The challenge
- Capex and Opex growth rates, or even as budgets, will most likely continue to decline in the coming years.
- Most common quick-win initiatives have been taken already and do not satisfy the company's mandate.
- Typically, cost-cutting initiatives fail to deliver the promised savings. They also tend to take longer than anticipated.
- Cost-optimization initiatives often have unintended side-effects, potentially even off-setting the savings and leaving the business dissatisfied.
Our advice
Insight
- IT is an integral part of the business value creation chain. Cost-cutting here means that the entire company can be affected. IT must work with the business in partnership to convey the full implications.
- Avoid large scale cost-cutting or making all of the cost cuts at once. Do this in a phased approach so that you can avoid or manage the consequences.
- If a service is delivering the intended value, then cut it completely.
Impact and results
- Take a value-based approach to cost-cutting.
- Reduce your IT spend in such a way as to continue to deliver on the essential services.
- Always involve the business in cost-cutting exercises.
- Develop a cost-cutting plan that avoids unintended business interruptions.
The roadmap
Besides the small introduction, subscribers and consulting clients within this management domain have access to:
Get started
Our concise executive brief shows you why you should take a value-based cost initiative in your company. We'll show you our methodology and the ways we can help you in completing this.
- Minimize the Damage of IT Cost Cuts – Phases 1-3 (ppt)
Understand your mandate
Determine your approach and then take immediate action.
- Minimize the Damage of IT Cost Cuts – Phase 1: Understand the Mandate and Take Immediate Action (ppt)
- Cost-Cutting Plan (ppt)
- Cost-Cutting Planning Tool (xls)
Select initiatives
Identify all initiatives and then build your roadmap.
- Minimize the Damage of IT Cost Cuts – Phase 2: Select Cost-Cutting Initiatives (ppt)
Communicate to the business and get approval for your plan.
When you will execute your plan, adopt change management best practices.
- Minimize the Damage of IT Cost Cuts – Phase 3: Get Approval for Your Cost-Cutting Plan and Adopt Change Management Best Practices (ppt)
- IT Personnel Engagement Plan (doc)
- Stakeholder Communication Planning Tool (xls)