Building and Communicating Your IT Cost-Cutting Strategy for the COVID-19 Recession

Plot a strategic course for budget and cost management in reactive times.

Onsite Workshop

Without an optimized approach to budget and cost management you risk:

  • Strained relationships with the business
  • Missed opportunities
  • Bad decisions

With an optimized approach to budget and cost management you can:

  • Improve relationship with the business
  • Seize opportunities
  • Make better decisions

Module 1: Understand Your Mandate Requirements

The Purpose

  • Determine your mandate and requirements for cost optimization.

Key Benefits Achieved

  • A clear understanding of your current state

Activities: Outputs:
1.1 Assess internal budgeting constraints: mandatory cuts, caps on budget expansion, line-item constraints, etc.
  • Budget implications of organizational objectives.
1.2 Review relevant organizational objectives and determine impact on IT budget.
  • Relevant IT CapEx and OpEx benchmarks for the period.
1.3 Review IT service catalog and categorize services as KTLO, business support, and transformational.
  • IT service catalog recategorization
1.4 Get an outside perspective: review existing research on spend in the industry across different periods of growth or downturn.
1.5 Adapt (where needed) a best-practice IT budgeting template and adopt a budgeting account structure.

Module 2: Set Your Cost Management Objectives

The Purpose

  • Understand current business cycle and develop an appropriate mode of response.

Key Benefits Achieved

  • Budget impact scenario descriptions
  • Cost management guiding principles for each scenario response

Activities: Outputs:
2.1 Identify the position of the organization within the business cycle: growth, slowdown, or downturn.
  • Identified current business cycle
2.2 Articulate the profile of the business cycle and identify three scenarios of impact.
  • Developed three scenarios for your budget and cost management plan
2.3 Determine the IT organization’s mode of response – proactive, reactive, strategic – for each scenario.
  • Determined current mode of response
2.4 Prioritize IT services and identify capacity metrics and targets.
  • Prioritized services and capacity metrics
2.5 Articulate guiding principles for the IT organization’s response across four pillars: workforce productivity, asset efficiency, vendor partnership reinforcement, and project prioritization.
  • Confirmed guiding principles

Module 3: Review Your Universe of Options

The Purpose

  • Gain an assessment of your options around the three scenarios developed in module 2.

Key Benefits Achieved

  • An understanding of all your options of response in order to make the right cost optimization decisions

Activities: Outputs:
3.1 For each impact scenario, identify a long list of possible initiatives around workforce productivity, asset efficiency, vendor partnership reinforcement, and project prioritization.
  • Long list of possible cost management initiatives per cost management pillar.
3.2 Identify enabling initiatives.
  • List of enabling initiatives.

Module 4: Identify Your Key Initiatives

The Purpose

  • Decide on the initiatives that will be impacted by your cost optimization.

Key Benefits Achieved

  • List of initiatives to include as part of your cost optimization efforts.

Activities: Outputs:
4.1 For the most likely scenario, and considering guiding principles, identify cost effect (quantitative or qualitative) of each initiative.
  • For most-likely scenario: key initiative descriptions and cost effect.
4.2 Brainstorm key initiatives for the year to address each scenario.
4.3 Create initiative profiles.
4.4 Identify initiative timelines and champions.

Module 5: Build a Cost Management Action Plan

The Purpose

  • Finalize a budget and cost management plan.

Key Benefits Achieved

  • A ready-to-present budget and cost management plan

Activities: Outputs:
5.1 Develop a one-year budget and cost management action plan for one (most-likely) scenario.
  • One-year budget and cost management action plan
5.2 Update the one-year spending budget corresponding to the budget and cost management action plan.
  • Spending budget.
5.3 Set up review time for workshop deliverables: one-year budget and cost management action plan, and spending budget.

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