October 19, 2011 /
What Should Get Cut Out of Technology Budgets?
There have been several recent articles and reports that offer ways to save Information Technology (IT) dollars. The lists of potential cuts are worth reviewing, but I urge some caution as well.
According to Computerworld, Gartner is urging IT managers to reexamine many common practices with an eye towards stopping ineffective or wasteful approaches. One conference in Florida urged “creative destruction” by killing spending or making radical changes to business as usual. For example, here are a few of the 16 items suggested:
- Stop recommending IT mega projects.
- Make people accountable for IT spending. Have business units acknowledge, with a signature, the ongoing cost of an IT service they need.
- Terminate applications that aren't delivering value. Gartner estimates that operating expenses can be reduced by 20% by 2014 by decommissioning applications.
- Abandon level 1, 2 and 3 tech support, where the more complex the problem the higher the skill level sought to address it until it reaches the people who built it.
- Cancel most IT chargeback systems, which take an extraordinary amount of effort and expense to charge back what is a small amount of revenue.
- Stop seeking competitive bids. Most companies keep their existing vendor.
While I like many of these suggestions, public sector organizations are committed to open, competitive contracts – so the last item must go. In addition, I’m not in agreement with the canceling of IT chargeback systems. (How would this really work?)
Nevertheless, I like many of the 16 items, such as stopping the mega-projects. Lists like these provide excellent food for thought. When government budgets get cut, new opportunities and new ways of thinking can emerge. Creative thinking is a must. Old paradigms and “turf battles” must be eliminated.
In addition, take a look at this blog which offers ways to save or redirect government dollars. One of the items includes a US Department of Interior Transformation Plan that will reportedly save $500 million.
1. Implement policies and actions that will increase collaboration and communication between the private sector and state and local government in all areas of technology acquisition, deployment and service delivery.
2. Innovation in government programs, in parallel with efforts to move to more cost-effective support functions, must now be considered management and fiscal policy imperatives.
3. Appoint a strong, visionary IT officer with authority to align technology assets, operations and services across the enterprise.
Whatever your approach, the current economic environment requires IT leaders to offer a list of cuts, or things they will stop doing, along with ways to implement new projects with a return on investment.
We can all take a hard look at ways to save. What approaches have you seen work in government?