IT Spending In Hard Times

Many firms are seeing hard times as certain sectors of the economy have been shrinking over the past few months. This is, of course, not a desirable condition. However, I would like to posit that a lot of good could come from the belt-tightening measures many an IT department will have to go through.

Actually, I should probably begin by stating that there is good belt-tightening and there is bad. Companies that engage in the latter my find themselves in an even worse crisis or, worse yet, may even go out of business.

As IT people, we usually have less control over how much of the company's budget is allocated to our department than how we will allocate the funds we do end up with.

Let's examine different key items on an IT budget and see how these can be kept up to par, if not improved during lean times.

Hardware
It is often assumed that if hardware is not the absolute latest (1) performance will suffer and (2) employee morale will go down. While we should not fall so far behind as to isolate the company technologically, hardware purchases should be justifiable in relation to the job requirement of the employee in question.

For example, studies have show that developers and designers improve their performance when using dual monitors such allocation for these types of workers is justified. However, executives and administrative assistants have no use for such extra spending so IT can save by simply letting them have a single, reasonably sized monitor.

By the same token, there might be other items, such as Blackberries and corporate cell phone accounts, that many developers really have no need for and just represent extra spending — exceptions must be made of course for product engineers who might need to be on call.

Software
This is indeed a great time to look into free tools and open source software. I am not advocating necessarily a wholesale conversion, just that areas of potential savings be identified.

Another, very important area to address is duplication. Many companies, for example, will spend money on site licenses for software they already have in another form. A good example which I have noticed at companies who've used my services is compression software. I have found it ridiculous that a company would spend money to deploy an operating system that has built in compression support and still spend money on a third party compression utility.

Projects
Most companies are good at killing projects that are deemed unprofitable or useless. However, many companies support parallel efforts at great expense.

Sometimes, it is just a matter of ignorance; at other times, it has to do with inter-departmental rivalry. Either way, it is wasteful for there to be duplicated development efforts within an enterprise. Any effort to curtail this kind of thing is worth the expense.

I would suggest a corporate version of SourceForge where all enterprise applications are catalogued and managers can search by keyword or description for applications that they need.

Division of Labor
There is a lot that can be said about this. I will try to be brief. Many companies, respond to crises by either laying-off developers and admins or by getting rid of contractors. While, there are good arguments to be made for either move in individual cases, as fixed policies both are horrendous ideas.

Let's first examine the basics. No matter how good times ever were, the number of full-time developers or network administrators should have been kept to a minimum. There are two reasons for this: (1) we do not want people who have so little to do they get bored and (2) software engineers are the kind of employee you want to have for a very long time as their value to the company increases exponentially as their seniority accrues.

Contractors should be hired to fill temporary gaps in personnel or to supplement the core team in large projects. The decision to hire contractors should always be based on potential saving and should be in no way connected to whether there is a lot of IT dollars to waste.

In other words, if you had to either cut contracts or lay off developers due to the recent economic downturn, you were probably doing something wrong all along,

Amenities
These tend to vary a lot and it's hard to tell a firm that they should remain constant. However, I believe that, if the amenities in question were properly analyzed or justified initially, they would be less likely to be subject to natural variations in the IT budget.

Another thing to be careful of is to mistake necessities for amenities. Office supplies, lights, proper seating and desk space are not amenities they are job requirements — ask OSHA.

Coffee machines, food concessions, free snacks, cable TV in the break room, gym memberships, etc, are actual amenities.

There is no easy way to dispense with freebies employees have grown accustomed to. This is why I always recommend that companies offer just a few choice amenities which they are likely to be able to maintain regardless of the vagaries of the economy.

Another tack would to have employees vote on what amenities they wish to keep and which they are willing to part with. This would help to keep morale high.

Efficiency
These tough economic times are the best encouragement any IT department can have to streamline its operations. If something can be achieved in less steps, reduce the number of steps.

Minimize requirements, simplify procedures, consolidate functions, look into virtualization if you haven't before, do not underestimate hardware recycling or reuse, try not to reinvent the wheel every time, cut costs wisely and where it is least felt or less likely to be seen.

This current crisis is not the first one we have faced and is not likely to be the last. It can be an opportunity to shape our organizations for a magnificent resurgence.