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How to use budget cuts to get a leaner IT system

We look at how economising will continue through 2011

Meticulous budgeting and economising technologies have helped sculpt trim new IT outfits. Here's how IT will maintain its slimmer shape in 2011.

Austerity yields new appreciation for IT

Next year's technology budgets are mostly flat, and cutting costs remains a top priority, but it's not all gloom and doom for IT.

In Chan's case, his most experienced staffers are retiring at an alarming rate and taking years of institutional knowledge with them. In an effort to mitigate those losses, the agency is re-engineering and automating as many of its processes as possible; it's also using dashboards to better monitor expenditures and manage approval processes in a timely manner. Nonetheless, it's still looking to fill 50 jobs in the next few months.

"Our strategy is to bring in new talent from the outside, with the hope that they will look at things differently as to how we can improve our processes," says Chan. He adds that the move to automation has yielded a big unexpected benefit: "IT is a lot more joined at the hip with really high-level executive management within the government because they're seeing more and more the value that technology can bring to the table."

Other CIOs tell similar stories.

At GAF Materials' Noble says IT received a slight budget increase for 2011, thanks in large part to the ROI generated by investments in new IT systems during the previous two years, most notably a unified communications system for the customer service call center. The system enables customers to place orders via the Internet instead of doing so over the phone. GAF has since launched a pilot to see if chat can be incorporated into the process.

Phone orders now represent the smallest percentage of overall orders. "It has completely flipped from two years ago, when 80 percent of our orders were taken by phone," Noble says. "We still have customer service people, but now we can use those people for other things, like up-selling." The call center has also reduced costs by 10 percent. After presenting those results to the company's board, Noble says, "we talked about where IT can make additional investments, and we got a slight uptick of five percent in the budget."

PHI's Quinn is helping to research and negotiate business matters far outside the realm of hardware, software and services.

"I just met with our CEO, and we were looking at a technology company in the roofing industry that has nothing to do with standard IT," Quinn says. "Because I'm heavily involved in negotiations and I understand how technology can impact the business, I was called in." As he sees it, "IT is almost becoming an extension of the research and devlopment organisation. Everyone talks about innovation and they look at my organisation."

IT is also in charge of a companywide cost reduction program at PHI. "The initiative is being run by IT, which was chosen to lead it because of our project management experience," Quinn says.

Going forward, "I think IT will continue to be a front-runner in helping companies survive," he says. "What's going on [in the economy] is actually elevating the importance of IT. There's a huge opportunity for IT to come to the forefront of a company and show its worth."

See also: 12 free downloads to beat the credit crunch

  1. Economising will continue through 2011
  2. Investments in some firms are at a standstill
  3. Push-button processes
  4. Running for cloud cover
  5. Austerity yields new appreciation for IT
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