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Monday, August 25. 2008

Topic: Managing Expenses

Resources: Littlejohn Shinder, Debra. “10 ways SMBs can cut costs (relatively painlessly) in a slow economy.” TechRepublic, http://techrepublic.com. July 31, 2009.

In tough times many organizations are looking for ways to optimize and/or cut operating expenses. Usually the most likely candidates are the areas with the biggest budgets, or in programs without strong internal support (e.g. Training and Development). In the big budget area IT usually is near the top for financial review, because of the size of its budget and the ability to scale back on projects. However, reductions in IT spending can also minimize the value of future applications, productivity, and efficiencies.

Monday, August 25. 2008 

Topic: Managing Expenses

Resources: Littlejohn Shinder, Debra. “10 ways SMBs can cut costs (relatively painlessly) in a slow economy.” TechRepublic, http://techrepublic.com. July 31, 2009.

In tough times many organizations are looking for ways to optimize and/or cut operating expenses. Usually the most likely candidates are the areas with the biggest budgets, or in programs without strong internal support (e.g. Training and Development). In the big budget area IT usually is near the top for financial review, because of the size of its budget and the ability to scale back on projects. However, reductions in IT spending can also minimize the value of future applications, productivity, and efficiencies. As a result, reducing IT expenditures requires financial, operational and strategic insight. This remains true whether or not the organization is large, small, public, or privately held. In the referenced article, the commentator addresses the IT cost reduction issue for SMBs and offers up some prime areas of focus. “Many of these changes don’t require a big sacrifice—and you might find yourself getting more while paying less.” The commentator’s suggestions include: (1) reducing land lines; (2) eliminating fax transmissions and moving to email attachments; (3) eliminating physical security costs by increasing technical solutions (e.g. IP based security cameras); (4) reducing mailings and moving toward paperless processing; (5) embracing telecommuting as an option; and (6) going green. These steps all make sense, but most organizations have already captured these advantages and I am not sure that significant costs can be saved by many organizations from these specific steps. To me a stronger list might include: (a) renegotiating service agreements to obtain better price terms; (b) holding back on staff hiring; (c) changing maintenance schedules; and (d) reducing project lists to those strategically aligned with near term business objectives. Under (d) focusing on the highest strategically sensitive and return on capital projects is more likely to produce the best near term value and cost justification. One that I like is represented by enhanced business intelligence from data mining and extraction tools. Others may include optimizing software licenses and rationalizing equipment upgrades. There are may be others as well, and I am interested in hearing your thoughts on this subject area as well.