March 16, 2009, 3:55 PM — Tough times call for tough measures. Layoffs and cutbacks are rampant. Even if your IT budget is relatively stable, you will probably be asked to do more with less.
But perhaps a better solution would be to do less with less -- to scale back on over-allocated services, curtail unnecessary capital expenditures, and clean house of legacy apps and orphaned software. This may be your opportunity to show the organization how it can save money using open source software, virtualization, cloud computing, or SaaS.
[ For more advice on how to keep your IT project afloat, see " Six ways to save your IT project from the scrap heap." ]
Pushed to the brink, top brass may prove more receptive to ideas you've been itching to implement for a long time. In short, this is when IT can show its true value.
"I think this is the year IT steps up to the plate and shows how we can make the business more efficient," says Patti Dock, COO for DataMotion, provider of data governance services. "Someone has to do it. I think IT professionals can become evangelists for efficiency in the organization."
With great change comes great opportunity. Here are 16 ways you can achieve the same or better results by doing less -- and keep your staff sane and intact in the process.
1. Lay it out in black and white The first step toward doing less is to figure out IT's real load. In other words, take account of all the resources required to keep the lights running, as well as those development projects on the back burner.
This is harder than it sounds, says Jim Smith, CEO of Enterprise Management Group, which for years specialized in troubleshooting struggling IT departments.
As a services firm, Smith's group would take over IT operations inside large organizations and make each manager account for each hour of every employee's time for the next year. Then Smith would present the results to management. The project list always exceeded the number of bodies necessary to complete the work. The officers would then be forced to have an open dialog about which projects to fund and which ones to cut.
Smith says his group routinely managed to cut 10 to 20 percent of each organization's IT budget in less than three months.
"We eliminated the mystery that IT is some amorphous thing they can't understand," says Smith. "This stuff isn't smoke, mirrors, and magic. It's labor, like any other department. And once the business side understands IT, they can't second-guess it any more because they're the ones making the decisions."
2. Focus on short-term wins For years, IT managers have been taught to think strategically and plan for the long term. But for many organizations, the future is now, says Joe Wolke, director of IT strategy at Forsythe Solutions Group.
"A project with a significant return that won't be realized for three to five years does not make sense if a CIO is charged with reducing costs this year," he says.
If you're working on a complex project that spans multiple years, break it into pieces, find the parts with the biggest immediate payoffs, and implement those first, says Wolke. The world changes too quickly to bet on a long-term return that may never be realized.
"You've got to be realistic," he says. "There's a danger that you could be suboptimizing for the long term, but if you're concerned that your company might not be here for the long term, it makes sense to make that choice."
3. Slay your SLAs When dealing with tech requests from the business side, many CIOs just can't say no. The result: internal maintenance and service agreements that go well beyond what's necessary to keep the business running.
"We find a lot of companies spending money on maintenance that doesn't align with their expectations," says Wolke. "If you ask the customer what level of service they want, they always say '24/7.' You have to sit down with them and ask, 'If this system goes down at 2 a.m. on a Sunday, do you really need someone to come out and fix it, or can it wait until 7 a.m. on Monday?'"
John Baschab, managing director of Technisource Management Services, recommends IT managers meet with business stakeholders armed with an a la carte menu of service offerings, backed up by the costs and usage stats for each.
"You want to go in and say something like, 'Our recommendation is we get rid of weekend and deep night support because we're spending a lot of money and we're only fielding four calls per hour,'" he adds. "If you give them the opportunity to pick and choose, you're much more likely to have a successful conversation."
Wolke says rationalizing internal service expectations can also reduce wear and tear on IT staff: "If you're asking people to be covering systems 24/7 or carrying pagers everywhere, you're going to burn out your IT operations staff."
4. Max out your storage Even though your company's data needs are growing, odds are you probably don't have to invest in more storage now, especially when the ROI is years away.
Richard Clark, CEO of storage software maker APTARE, notes that most enterprises use only 30 to 45 percent of the storage they've already allocated -- leaving significant amounts of what Clark calls "hidden pockets" of unclaimed storage.
"Smart companies will get very analytical in understanding how much storage they actually have available," he says. "Given the enormous investments organizations make in storage, visibility into just how much is really being used -- versus just allocated -- can make a significant difference in cost outlays."
The second half of the equation is clearing out the deadwood, says Sunny Gupta, CEO of Apptio, provider of IT cost optimization solutions.
"Everybody knows this, but it is politically hard to do anything about it," he says. "You need to get people to go through all their network storage or application storage and trash or archive items that are no longer needed. Storage is expensive -- $7 to $12 per gigabyte managed -- and growing at 30 to 50 percent per year. Gaining back a few gigabytes per employee could be a savings of $200,000 or more, depending on the size of your organization."
5. Go open source The benefits of going open source are well known, as are the risks. The good news is open source software has come a long way toward being enterprise-ready, says Amit Pandey, CEO of Terracotta, makers of an open source clustering product for Java apps.
