November 17, 2008, 11:26 AM — With the global economy lurching toward recession , everyone is being asked to do more with less, and cutbacks and layoffs are weighing heavily on people's minds. But cutting costs in IT does not necessarily mean laying staffers off, deferring projects or reducing support. There are simple steps every company can take to significantly save money and improve the bottom line during these turbulent economic times.
You can start by maximizing your company's IT assets and resources. Do an inventory of hardware and software and determine what is underutilized or needlessly duplicated. Some applications and software might be able to share a server. You might find that you're licensing multiple versions of the same software and that it would be cheaper to upgrade to one version. Perhaps you're providing support for two kinds of very similar software, such as Unix and Linux operating systems; again, it would be less expensive to consolidate.
You may be surprised just how many IT resources are underutilized. I have consulted for several large corporations that were reflexively prepared to purchase new hardware to support a project when there was already more than enough capacity to satisfy the new needs. By making better use of the hardware they already owned, these companies saved big. I have seen similar savings when companies have eliminated similar but redundant software applications.
It is also important to maximize the abilities and talents of your staff to achieve more. Partner with human resources to make sure every person is in a job that suits his training and talent -- the right person for the right job. Don't just shuffle staffers around or reorganize as a matter of habit; make sure that you move each staff member into the job that he is best qualified to do. A worker who is in a job that best meets his talents will work harder, smarter and faster. This translates into cost savings and a happier, more productive staff.
Efficiency is another key ingredient in cost reduction. As a general rule, inefficiency leads to waste, which invariably increases operating costs. But many IT organizations neglect or overlook this important aspect of cost reduction.
Having worked at Toyota Motor , it is easy for me to understand why it is one of the most successful and respected automotive companies in the world. Toyota's success is due in large measure to its commitment to process efficiency and improvement, known as kaizen . One visit to a Toyota manufacturing facility is all one needs in order to see order and efficiency in action.
Look for ways to streamline your IT processes and make efficiency a top priority in your IT organization. Draw up a complete IT project life-cycle process flow so you have a good understanding of the process from start to finish. Identify key stakeholders responsible for processes and decisions in the life cycle. Bring these people together and work as a group to identify and remedy inefficiency between process steps.
Whenever I have facilitated these types of process-improvement working sessions, I have been amazed at what the group is able to accomplish. Not only do the members of the team invariably collaborate in seeking greater efficiency, but the process of working together also provides a greater sense of awareness among process owners. By utilizing the collective knowledge and will of the group, process efficiency follows, and teamwork is fostered.
Today, more than ever, companies are seeking creative ways to reduce costs and maximize profits. Laying people off should be a last resort in solving the problem. There are plenty of opportunities to save money beyond even those that I have mentioned. Rather than viewing the current economic condition as a crisis, think about it as an opportunity to eliminate waste, maximize resources, create greater efficiency and work together.
