Strategic IT Cost Cutting
IT leaders are being asked to cut costs in strategic ways. It’s a delicate dance, and one that requires a lot of careful planning. You’ll want to mitigate damage, and look long-term at the business when making these cuts. Aim to remove SaaS based services that are luxuries, as opposed to necessities. You can always remove those costs now, and re-introduce them later on when the budget is less stifled. Have legal/finance look over contracts with any possible vendors you want to cut ties with.
Undertaking widespread cost cutting initiatives doesn’t come without its risks. Consider the company-wide consequences of all decisions. Cutting costs in the wrong places will have a seriously negative impact across the company, including, but not limited to, employee morale. It’s obviously difficult to be tasked with cost cutting. Cross-departmental alignment is key.
If your company hasn’t made a shift to the cloud, now would be a great time. Shutting down costly data centres can bring immediate positive return. Start by identifying the most obvious applications that can be moved to the cloud, such as management systems. Aim to drastically reduce hardware cost, which will, in turn, reduce maintenance costs. Telecommunications are also easily moved to the cloud, and often have quick cost saving returns.
Ensure that any new implementations and purchases are planned well, with a clearly defined endgame. Studies over the past few years have shown that nearly half of all digital transformation initiatives fail to meet their goals. This has resulted in hundreds of billions in wasted IT spend. It’s no secret that most companies are taking a digital approach, but many fail when they are unable to fully realize their transformative goals. Many companies fear becoming irrelevant due to digital inaction, but those fears result in missteps, and financial losses.
Keep the customer needs in mind at all times whether you’re cutting costs, or implementing new technologies. The most successful companies will be the ones that look long term, beyond COVID-19, and focus on customer needs moving forward. Every department should have a seat at the table when these important decisions are made.
Now is not the time to be working in silos!