Hidden hazards of cutting costs

There is a dearth of so-called “low hanging fruit” when it comes to squeezing enterprise IT costs. As our feature on balancing IT costs during the recession indicates, because IT departments were left lean and efficient after the dotcom crash, they have to be very smart about achieving further reductions.
Tools in the cost-cutting box include telecoms and asset management negotiation to get better deals, deferring investment, and increasing investment in virtualization software.
Driving cost out of software licensing requires tough and savvy negotiation strategies, and users are often at a disadvantage against much more experienced suppliers. A protracted refusal by the major software suppliers to reduce licensing costs might result in moves towards open source and software as a service. But a better approach is to increase buyer power by clubbing together more. However, too aggressive an approach to suppliers will just drive some out of business, to the overall detriment of the IT market.
Outsourcing and offshoring always offer the promise of driving out costs, but, as is reported in this issue, pushed too far they can become damaging to the health of IT in business. And so, Lloyds TSB management has expressed concerns internally that the increasing use of offshore IT services is reducing the ability to service business critical systems.
UK companies are, more generally, at risk of creating skills gaps in their IT leadership. Future business IT executives will not have the right skills unless they get exposure to development in the earlier phases of their careers.
Outsourcing and offshoring are valuable tools for business IT, and are a function of sophisticated business markets and globalisation. But, again, there is discernible in some of the developments we, and others, report on decreasing room for manoeuvre, and the necessity to be smarter.
Our feature on IT investment details some approaches that show how the right company with the right plan can still get funding for IT projects despite the recession. An intensified focus on cash flow, a turn to hosted products, and an alertness to the incubation, in this recsssion, of the high-growth companies of the future are in play, according to our roundtable experts.
Running up against limits is not the same as hitting the buffers. But IT does need to get cuter at the edges of what is possible until the economic context changes, and then sustain that.

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I used to train UK IT graduates for numerous Blue Chip clients. I haven't trained any since 2000. I have, however, been regularly asked to train ICT workers. It is fairly obvious the ICT Visa scheme has been massively abused to bring in low cost workers and displace domestic workers. I read somewhere that graduate unemployment in IT was higher than in Fine Arts. Doesn't seem to be much of a skills shortage that the big company's lobbyists bang on about.
If you remove the entry level jobs in an industry you pretty much cease to have an industry after a while.

Outsource your operations overseas if you must but accept the associated risks. Importing what is effectively indentured labour is ethically and morally wrong (and an abuse of the ICT visa rules as they currently stand - i.e an ICT visa is only supposed to be granted if the skill is unavaible in the EU - No such check is happpening hence 40000 - 60000 ICT visas currently in the UK).
I am an unemployed American High Tech. From my perspective,
there is an easy answer which would solve the OFFSHORING problem.

No hits to the unemployed American taxpayers.
No stock market crashes.
No foreign diplomatic issues.
No bailouts from the federal government vaults.
No bank runs.
No riots.
No bureaucracies.
See LINK to Information Technology Business Edge Magazine.

HOPE for solution of our national economic problem is in the READER’S COMMENT which follows. . .



Sign up to a petition to ban these ICT Visas here

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