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1/30/2009
10:13 AM
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Crisis Survival Kit: Cost Control Step 1 To Successful IT

As the soaring layoff numbers demonstrate, every business is looking for ways to cut costs right now and IT is an obvious place to cut. Before slashing IT staff or eliminating services, be sure you've done wrung every dime from your budget. Start with these steps.

As the soaring layoff numbers demonstrate, every business is looking for ways to cut costs right now and IT is an obvious place to cut. Before slashing IT staff or eliminating services, be sure you've done wrung every dime from your budget. Start with these steps.Peter Birley, who writes the CIO Blog and is IT director of law firm Browne Jacobson LLP, recently offered up 10 tips to successful IT and number one on his list is cost control. In larger companies, these steps may help preserve IT budgets and value relative to other departments and in smaller businesses, they can set the tone of evaluating other budgets lines. Regardless of how big or small, better, more efficient IT will help your business bottom line.

  1. Understood Your Costs And Take Control -- You can't achieve anything unless you understand your cost base so this has to be my number one. Once you have analyzed the costs and dealt with any discrepancies, it is important to keep them under control. A control system for authorizing purchases and controlling invoices may be needed. Also maintain reliable information on projected vs. actual costs and the benefits of any IT investments. Any linking of technology investments to business performance measurements is a bonus.
  2. Focus On The Customer -- Some people may say this should be number one. Don't just consider your own company requirements but those that reflect the needs of your customer, otherwise you can become internally focused and your vision restricted by the walls of the company. It can be challenging to see how improving IT might make your company's customers more successful. This may require a fundamental shift to become a more integral part of the company's operations in order to create real value for the ultimate customer.
  3. Create And Follow A Plan - You need to create a plan for your department so you have a direction. Strategic business and IT systems plans must be grounded in explicit high priority customer needs and must be aligned. Planning, budgeting and execution should be conducted in a seamless fashion with outputs of one process a direct input into another. Most importantly, make sure the strategic goals, objectives and direction are used to manage and evaluate the performance of the organization.
  4. Engage The Business - You need to obtain and maintain business buy-in and ongoing support. The business should have been working with you on the previous steps so there are no surprises. Make sure you get board approval, communicate directional changes/issues and keep the board informed. Find your supporters and nurture them. Position yourself as a senior manager to act as a bridge between top executives, line management and your IT professionals. Advise top managers on the worth of major technology decisions and investments. Promote productive relationships between users of technology and IT.
  5. Cultivate Partners And Suppliers - A good supplier strategy can deliver a win-win for both parties. Suppliers can be an asset and a major weapon in your armory. Treat them with respect. Choose partners that can deliver best in class products and services. Share the vision with them. Make sure they understand the challenges in your industry. Individuals within the suppliers are the real key to your success, so look to build relationships with those people.
  6. Manage And Measure IT - Focus on metrics that really drive the performance of the business. Apply best practice where possible. Manage resources and direct scarce resources to high value/high visibility projects. Support major cost reduction and service improvement efforts. Measure performance of key mission delivery processes and communicate them. Also it is often worth carrying out some benchmarks within your industry to see how you are comparing against your competitors.
  7. Be Project-Driven - Create a project portfolio and manage all IT projects as a program. Manage individual projects as investments, ensuring a sound business case as well as that benefits are identified and agreed and stakeholders are fully involved. Don't be afraid to cut your losses and if necessary have an exit strategy if a project is not going to work out. Don't forget to manage risk and when looking at implementation. Use change control techniques so there are no surprises for the recipients. Be benefits-driven and make sure they are realized. Consider managing large projects using EVM (earned value method). Ambitious and complex projects should be broken down into smaller deliverables.
  8. Think Team - A motivated, knowledgeable team is a great step to success. Operate as one team and include any key suppliers in that. Look at ways to motivate and reward the team but most of all engender trust and don't be afraid to delegate. You can always put some soft controls in to ensure things are kept within boundaries. Communicate so everybody knows what is happening and what is expected of them. You will be surprised how people react to being treated as responsible individuals.
  9. Train The Team - Ensure you have the right level of skills available to make things happen. Develop a skills matrix based on your functional needs and match your team's individual skill levels to the matrix. Use this to highlight deficiencies and determine your training program. Consider sending people on relevant conferences and industry group meetings so they are aware of the wider world. Developing your people will pay off.
  10. Shout About Your Success - Let other people in the company and industry know what you are doing. Create a communication plan. Make sure communication is regular and use every opportunity to talk about your achievements in terms of business benefit. Consider creating executive progress reports and using web 2.0 tools. Be prepared to give presentations to new starters and at departmental meetings. Look for opportunities to discuss successful implementations through writing case studies and magazine articles or speaking at conferences.

More From bMighty: Financial Crisis Survival Kit

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