With every day bringing increasing concern for the health of some of the world's largest economies, IT deprtments can expect mandates from senior executives to cut IT costs as part of an enterprise cost-cutting program. Therefore, we offer this advice on how to cut IT costs.

Step 1: Don't Wait for the Cost-Cutting Mandate from Management
Owing to the uncertainty and profound time lag connected with the start and end dates of a recession, if you haven't already, we recommend preparing a cost-cutting team now.

Step 2: Choose the Best and Brightest IT People for the Team
Assign top performers to lead IT cost-cutting programs, and remove all other duties from their day-to-day tasks for the duration of the cost-cutting assignment.

Step 3: Don't Allow Finger-Pointing or Second-Guessing
Assume everything that was done in the past was the right thing to do at that time. Identify the target for cost cutting, perform the appropriate action, and move on.

Step 4: Enlist an Internal Auditor as Scorekeeper
Have the accounting department assign a senior accountant or auditor to ensure that any savings identified by the IT cost-cutting team not only leave the IT budget, but actually leave the expense pool of the entire enterprise. Also, rely on the auditor's list of savings as the official record of the IT cost-cutting team's performance.

Step 5: Report Results on a Weekly Basis
Just as a public company races toward meeting its respective quarterly earnings expectations, during tough economic times the IT cost-cutting team should provide a weekly report that depicts savings achieved since the last weekly report (to show the degree of effort and progress each week), along with aggregate, year-to-date savings.

Step 6: Identify a Liaison from the Legal Department
Request that the general counsel assign the attorney to the IT cost-cutting team who is most familiar with all prevailing IT contractual obligations. Make it clear that all team members will need reasonably immediate access to the attorney, so that they can quickly arrive at cost-cutting solutions without increasing the liability of the company.

This excerpt is from the Gartner Research report “Cost Cutting in IT” by Ken McGee, Mark Raskino and Jorge Lopez, available from Gartner Insight.

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