A recent series of interviews and surveys by Info-Tech Research Group of over 160 IT leaders focused on cost cutting strategies that IT departments adapt to cope with economic downturns. The following recommendations are based on steps IT leaders take to maintain or increase staff productivity.
Reasons for Loss in Productivity
As lean IT shops took deeper cuts or scaled back growth, more than three-fourths of the cost cutting research respondents reported that IT staff morale took a plunge. Those who see a decline in morale report the following as some of the reasons for the loss in productivity:
- Staffing cuts negatively impact morale and lead to burn out. In a majority of cases, staffing cuts mean existing employees have to take on more tasks without receiving the appropriate training.
- Project delays or cancellations also have a negative impact on morale. Working on mundane maintenance tasks or help desk tickets, instead of on originally planned IT projects, leads to a lack of motivation for IT staff. This, combined with fewer projects, leads to a decline in productivity.
- Staffing cuts lead to a loss of good or experienced talent. Many IT leaders recognize the importance of good IT staff and do what they can to hold on to them. As good IT staff leave or retire, so do best practices and their experiences. This slows down IT’s productivity until someone with similar experience can be brought in and gets up to speed.
Recommendations
Slashing budgets, letting go of staff, or cancelling projects does not have to mean a decrease in IT staff productivity. Take the following steps to ensure productivity is maintained:
- Engage employees. Just because major ticket projects get delayed or cancelled due to lack of funds does not mean IT staff must only perform mundane tasks. There are often high-value, low-cost projects in every organization. Many organizations simply reprioritize projects based on cost savings. For example, some cut back on application upgrades, but instead implemented server virtualization or print optimization. Such reprioritization reduces costs while still giving staff the ability to work on value-add projects; they are just different types of projects than originally planned. During a downturn, IT departments can highlight these cost savings to the CFO or senior management team. For more about engaging employees, refer to the McLean Report research note, “Discount Morale Boosters for an Economic Downturn.”
- Maximize the value of software. After investing in specialized software packages, many organizations never see the efficiencies, productivity increases, and profits they were supposed to generate. Organizations that Info-Tech contacted identified which features of maintenance/support licenses get used and which tasks IT employees do manually – thereafter, they started using the maintenance software they were paying for and shifted employees still on the payroll to higher-value tasks (e.g. internal low-cost projects). If they were not using a feature they simply cancelled it.
- Utilize free software. Take advantage of free, low-cost or open source applications such as Google, Zoho, OpenOffice.org, ThinkFree, StarOffice (Sun), or Lotus Symphony. Alternatives to licensed software are becoming common in many categories, and can provide significant savings for organizations, as software tends to be a large item on the expense sheet. One of several respondents Info-Tech interviewed, a large non-profit organization, turned to open source for several sources of cost savings. The CIO authorized the use of open source products for Web filtering/monitoring, and Red Hat Linux for student networks in 16 locations. They also utilized a Web trending package that worked very well, even though it didn’t have every bell and whistle of commercial products; it got the job done well while saving greatly on the costs of licensing.
- Identify and share best practices and experiences. There are always those who are best at certain tasks based on their skills and competencies. As they accumulate a wealth of experience and best practices, they build a valuable reservoir of knowledge. While documenting their best practices sounds just as good as buying a best practice report, specificity to the organization cannot be replicated. To take advantage of this internal knowledge, organize workshops to share best practices with the rest of the organization or set up apprenticeship relationships where appropriate. A slower pace due to an economic downturn provides the perfect opportunity to build on such resources, which never seems to happen when the organization is running at full speed.
- Manage talent with a long term view. Continuous learning and skills improvement are critical to furthering organizational capabilities and individual career development. Learning must be tightly integrated with performance assessment and development to support continuous employee performance improvement. Utilizing knowledge of employee skills, performance and organizational needs, IT leaders can plan with a long term view on productivity. For more about affordable training during an economic downturn, refer to the McLean Report research note, “Find Economical Ways to Save Employee Training.”
Bottom Line
During an economic slowdown, fear of a recession or budget cuts can take the focus off of constant improvement and negatively impact productivity when it is most needed. Stay focused on creating value by following these five simple steps.
