Financial Insights, a research subsidiary of IDC, forecasts that top 10 american financial institutions will cut their IT budgets by 30%. Money is becoming dearer worldwide and investments harder to make. Europe which need big restructuring, fears recession.
For IT managers, it is time to consolidation for being able to support unavoidable budget cuts.
What means consolidation ?
1/ Operations optimisation
– Improvement of IT operations itself may help to gain productivity.
Usually it is done with setting lower resource which force remaining people to find a better way of working.
This solution uses to add stress to organisation which may result in downgrading service level for a while, time new organisation find a new way of working.
It is better accepted when productivity and quality improvements are usually done, for example by the way of
a kind of kaizen process. People always fears that it may lead to lowering resource. In an investment context, freed resources may slip on projects, in other times lowering subcontractors allow adjustment.
This show the interested to have subcontractors, and to manage them not in the same way than internal people.
– Improvement of service level
Since it may results in business operation improvements with more productivity and less costs, it is time to propose this kind of projects. You export a little bit your lowering resource trend.
– Improvement of business operations
For this project, you need business unit support. But, it means work for IT in the purpose of less work in Business. It should be worth, I mean a little bit more work for you and significantly less work for Business.
– Simplify systems
Symplifying systems helps to optimise production and administration, but it also provides better security since, by the way, IT division improves his control on these systems. Drawbacks lie in project costs, but security is a good driver for CEO.
– Simplify organisation
Symplifying organisations improve reactivity and decision making process. It is a key success factor for service level improvement, good project management, … It may lower meeting number and freed managers for better management. Drawbacks are when some people feels to have lost responsibility.
3/ Review business case of projects
In such context you should be confident in projects ROI which support projects budget and delivery timetable, otherwise you will undergo budget cuts and delivery slipping.
Anyway, the investment amount being shrunk, not strategic projects are likely to be postponed, the remained ones will have the strongest ROI. For strategic projects, review may decide, according to ROI confidence, new deliery time to smooth investment.
In such harsh time, Keeping team confidence and motivation at high level, is top priority for the CIO.