Half of what you have

Most managers have lived through cutbacks, especially when the economy turns down.

We’re asked to give up 5% … 10% … maybe, in a really bad year, 20%.

What if you were told “half” — give up half of all your spending. “And still get the job done.”

What would you do? Where would you turn?

You’ll need a portfolio of moves to take a cut that large. No one action is likely to generate that much free cash.

You’ll stop all the “looking like we’re moving forward” work immediately, of course: on half the resources you either move aggressively to completion, or you do nothing.

You’ll stop all the “petty” projects, too. There’ll have to be a real reason to do something going forward, not just the usual “every area gets something, no matter how small” thinking of the past.

You’ll accelerate projects that lead to cost savings, because you want to capture those savings sooner rather than later. Three projects with an ROI from actual cash flow savings in the 5-10% range that can be done fast will be worth their weight in gold; a two year project with the promise of 20% if everything works out is a high risk venture.

You’ll start getting very serious with your vendors. No more “we’ve always done business with…”, or “I’m sure that’s the best deal…” — you’ll want to know. The vendor who comes in promising a great price on something you need if you only sign up to also take this other thing you don’t care about will be told, in no uncertain terms, that extras are off the table. Maintenance fees for little-used products will probably turn into licence removals.

You’ll acquire a keener sense of risk, suddenly realizing that it can’t be removed, but only moved around, or kept an eye on.

You’ll realize fast enough that you can’t micro-control everything, and that your processes had better get stripped back to their essentials.

You’ll start to understand how important generalists are: they can cover three or four areas. Twenty-five years of “experience in one area”, on the other hand, might not be so valuable in a crisis.

You’ll be looking to sweat money out of infrastructure, application maintenance, any supporting function. Architects will either produce — fast — or it’ll become a luxury item, to take one example.

At the same time, if you’re smart, you’ll be investing (which means you’ll cut deeper than half to free up monies to make changes). Jumping from an old release of a key package to the most current one probably means no more code modifications, for any reason. Then you can decide whether the new version should be implemented -as-a-service, or onsite. Either way, by getting to “current”, you probably get supplier help to augment your resources (they’re desperate, too, if there’s a broad-based retrenchment going on). So investing to remove mods pays off.

You’ll probably take a good hard look at TCOO (total cost to own and operate) and figure out what minimum number of platforms gives you the best bang for your buck — and get there from here.

You’ll almost surely get more disciplined about achieving AROIO (actual return on investment obtained). Effort will go into better idea refinement (knock it about on paper before it becomes a project to have a pool of good ideas ready to go), better projects (once released, drive to completion), better deployment (make sure the benefits are obtained), and follow-up to know whether the benefits are falling off.

Your people will be expected to seize the day. You’ll stop worrying about nits, and care only for results that make a difference. Much more organizational flexibility will come in.

Okay … so why aren’t you doing these things now?

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About passionateobserver

I am a passionate observer of our society, the economy, and politics. Mostly I don't like much of what I see, so I write as a concerned citizen. To the fray, I bring a background in the philosophy of history, a lifetime's reading, a work history in information technology management, consulting and education.
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7 Responses to Half of what you have

  1. John DiMarco says:

    These of course are all good first-order ideas for saving money, but what they represent is simply a careful look at operations with an eye to eliminating non-essentials. If the cut is large enough, this won’t be nearly enough. New ways of operating are needed. Here’s one approach:

    Make your staff complement consist as much as possible of a small team of highly flexible self-motivated and committed people who do everything (and have them cross-train each other so they can do each others’ jobs). Make them partners with you in solving problems and making decisions. Yes, that means explain and persuade rather than dictate, listen carefully, and be wiling to let what you hear affect what you decide. If you do this right, your staff will stay. Avoid as much as possible staff who have to “be trained”: you need staff that learn and adapt on their own initiative.

    Drop all vendors outright except those absolutely needed, and of those vendors you keep, go as far down-market as you can (e.g. replace Cisco with Netgear), and use open-source software whenever you can. Rely on your highly flexible IT team to make it work. Take all inexpensive steps to ameliorate risk.

    Replace maintenance contracts with your own on-site sparing, and use commodity hardware everywhere, standardizing on a few key pieces out of which you build everything (like lego). Test prospective commodity hardware pieces yourself before adopting it for use: not everything works as advertised. When you find something that does work, buy as much of it as you can. Have a failure response plan in place for every key piece of gear, including knowing where the spare is, and where the spare for the spare is.

    Okay… so am I doing these things now? Yes, I am. It can be scary, but it works.

    • Hi, John, nice to see you here, and thanks for the confirmation that this can be done.

      Do you have developers (solutions) types also? Most of the opportunities I see there are never picked up, leaving it to the Infrastructure types to do the heavy lifting.

  2. John DiMarco says:

    I’m not sure I understand your question correctly, but if you are asking whether the tasks done by my team of generalists include application development, the answer is yes. But a limit is imposed on the amount of time a generalist can spend on application development: if that’s not enough, we hire a contract programmer, supervised by the generalist.

    • It was and that amplifies your first answer nicely. Thank you!

      I have seen shops with literally hundreds of people doing makework because they have a model of maintaining permanent development teams, whether there are approved projects or not.

      • John DiMarco says:

        I wish they could somehow lend them to me. I’d find development work for them in a heartbeat.

      • If they were smart, they’d be renting their staff out — but of course large organisations seldom think that way…

  3. Pingback: “Good enough” is good enough « Getting Value from IT

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