Reduce you IT costs – part V

Categories: Careers, Featured
Written By: admin

Mrs or Mr CIO, its time to fire someone today – the delivery person. As part of our cutting costs for the remainder of 2008 and planning for 2009, immediately put a hold on all purchase orders and discussions for new projects.

This is only for new orders. If the project is already in flight, we will cover that later. But if the project has not started, put it on hold. If someone wants a news piece of software, a new application or a cool new combination pen and laser mouse for all 45 people in the graphics arts department, freeze it.

Freeze or kill?

Notice I said freeze it, not kill it. Have the application or project owners review the item and answer it back with a simple yes or no, that this cost cannot be deferred until 2009.

Let me spell that out because we don’t want to cause a panic in the troops, so here is the email for you to send out, feel free to use it as is or modify in any way.

Sample letter to the team

Team,

As part of our reviewing expenses and costs, I want to ensure that any new purchases are reviewed. Effective immediately, all new purchases will be going through a management peer review. I am asking that all new, IT related purchase orders for parts, supplies, software, hardware and outside services be held back and resubmitted as part of our 2009 budget.

Now, if you have a PO that has already gone through channels and has been placed, those will continue as normal. I of course am asking that if you can see an opportunity for us to delay receipt of those 1,000 units of whatever and only bring in 250 this year and the remainder next year, immediately get on the phone to procurement and see if

A that is possible and
B if it will safe us any money by doing so.

Do not contact the vendors directly, work through procurement.

For those purchase requests that have to be done this year, I need the Directors to meet with me and present justification for another approval. Nothing fancy, I don’t need a 30 minute PowerPoint presentation delivered by 20 people on the team. If it has already been approved, I just want the leadership to do a once over, see what you can save, cancel or defer. And for those that have to go through, be prepared to stand up at the next CIO meeting in front of me and your peers and tell us why this needs to happen in Q4. No slide shows, no handouts, just give us the quick information. And we will get the item green lighted.

Any questions, please let me know.

Thanks your friendly neighborhood CIO

Step by step guide to peer review of expenditures

Now, you will obviously want to modify that to be more succinct, fit your writing style, and not cause wide spread panic. But the process is simple:

Step 1. As of today, anything not in flight stops until review
Step2 . Communicate this to the team
Step 3. If it gets reviewed and is needed, then stand up at a peer meeting and tell us all why you have to have it in Q4.
Step 4. Anything else gets put on the back burner till Q1, 2009.

Having your managers personally speak up for a project puts the spotlight on them for the justification of the expenses. And lets your star players rise to the front of the crowd with great ideas, serious projects and worthwhile efforts.

What about projects already in progress?

Later on we will go over the steps to examine projects already in flight, but those can be a lot tougher and carry greater risks. For know lets focus on the stuff you can put a hold on with just a single call to the procurement department by stopping the issuance of Purchase Orders.

I am not the CIO, what do I do?

First, suggest it to the CIO or your management chain.
Second, cease all of your own efforts and have your team do the same level of review to you.
Third, offer to conduct these meetings with your peer managers for their team. Two heads and better than one. And your possible lack of all of the details and value of the project puts those requesting the funds on their toes to do a better job of justifying the funds.

Lastly, let everyone know that you did this, and show how much you have been able to save or defer until Q1 2009. If you safe the costs and no one knows, it doesn’t help your visibility within the IT leadership as a cost saver and forward thinking manager. Be sure you advertise your success with this effort.

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