Looking for something? Look here!
Want more unvarnished truth?
What you're saying...
What I'm saying now
I think tag clouds are pretty, and not to be taken overly seriously
##MoveWithGary #Home Inspection #MoveWithGary 111 Chop House 75 on Liberty Wharf 9/11 A Broth of a Boy ABCs Abiouness accountability activities alcohol Allora Ristorante Analysis Angry Hams ANSI/TIA 942 Anthony's Pier 4 Apple Application Armsby Abbey Arsenal Arturo's Ristorante Ashland AT&T Audio Automation baby Baby Monitor babysitting Back To School Bad News Bangkok Thai banks lending movewithgary Bar Bay State Common baystateparent BBQ BCP Bees BeeZers Before I die I want to... behavior Big Bang Bike Bill of Rights Bistro Black Box BlackBerry Boston Boston Marathon boundaries Boyston BPO brand Breakfast Bridge Bring Your Own Technology Budget Burlington Burn Burrito buyer BYOD Cabling Cambridge Camp Campaign career Casey's Diner Castle casual cCabling Cell Phone Central Square Change Management Cheers Chef Sun ChengDu Chet's Diner Children Chinese Christmas Christmas Families Holiday CIO Cloud coddle collage College College Acceptance co-lo Co-Location Co-Location Tier Power Cooling Comfort Food Control Country Country Kettle Crisis customer dad Dad Phrases damage daredevil Data Center Data Center Design Davios Day Care Dead Death declaration Del Frisco's Design Desktop Video dinner Disaster Recovery Divorce Do Epic Shit dodgeball downsizing Downtown Crossing DR driving Droid Easter Economic Kids Edaville Education Elbow Night Elevator Employee Engagement Erin Estate Planning Etiquette Evaluation events Exchange Expiration Dates Facebook Failing family Family Law Fatherhood Favorite things first time buyer Flash Flemings Fogo de Chão Food Hits and Misses Format Foundry on Elm Foxborough Frameworks fraternity Fraud French Fried Clams friends fun Fusion Generations germs Girl Scouts girls Global Go/No Go GPS Grafton Grandchild Grandpa Harry's hazing Healthcare Healthy Choices while Dining Out Help Desk Hisa Japanese Cuisine Historic holiday Home Home Inspection hope Horizons hose Hot Dog Hurricane IIT Assessment incident Indecision Indian Infrastructure Inn Innovation Insurance Internet Inventory Management iPhone IT IT Assessment IT Satisfaction Italian Jack Daniels Jakes Restaurant Janet Japanese Jazz Joey's Bar and Grill JP's Khatta Mitha kickball kids Laid off Lakes Region Lala Java Leadership Learning legacy Legal Legal Harborside Les Zygomates L'Espalier Liberty Wharf life transition lights out Linguine's loss Love Lucky's Cafe luxury luxury home M&M Macys Thanksgiving Day Parade mai tai Managed Application Services Managed Services managers Mandarin Manners Mark Fidrych marlborough marriage Mary Chung mass save Maxwell-Silverman Mediterranean meetings Memorial Day memory Mendon Mergers Mexican MiFi Migration Ming III miss MIT MIT CIO Symposium mmortgage Mobility Moes Hot Dog Truck MOM money mortgage Mother MoveWithGary Moving on Name nature neanderthal neighborhood Network new listing New York Marathon newborn Northborough Not Your Average Joe's Nuovo Nursing On-Call Operations Operators Oregon Club Organization Pancakes Pandemic Parental Control Parenting Patch Peeves People Perserverance UMASS growth Photography Play Plug and Run Predictable Pride Problem Process Production program Project Management propane PTA. PTO PUE QR Quick Response Rant re/max Real Estate Realtor Recognition Red Rock Resiliency Respect restaurant Restaurant Guy RFP ribs Ritual Root Cause Analysis rReal Estate Sam Adams Sandy Sapporo savings School Sea Dog Brewing Company Sea Dog Steak and Ale Seafood Seaport Security Sel de la Terra Service Service Desk Service Indicator Light sharing ShearTransformation SHIRO Shit Pump Shriners SHTF Simplification Skunk Works Skype Sleep sleepovers Sloan Smith & Wollensky soccer Son SOP sorority spanking Squarespace staffing staging Starbucks Status Reporting Steak Steve Jobs Storage Strategy stress Summer Sushi swimming Tacos Acalpulco teacher Technology Teen Telephony Temperature Strip Tenka terrorist Testing Texas BBQ Company Text Thai Thanksgiving in IT The Mooring Thomas Thought Leader Three Gorges III TIA 942 Timesheets Toby Keith Toddlers traditions Transition treehouse turnover TV Twitter unspoken moments Valentine's Day Value Vendor Venezuelan Verizon Vermont Video Vietnamese voice VoIP Watertown Wedding Westborough Korean Restaurant Westborough MA. StormCam WiFI Wi-Fi Wilbraham Wine Worcester work work life balance working Yama Zakura Zem Han Zitis

Entries in Budget (1)


Cutting the IT Budget

We need to cut the budget,” the CFO pronounced. “Things are tough out there, and we need to trim now to fight another day.”

