During this recession, some companies are taking the position of cutting all costs and waiting for the economy to improve. The “hack and slash” philosophy of budget control, while this might improve the balance sheet in the short-term, it cannot position a company for growth when the economy recovers. IT has always been seen as a cost center, and therefore the first to be targeted for cuts. At times, this is the group to make the most sacrifices. But this is throwing the baby out with the bath water.
CIOs should identify and target inefficiencies and find ways to lower their cost base. After making adjustments, CIOs should examine what they need to do to position their department to emerge stronger.
Good CIOs should ask themselves the following:
- How can I streamline complex IT infrastructures that has been allowed to build up over the years?
- How can I reduce excess capacity?
- How I can save on vendor contracts and software licenses?
- How can I mitigate risks?
- How can I improve the customer experience?
- How can I leverage technology to be more efficient?
- How can I extend the life of a system?
CIOs need to take a more active approach to financial decision-making. This is the time to challenge your staff to take the initiative and come up with creative solutions to reduce costs. As CIO, you need to remember to maintain a healthy balance between staying on strategy and managing financial performance.