20 ‘tough- as- nails’ cost cutting strategies

In tough economic times, all enterprise departments are required to tighten their belts. To help IT execs navigate through the cost-cutting maze, Gartner analysts recently presented a list of 20 ways that IT execs can slash expenses.

1. The most obvious place to start is people costs. Gartner estimates that 37 per cent of the average IT budget is dedicated to personnel, so this represents a major opportunity to save money. Gartner recommends a blend of hiring freezes , reducing or eliminating special bonuses, cutting back on outside contractors. Also, global companies that have opened offices in remote areas should consider bringing those workers back home.

2. Flatten the organization. (See our 2001 story on how Cisco flattened its structure ) Instead of having one person manage six or seven employees, trim some of that middle management and have your IT execs manage more like 20 people. A flat organization not only saves money but also can lead to more efficiency.

3. Move to shared services . In other words, consolidate things like help desk into one group that services the entire company.

4. Even if you have to borrow somebody from another part of the company, bring a finance person into your leadership team so that person can analyze your budget and find ways to help you trim costs.

5. Don’t ignore “unmanaged” costs like printers or data center power.

6. Go back and check your invoices to make sure your vendors are charging you what your contract specifies. An example would be if your wireless vendor agreed to give you free shipping when it sends new cell phones to remote workers. A few months later, shipping charges might start appearing on your cell phone bill, and if you don’t check, you’ll never know.

7. Eliminate unused software and modules.

8. Get tougher with vendors when it comes to negotiating contracts. Don’t be afraid to switch vendors, or at least go the first step of determining what it would cost to switch.

9. Buy a telecom expense-management service. It pays for itself and more.

10. Deploy a corporatewide plan for buying cell phones. Then, buy a cell phone plan that optimizes expenses. This will be cheaper than letting employees buy phones and plans and then expense them.

11. If there are places where you don’t need five nines of availability, settle for three nines. It will save you money when you negotiate with your vendor.

12. Consider buying a videoconferencing unit rather than constantly renting.

13. Where possible, use the Internet as a replacement for expensive WAN transport services.

14. Defer moving to Vista. If your PC hardware is holding up, consider sticking with it another year.

15. Use commodity products wherever possible, and skip best of breed in cases where “best of need” will suffice.

16. Consolidate and virtualize servers.

17. Reduce storage costs via data deduplication and other methods.

18. Use better processes and policy to make better use of existing tools.

19. Deploy IP telephony and VoIP as a way of cutting costs for moves, adds and changes.

20. Harvest unused software licenses and reuse them when a new employee makes a request.

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Jim Love, Chief Content Officer, IT World Canada

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