- 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.
Minimize the Damage of IT Cost Cuts 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.Besides the small introduction, subscribers and consulting clients within this management domain have access to:
- Minimize the Damage of IT Cost Cuts – Phases 1-3
1. Understand the mandate and take immediate action
Determine your approach for cutting costs.
- Minimize the Damage of IT Cost Cuts – Phase 1: Understand the Mandate and Take Immediate Action
- Cost-Cutting Plan
- Cost-Cutting Planning Tool
2. Select cost-cutting initiatives
Identify the cost-cutting initiatives and design your roadmap.
- Minimize the Damage of IT Cost Cuts – Phase 2: Select Cost-Cutting Initiatives
3. Get approval for your cost-cutting plan and adopt change management best practices
Communicate your roadmap to the business and attain approval.
- Minimize the Damage of IT Cost Cuts – Phase 3: Get Approval for Your Cost-Cutting Plan and Adopt Change Management Best Practices
- IT Personnel Engagement Plan
- Stakeholder Communication Planning Tool
Workshop: Minimize the Damage of IT Cost Cuts
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 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.
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
1.1 Develop SMART project metrics.
1.2 Dissect the mandate.
1.3 Identify your cost-cutting stance.
1.4 Select and implement quick wins.
1.5 Plan to report progress to Finance.
Outputs
Project metrics and mandate documentation
List of quick-win initiatives
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
2.1 Identify cost-cutting initiatives.
2.2 Select initiatives.
2.3 Build a roadmap.
Outputs
High-level cost-cutting initiatives
Cost-cutting roadmap
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
3.1 Customize your cost-cutting plan.
3.2 Create stakeholder engagement plans.
3.3 Monitor cost savings.
Outputs
Cost-cutting plan
Stakeholder engagement plan
Cost-monitoring plan