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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

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

Course information:

  • Title: Cost Optimization
  • 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: Academy: Cost Optimization | Executive Brief

Onsite Workshop

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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

Member Testimonials

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After each Info-Tech experience, we ask our members to quantify the real time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this Blueprint, and what our clients have to say.

Client

Experience

Impact

$ Saved

Days Saved

Varian Medical Systems, Inc.

Guided Implementation

10/10

$31,106

5

Cloetta Sverige ab

Guided Implementation

8/10

N/A

N/A

SUNY New Paltz

Guided Implementation

7/10

N/A

N/A

Adtran, Inc.

Guided Implementation

8/10

N/A

N/A

Jefferies LLC

Guided Implementation

7/10

N/A

N/A

Oregon Department of Consumer and Business Services

Guided Implementation

8/10

$13,236

N/A

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