Cost Cutting Strategy

One of the questions I routinely ask my clients, mostly infrastructure managers, is where they would cut their expenses if called upon by their management to reduce costs. I am never surprised and always disappointed at the answer. One well-meaning director responded that his people understood how to reduce costs and would know where to cut. No, with all due respect, they will not. First of all, none of the staff understood IT’s role in generating value for the organization. Secondly, without training, they would cut the most visible, easily identifiable costs. This almost always means headcount reductions. Third, the organization had inadequate and poorly defined processes and process metrics. Lacking the ability to measure brings us right back to the second point - headcount. Finally, none of his staff had the tools and training to make good decisions targeting efficiency. In this all too common example, the organization lacked a framework within which good financial decisions could be made.

IT will continue to be viewed as a cost center unless we empower our people with the tools, knowledge, resources, insight and support they need to make good financial decisions. (Published as "Readers Comment" in CIO Magazine article, "Trimming for Dollars" July 1, 2006).