Despite the economic upturn and industry pundits' predictions that IT spending will increase in 2004, IT budgets and proposed projects will continue to come under scrutiny, and IT executives will be pressured to reduce costs. Doing more with less has been the IT mantra for several years, a situation that will continue into at least 2005. However, IT projects that were postponed for several years but are proven to deliver business value are bubbling to the surface. IT executives will therefore be faced with the paradox of reducing costs while funding new initiatives.

RFG Recommends: IT executives should take a "velvet sledge hammer" approach to consolidating systems, cross-training staff, and improving and streamlining processes to take unnecessary costs out of the IT equation. However, IT executives should proceed with caution, as reengineering IT can be more a cultural, diplomatic, and political exercise than strictly a business exercise. Moreover, IT executives should understand that re-engineering IT could be a multi-year effort.

RFG has published extensive research focused on transforming IT from a cost to value center, IT's roles in enabling greater IT-business alignment, and reengineering IT. RFG regularly works with clients on IT-business alignment, management, staffing and transformation issues. Contact RFG for more information.

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