Where to Make Cost Savings in IT

2008 has been a challenging year for most companies and a worrying time for just about everyone. I had the following question the other day and I thought I’d share my answer here.

Q. We are looking at where we can save money on our IT (as elsewhere) over the coming months and through next year? We will probably need to freeze new investments - at least in the short term - but are also looking for other areas we can make saving? Are there any specific areas that people could suggest we look at?

Also we had originally hoped to improve our customer management systems next year. If we do have the funds is this a good area to be investing in - or are there other areas that might have a bigger impact on survival and future growth?

We are a medium-sized company that has been growing quickly - which has put a strain on existing IT. We need to support a couple of small offices as well as the Head Office - and mobile and home working have also become a major factor in recent years.

A. The first thought is that you don’t have to make blanket decisions, If an investment will generate a revenue stream or significant savings it is still worth doing. So make sure that organisationally you have control of IT spending and properly and cynically evaluate the cost, savings and income you can realistically achieve. If the bottom line is positive it is still worth doing.

The obvious savings will come through not making upgrades unless absolutely necessary. Upgrading PC's or software can probably wait unless there is a pressing need such as hardware becoming unreliable or critical software going out of support. Remember that if staff are losing productivity through poor systems it may still be worth making the upgrades.

Typically companies that stay visible through a downturn are the ones that recover fastest in the inevitable upturn. You should therefore continue to invest in marketing, albeit highly targeted and exploiting low cost channels, and customer management is a critical part of this. Evaluate systems that will grow with you rather than simply being cheap now and forcing you to change later. Choose the components that will enable you to realise an immediate benefit. Consider SAAS as a way of reducing the set-up time and infrastructure investment. Don't just rely on the supplier marketing material make sure you talk to real users of the systems and gauge their experience.

Mobile and home working are a great way to reduce costs and improve productivity. Bear in mind that you should be reducing your office infrastructure provision as you move to the new model. Mobile and Home working is an alternative model to providing a fully equipped office and you should not be providing both.

Review your current contracts and service providers. Is there scope for a lower cost by giving more to one provider, e.g. data and voice across all your sites and mobile employees? This is a bad time for everyone and there is plenty of opportunity for negotiation and non-standard packages.

I hope this is useful. Feel free to drop me a line if you would like to discuss any of the points I've raised.

Chris Bryan