[ For the best in open source software, check out InfoWorld's BOSSIE award winners. " ]
"There are very good open source alternatives to the monolithic JEE application servers like Weblogic," says Pandey. "Lightweight components like Spring, Jetty, and Tomcat not only save upfront costs but can save significant development effort. Similarly, open source databases such as MySQL, when complemented by high-performance in-memory data management solutions, can replace expensive databases, saving a considerable amount in license fees and ongoing support costs."
For example, when commercial construction firm Balfour Beatty needed to integrate its JD Edwards EnterpriseOne and AutoDesk Constructware apps into a new ERP system, it turned to an open source integration solution called Jitterbit.
"Jitterbit's solution provided the same robust architecture as its competitors, at a much lower total cost of ownership," said Kasey Bevans, CIO of Balfour Beatty Construction. "In addition to ERP integration, our IT team was able to use Jitterbit out of the box with limited training to automate the process of banking transactions."
Whether open source software is right for your organization depends on several factors, including your compliance and security requirements and how broadly the app is supported, says J Schwan, a managing partner at Solstice Consulting.
"The one you can usually hang your hat on is the size and activity of the community supporting an open source app," says Schwan. "How active are the discussion and support forums? How quickly do new releases or new features appear? The more involvement the open source community has, the safer the investment."
6. Consider refurbished hardware Capital budgets are tighter than ever, so that total overhaul of your datacenter may have to wait. But you can still boost capacity on a budget by going with refurbished or used equipment.
"Refreshing servers and networks is a major time commitment, not to mention expensive -- so more and more IT managers are choosing to max out what they have, rather than go through a complete upgrade," says Corey Donovan, VP at Vibrant Technologies, a worldwide reseller of used networking hardware. "The demand for parts such as memory, drives, and CPUs has greatly outpaced RFQs for complete systems. Our clients are maxing out their installed base and saving 50 percent or more by buying those parts on the used market."
If refurbishing your aging systems isn't an option, you may be able to stretch your IT dollars by picking up the tech assets of failed businesses, says Technisource's Baschab. Log onto the Federal PACER database to find local companies that have filed for Chapter 7, and contact the trustees and liquidators.
"Liquidators are motivated to sell, and the market for these goods is not very efficient or competitive," says Baschab. "You can exploit this situation to find some really good deals."
7. Get virtual -- but pick your spots Virtualizing even part of your datacenter can save you money on rack space, power and cooling, maintenance, and disaster recovery, as well as give you more flexibility, says Forsythe Solutions' Wolke. But not everything should be virtualized, he warns.
"Virtualizing assets that are not at end of book life, or whose life is being extended to avoid capital expenses, will not cut your hardware costs," says Wolke. Servers that are nearing the end of their lifecycles are the best candidates for virtualization.
[ For a deeper look at virtualization, peruse InfoWorld's Virtualization Topic Center. ]
But don't expect a quick budget fix from going virtual, warns Apptio's Gupta. "Trying to adopt a virtual environment isn't the easiest thing," he says. "You have to invest more up front, and the return happens over a longer period of time. You may end up spending more for the first two years dealing with people and server issues, software licenses, and managing the environment. When employed as a medium- to long-term strategy, though, it is saving our customers money."
8. Clean out cobwebbed apps The good news? Tight budgets are an opportunity to get rid of redundant or legacy apps that users still cling to but you can't afford to support anymore, notes Apptio's Gupta.
Gupta's first piece of advice for cost-cutting IT managers is to "find no longer used or rarely used applications that are still taking up infrastructure, support staff, license fees, and administrative fees. Turn them off, recoup the licensing costs, and take that out of the budget."
"One place IT has always struggled has been in application rationalization," adds Forsythe Solutions' Wolke. "How many different payroll or CRM systems do you have? In reality, very little gets turned off. But economic environments like this one often push business leaders to put their foot down and say, 'We don't care if you do like this application, it's going away.' It's really an opportunity to retire expensive hardware, free up real estate in your datacenter, and not have to keep certain skill sets in house anymore."
9. Revoke unused licenses Now is the time to weed out the applications you're paying for but no one is really using, says Rathin Sinha, CMO of NaviSite, a hosting and application management provider.
"Do you have a newsletter generation system, but a newsletter hasn't gone out in six months?" he says. "Cancel the subscription. Have you bought 50 licenses of a software app but only 10 are being used? Cut back."
10. Join the cloud crowd Cloud computing can provide the benefits of a fully powered datacenter at a fraction of the cost. But like virtualization, it may not the best call for every application or enterprises with heavy compliance or security requirements.
"I think there are very real opportunities to save money leveraging the cloud, but it's not a black-and-white argument," says Gupta. "If you're a financial services company or one of the Fortune 100, you'll need to take a hard look at the data security, reliability, and availability of the cloud."
If you do decide to move into the cloud, start with underutilized, high-cost IT environments, suggests Ian Knox, director of product management for Skytap, a provider of cloud-based virtual labs. "Dynamic environments like application development and testing are ideal candidates to migrate to the cloud, as capacity and expense easily scale up and down based on demand."
Solstice Consulting's Schwan says his firm uses cloud computing to mirror clients' environments for software testing at a fraction of the cost of traditional solutions.
