IT typically accounts for only 6% of an organisation's spending, but many CIOs are being asked to cut a higher proportion of their spending than other parts of the business, says Kevin Stephens, a UK Partner.
"CIOs should reflect carefully upon cost reduction initiatives in the IT function to ensure that the actions are sustainable, managemeable with limited resources, executed quickly and successfully, and do not damage the core capability of IT for the future," he says.
Top ten questions to ask before cutting IT spending:
- Where should we look to reduce our costs?
- How do we know which costs are reasonable and which are not?
- How do we ensure that "fat and not muscle" is cut?
- How do we ensure that any measures taken to reduce costs will not adversely affect our strategic direction?
- What will produce the biggest "bang for the buck"?
- What are the associated risks and how do we manage them?
- How do we ensure benefits are realised as fully and quickly as possible
- How do we ensure that initiatives are properly managed to conclusion, and that we have the resource capacity to do the job?
- What do we do to ensure that issues and dependencies are effectively and appropriately dealt with?
- How do we manage the business changes that will result?
Source: The Birchman Group
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