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Minimize the Damage of IT Cost Cuts

When IT cuts costs, everyone feels it.

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Contributors

  • Jeremy Albritton, Vice President Financial Planning & Analysis, USO Inc.
  • Ken Piddington, CIO and Executive Advisor, MRE Consulting
  • Joe Evers, Consulting Principal, JcEvers Consulting Corp.

Your Challenge

  • Average growth rates for Opex and Capex budgets are expected to continue to decline over the next fiscal year.
  • Common “quick-win” cost-cutting initiatives are not enough to satisfy the organization’s mandate.
  • Cost-cutting initiatives often take longer than expected, failing to provide cost savings before the organization’s deadline.
  • Cost-optimization projects often have unanticipated consequences that offset potential cost savings and result in business dissatisfaction.

Our Advice

Critical Insight

  • IT costs affect the entire business, not just IT. For this reason, IT must work with the business collaboratively to convey the full implications of IT cost cuts.
  • Avoid making all your cuts at once; phase your cuts by taking into account the magnitude and urgency of your cuts and avoid unintended consequences.
  • Don’t be afraid to completely cut a service if it should not be delivered in the first place.

Impact and Result

  • Take a value-based approach to cost optimization.
  • Reduce IT spend while continuing to deliver the most important services.
  • Involve the business in the cost-cutting process.
  • Develop a plan for cost cutting that avoids unintended interruptions to the business.

Research & Tools

Start here – read the Executive Brief

Read our concise Executive Brief to find out why you should take a value-based approach to cutting IT costs, review Info-Tech’s methodology, and understand the four ways we can support you in completing this project.

1. Understand the mandate and take immediate action

Determine your approach for cutting costs.

2. Select cost-cutting initiatives

Identify the cost-cutting initiatives and design your roadmap.

3. Get approval for your cost-cutting plan and adopt change management best practices

Communicate your roadmap to the business and attain approval.

Guided Implementations

This guided implementation is a five call advisory process.

Guided Implementation #1 - Understand the mandate and take immediate action

Call #1 - Start cost-cutting project and determine the cost-cutting stance.
Call #2 - Decide on quick wins for the project and determine how to report progress to Finance.

Guided Implementation #2 - Select cost-cutting initiatives

Call #1 - Decide on how to determine initiatives for cost cutting.
Call #2 - Review cost-cutting initiatives and select those to be put on a roadmap.

Guided Implementation #3 - Get approval for your cost-cutting plan and adopt change management best practices

Call #1 - Transform roadmap into a finalized plan and engage stakeholders to achieve adoption.

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Cost Optimization Course

When IT cuts costs, everyone feels it.
This course makes up part of the Financial Management Certificate.

Course information:

  • Title: Cost Optimization Course
  • Number of Course Modules: 4
  • Estimated Time to Complete: 2-2.5 hours
  • Featured Analysts:
  • David Yackness, Sr. Research Director, CIO Practice
  • Gord Harrison, SVP of Research and Advisory
  • Now Playing: Executive Brief

Onsite Workshop

Discuss This Workshop

Book Your Workshop

Onsite workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost onsite delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

Module 1: Understand the Mandate and Take Immediate Action

The Purpose

  • Determine your cost-optimization stance.
  • Build momentum with quick wins.

Key Benefits Achieved

  • Understand the internal and external drivers behind your cost-cutting mandate and the types of initiatives that align with it.

Activities

Outputs

1.1

Develop SMART project metrics.

1.2

Dissect the mandate.

  • Project metrics and mandate documentation
1.3

Identify your cost-cutting stance.

1.4

Select and implement quick wins.

  • List of quick-win initiatives
1.5

Plan to report progress to Finance.

Module 2: Select Cost-Cutting Initiatives

The Purpose

  • Create the plan for your cost-cutting initiatives.

Key Benefits Achieved

  • Choose the correct initiatives for your roadmap.
  • Create a sensible and intelligent roadmap for the cost-cutting initiatives.

Activities

Outputs

2.1

Identify cost-cutting initiatives.

  • High-level cost-cutting initiatives
2.2

Select initiatives.

2.3

Build a roadmap.

  • Cost-cutting roadmap

Module 3: Get Approval for Your Cost-Cutting Plan and Adopt Change Management Best Practices

The Purpose

  • Finalize the cost-cutting plan and present it to the business.

Key Benefits Achieved

  • Attain engagement with key stakeholders.

Activities

Outputs

3.1

Customize your cost-cutting plan.

  • Cost-cutting plan
3.2

Create stakeholder engagement plans.

  • Stakeholder engagement plan
3.3

Monitor cost savings.

  • Cost-monitoring plan

Search Code: 80168
Published: March 21, 2016
Last Revised: October 7, 2016