''In the past we had to acquire servers and install the clients' software on them," he says. "Now, I can spin up a virtual server from GoDaddy for less than $40 a month, or pay less than a dollar an hour for a full Microsoft SQL Server on Amazon's EC2. That's huge. The ability to do that and pay only for the time you need it is definitely something people can take advantage of right away.
"Do I expect Citigroup or Starbucks to throw away their enterprise infrastructure and move into the cloud over the next two or three years? Probably not," Schwan adds. "But I do think large organizations will start making investments in the cloud via their test environments."
11. Cover your SaaS As with cloud computing, using software as a service to replace enterprise apps can help you reduce your fixed costs, giving you more flexibility when budgets are squeezed.
But SaaS is usually a better call for smaller organizations that haven't already made significant infrastructure investments in apps like those being delivered by SaaS providers, says Apptio's Gupta.
"If you're looking at a new category of app where you don't already have the people or the expertise, why would you want to build an internal organization with a fixed cost structure when you can keep it variable?" he asks. "It's much easier to scale down using SaaS."
But some SaaS applications -- such as CRM and sales force automation -- are more mature than others, notes Schwan. He advises IT managers start with SaaS apps that integrate well with what the organization is already using so that they can get comfortable with the environment.
12. Slash your development cycles Rapid software development methodologies such as agile can get you faster results with less cost and effort, says Ryan Martens, CTO of Rally Software, an agile lifecycle management provider.
"By adopting agile software development approaches, companies have increased their collaboration and productivity, sped up their time to market, and better aligned with their overall business needs when compared with traditional waterfall projects," he says.
Agile eschews milestones and long-term planning for daily huddles with business stakeholders, focusing on producing a shippable product each month, if not sooner. A survey commissioned by Rally Software and conducted by QSM Associates found that teams using agile practices delivered software to market 37 percent faster with the same level of defects as more traditional development methods.
But rapid development has its drawbacks, particularly in heavily regulated industries, notes Technisource's Baschab. Whether to go agile depends on the risks involved and the compliance required.
"Agile works better for some companies than others," he notes. "You need to make sure you fulfill all your compliance requirements first. I wouldn't want NASA or a financial services company using it."
13. Curb your e-mail addiction Wring more productivity out of your staff by weaning them off e-mail. According to Osterman Research, the average office worker spends 847 hours a year -- or over 40 percent of a typical work year -- just managing e-mail.
The problem isn't merely that employees spend too much time using e-mail; it's that they use it for the wrong tasks, says Krishen Kota, president of AdminiTrack.com, which provides an online-based issue- and defect-tracking application.
"They have involved group discussions over e-mail, then try to track tasks via e-mail instead of using a centralized system," says Kota. "The result is a chain of increasingly muddled and unproductive e-mail exchanges -- what I call 'multidimensional ping-pong.' It's like a flock of ping-pong balls launched by numerous players bouncing off multiple surfaces at warp speed. Let the misunderstandings fly!"
A better idea, he says, is to use face-to-face meetings or conference calls to better manage everyone's time: "You can't always avoid unproductive communications, but putting some thought into the method of communication before you communicate can noticeably increase your productivity."
14. Reward employees with vendor freebies If you haven't already gone back to key vendors and negotiated better deals, now's certainly the time. Even if your vendors are maxed out, they may still have things they can offer you that don't cost them anything -- like extra training, invitations to events, or even spare consulting services, says Technisource's Baschab.
"If your vendor is already providing a training session for 10 people, it probably won't cost them much to add an 11th person," he says. "They may be sponsoring an event or convention and have extra passes they can share with you. You can pass these things onto your employees, who'll appreciate that you're still willing to invest in them even in tough times."
Meanwhile, your consulting firm may have experts sitting on the bench, working on internal projects while they wait for an assignment, he adds. Ask if you can tap into their expertise now, and make up for it later when you're more flush.
15. Give your staff a virtual raise If your firm isn't raising salaries this year, look for ways to trim what it costs employee to get to work every day. "Reducing employees' transactional costs has the effect of giving them a virtual raise," notes Baschab.
For example, casual dress days can cut down on employee dry cleaning bills, while each day telecommuting is one fewer day spent paying for gasoline and toll charges driving to work. Apps such as Cisco's TelePresence Meeting Solutions or even Skype 4.0 and a Web cam can bring work-at-home employees "into the room" when you need some face time, adds Baschab.
Besides making the planet a little greener, more telecommuting can also enhance productivity, adds DataMotion's Patti Dock.
"American workers spend an average of 47 hours per year commuting through rush hour traffic. This adds up to 3.7 billion hours and 23 billion gallons of gas wasted in traffic each year," Dock notes, citing statistics from Planet Green. "Businesses need to get ahead of the curve and implement efficient technologies that empower their employees to work remotely, securely, and more cost effectively."
16. Buy bagels IT staff is used to having bosses take them out to lunch or being sent to annual meetings, but thanks to budget cuts a lot of companies aren't doing that anymore. So IT mangers need to find simple ways to reward employees for their hard work in difficult times, says Baschab.
"I brought in bagels for some of my people the other day," he says. "It cost me $20. It's a cost-effective way to boost morale, and the staff really appreciated it."