The truth is most budgets have been tightened for a long time, and all CFOs are playing it conservatively.

“We used to be lean and mean,” grumbles an IT Director. “Now we’re just mean.”

It doesn’t need to be that way.

You can make a budgetary exercise a bit of a game, and rather than make it a loser sport, make it fun. Award the group or person with the largest budgetary percentage savings. The “award” can be a simple certificate (as opposed to an all expenses paid trip!)

Assuming you’ve already trimmed subscriptions, office supplies and other line items representing a small overall percentage, you’re probably looking at four major areas for further cuts.

  • Staffing – often, staffing is the first metric CFOs look at because they relate well to it and for years we’ve been saying the other line items are not able to be cut! Nobody likes to cut staffing, and as a reality you may have to do so. Some methods you may want to use include releasing marginal contributors (who in many cases know they are marginal and welcome the “package,”) and bringing in outside contractors.
    Bringing in contractors? This seems counterintuitive. The truth is there’s pressure on rates, and flexible staffing models allow you to turn up and turn down the spend rate. Some companies furlough contractors the last couple weeks of each year, rather than paying contractors to be around during a lighter work period (other companies use the contractors as a way to give permanent staff a year end break.)

    While often a challenge in larger companies, cutting base pay or bonuses (if bonuses are still given) is often something many employees would prefer to laying off their friends. You’ll have to explore this with Human Resources, and be crystal clear on communicating to the staff.

  • Software Licensing / Equipment licensing – Do your homework and make sure you are current and up to date on your inventories. Often companies find they’ve exceeded a license agreement, and some suppliers are willing to package an adjustment in with a purchase (while others resort to sales by extortion remediation!) In some cases, companies oversubscribe to particular software, and may be able to reduce license counts commensurately. Don’t fall into the trap of signing long term agreements to address…what feels good today will bite you in a couple years.

  • Maintenance – This is suppliers most protected line item! Major suppliers invest heavily in protecting their installed “annuity” revenue base. It is often well worth time exploring the maintenance agreements on major vendors, and dissecting them into component parts.
    Often there’s an upcharge for 24x7 service. Do you really need it?

    For example, a modest branch office may not need 24x7 hardware support for a router, especially if redundancy is in place. In fact, one financial services firm has procured (older generation) replacement routers for branch offices and has the desktop support area do “swaps”. The branch office ultimately gets better service, and the failed equipment is repaired on a time and materials basis.

    The same holds true on personal computers or phone devices. Why have a support contract at all? The machines continue falling in price, and a replacement is often able to be installed for a fraction of the cost (overall) of a maintenance program. We’d suggest the phone switch get premium service, and not the phone device.

    We’re not suggesting dropping maintenance across the board. Look at each item of maintenance and determine if there are other creative ways of dealing with it.

  • Communications - voice and data charges are another large line item in most budgets worthy of inspection. Many steer clear of this as they believe they really don’t control it (i.e. I don’t make all those calls) and the contracts already in place have a commitment period.
    Start with an accurate inventory, making sure all the line items are still in use (this is a tedious task, and some consulting firms will do this work for a percentage of the savings.)

    Are you making the most of the technology you have in place? For example, a call to a branch office “on net” is often cheaper if routed over the data network (especially if you have global offices.) This requires your telephony and data communications teams to work together, making sure the data network and phone systems are configured to eliminate dropped calls/ echo/ busies and the like. Note: while a coordinated dialing plan is a huge convenience, it is not needed to make this cost savings leap.

    Is your company still paying for cell phones? It’s not uncommon for companies to install the infrastructure for email access (like a BlackBerry Enterprise Server) and have staff fund their own devices.

    Issue an RFP for the remaining services. Communications contracts are often for multiple years, and existing suppliers will be reticent to adjust pricing if they feel you are locked in. Look at your contract – many have modest minimums, so you can actually switch vendors without violating your existing contract! Your incumbent suppliers need to believe their business with you is at risk for you to get breakthrough pricing. This requires a bit of hardball, and staff need to be echoing the same message to the vendors.

Then again, there is another less “in your face” approach we saw successfully used as a major financial service firm. Each (major) vendor was contacted and told a 7% reduction was requested. While there was some hesitation, every vendor came through with a 7% reduction. One might argue a larger reduction percentage would have yielded greater savings overall, and we’d counter vendors understood the need for a modest cut and they were willing to participate rather than risk their business. In many cases, the vendors ultimately appreciated the soft approach rather than the stick.

One last word on the subject of cutting budgets. Please keep your training budgets intact. Sending staff to training is like changing the oil on the car….it must be done or you’ll have problems later. Cut travel budgets, encourage more cost effective hotels, explore online courses….and keep your staff knowledgeable, up to data and engaged!