The cost-cutting blunders-often leads to an IT disaster and more expenditure on IT
Non-standardized infrastructure, optimistic expectations from solutions, lack of communication, neglecting security are common cost-cutting blunders
IT is given a limited budget to work in it but lowering the budget is a severe problem in this rapidly changing environment. The major responsibility of IT managers is to identify new technologies that need to be incorporated into the existing IT infrastructure for organizational improvement.
Many IT leaders start the cost-cutting operation without planning and strategy. It can sometimes harm the basic IT operations. It is important to carry out with a proper analysis of what to do, what not to do, with proper planning of its chain effect. Some of the common mistakes in this process are:
1. Non-Standardized IT Infrastructure
Emphasis on cost reduction often results in a non-standard IT infrastructure; by combining different software and services without effective planning. In most of these scenarios, the cost of integrating these software’s are high as compared to a well-planned infrastructure. This type of structure cannot last very long. As the organization grows, it needs a stable and secure infrastructure with proper standards.
2. Begin Optimistic About Solutions
IT managers often get too optimistic about incorporating new technologies into the infrastructure and hopes that the solutions will result in immediate cost-cutting. This solution will take a significant amount of time to show their effects on the budget. The solutions should be considered only due to problems in the existing system, not because of budget limitation.
3. Unilateral Decision
Cost-cutting in IT also affects other departments. This decision should not be single-headed but should involve all the concerned stakeholders; affected by this decision. It should be made with careful planning and should include an expert’s opinion. The IT manager needs to work closely with the finance team to determine the whole effect of cost-cutting.
4. Vendors Will Help In Saving
Negotiation; an important skill for an IT manager. Negotiation with the vendor doesn’t mean that IT would be able to cut the cost and gain more benefits. It is obvious that if the vendors offer something, they also want something in return. It depends on the organization, whether the organization prefers money over quality or vice versa. The vendors care about their relationship with the organization so it can worth a try.
5. Actions without Proper Planning
If the cost-cutting action is taken without proper planning and analysis of the dependencies of one software service to the other can lead to a greater loss. It can produce a short term benefit but can result in a disaster in the longer run. It can also result in spending more budget than the cost reduced. It can also make the organization fall into the trap of vendor lock-in, making the organization limited to only one vendor.
6. Neglecting Security
Security is the most important factor in IT infrastructure. Organizations spend a tremendous amount of budget on security and reducing it, can save a large amount of money but can expose the organization to serious threats. It should be the first priority of an IT manager. It shouldn’t be left to the last to implement instead it should be considered during the planning and development phases. The organization needs to build a strong security system with a generous but managed amount of budget. It should include using strong firewalls, different anti-malware tools, anti-virus software’s and monitoring systems to help protect the organization from any type of attack.
It is important for the CIO to realize that the budget is always limited. Launching a new project requires proper planning and management of the funds to make sure the important solutions are not affected and the newer project can also be continued, but the budget also needs to be flexible to transformation. CIOs should be aware of the minimum budget that is required for the IT department to continue its role to improve the IT infrastructure. It is essential for the IT manager to realize the impact of everything. The cost today can impact sustainable savings in the long term.