Before taking an axe to your budget, you need to clearly understand where you are spending your money, the value that those expenditures bring to the organisation, where money can be saved with the least impact, and if necessary, how to engage with business stakeholders to get their buy-in before you affect their ability to do business.

David Yackness, Director, CIO Advisory Info-Tech Research Group

Traditionally, IT tries to cut costs by:

• Shielding the plan from the CFO and “the business” to ensure that Security’s priorities are protected.
  While putting yourself on an island may buy you some time, you are making the approval of Security budget’s proposals an uphill battle.

• Finding many small efficiency-gains in IT’s existing services to avoid large cuts.
  It may seem like a good idea to avoid large, highly visible cuts and instead make small, incremental gains in efficiency. However, efficiency initiatives are almost never sufficient to achieve significant cuts in IT spending and are rarely worth the time and effort.

• Convincing senior leadership that IT is already as lean as it can get without major drops in service levels.
  Again, pushing back on a cost-cutting mandate has a low rate of success. When facing organisation-wide cost cuts, every business unit is expected to do its part and even if you are right, you won’t find a sympathetic ear.

• Repeating cut and paste cost-cutting “ideas” that other organisations have tried.
  A “quick fix” might help move the dial in the right direction, but it likely won’t be enough. Inevitably, IT departments facing steep cuts will have to put its capabilities and operations under the microscope.

Partnering with Info-Tech Research Group, CISO FOR HIRE P/L can help you develop a cost-cutting plan and achieve the saving you need by following these steps:

1. Understand the organisation’s cost-cutting mandate before you select your initiatives.
   
   Think of “how much?“ and “how soon?” to avoid unintended consequences for the business. Make sure your aim is true before pulling the trigger.
   
   Our cost-cutting planning tool will assist you in the selection of initiatives based on the magnitude and urgency of the given mandate.
   
   
2. As the saying goes, don’t prune dead trees – cut them down.
   
   Select cost-cutting initiatives that work within your timeline and reflect your level of risk tolerance. So, don’t undermine essential IT/Security services by seeking incremental efficiency gains but rather eliminate or take BIG cuts from low-value services.
   
   Engage with us to request the CIO Vision Diagnostic which will help you identify the low-value IT services.
   
   
3. Get approval for your cost-cutting initiatives and have a grip on cost savings utilising our Cost Monitoring Plan.

Meanwhile, checkout this Info-Tech’s list of “quick wins” which are low risk, quick-to-implement initiatives that can enhance your reputation as a fiscally prudent IT leader and build a positive relationship with the CFO. The odds are you have already thought of some of these – but may find some of these useful and practical:

• Review the budget and invoices for redundancies and errors.
• Reduce spending on travel.
• Reduce spending on training.
• Reduce spending on office supplies.
• Reduce spending on food and refreshments.
• Reduce spending on employee perks.
• Measure the performance of your WAN network and seek compensation for under-delivery.
• Recover telecom over-payments.
• Eliminate personal printers and recover other printing costs.
• Eliminate unfulfilled headcount positions.
• Review bandwidth consumption and reduce where warranted.
• Decrease desktop support for the use of office tools and applications.
• Revise the costs and terms of vendor contracts currently being negotiated.

Does this sound like what you need to set yourself up for tomorrow’s success?

Photo by Hans-Peter Gauster on Unsplash