Economic climate ups ante for IT cost management

By David Almquist and Lane F. Cooper
BizTechReports.com

It has become a familiar lament. “Our IT organisation is under more pressure to deliver more value without increases in budget.” Well, in today’s economic environment of fear, uncertainty and doubt, the IT cost management problem has become even more acute. Even before the latest events on Wall Street, Forrester Research reported that more than 40 percent of over 900 executives in large European and North American businesses have cut their IT budgets in 2008.

But demands on IT are not tapering off to accommodate the reduction in resources. Indeed, as organisations respond to transformative shifts in the global economy, CEOs are looking for the IT department to contribute to innovation initiatives that will improve competitiveness, streamline operations and strengthen the corporate balance sheet.

Since budgets are not rising, that means that “innovation initiatives” will have to be funded by cost reductions in the day-to-day management of “core” operations.

So what are IT managers to do? According to Matthew Holitza, an engineer at IBM’s Rational software division, should develop a new mindset toward cost control that revolves around:

Each of these concepts affects the others, and when they are viewed in an integrated context they offer an opportunity to reduce IT costs significantly while actually improving service delivery to the enterprise.

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