Healthy IT in a Faltering Economy: Focus on Efficiencies & Talent Management
As economic turmoil spawns shrinking budgets and headcount, IT organizations must look inward, focusing on efficiencies and talent management, to stay healthy and emerge strong.
Tough economic times force us to look deeper to find ways to do more with less. Faced with shrinking budgets and headcount, IT leadership is now being challenged to dramatically reduce costs while preserving operational continuity and fueling business growth. Focusing on efficiencies and developing a proactive/preemptive talent management strategy will help your IT organization remain healthy and keep your business competitive in the face of this crisis.
Healthy habits will benefit your IT organization during both the good times and bad. This article discusses a few basic principles to help your department stay in shape through the recession and economic recovery.
1. Self-Examination
This year, it’s more important than ever to look internally for ways to cut costs, increase efficiencies and provide visible business value. It’s time to get back to the basics and carefully examine the fundamentals. You should persistently search for ways to apply best practices and improve your service management of events, incidents/resolution, change and configuration. If your core processes are more than a few years old, they need to be updated. Try to approach this self-exam not only from an infrastructure and process perspective, but also from a business-minded point-of-view.
Be proactive in evaluating your IT organization for cost savings. Telco and travel expenses are a great place to start. Are you bleeding money for things you’re not using, such as random or rarely used software licenses, extraneous domains and sites, voicemail boxes for terminated employees, etc? Take a hard look at your phone and utility bills?you may be surprised at what you uncover. If you feel overwhelmed, reach out to your accounting department for additional insight and help with connecting all the dots. They hold a wealth of untapped knowledge that may be useful to you.
If you are planning any hardware or software upgrades this year, you may want to consider postponing them unless they’re absolutely essential. Do you have projects that are underperforming that should be canceled or postponed? Have you rationalized your applications, renegotiated with your vendors and examined your infrastructure and energy costs? Does the mere thought of all this extra work make you exhausted?
2. Get a Second Opinion (From a Specialist)
To make sure you’re getting the most value from your IT money, you may need to seek a second opinion. Sure, you probably have the expertise to optimize and drive efficiencies within your own organization by yourself. But with all the other challenges you currently face, do you honestly have the time, resources or objectivity necessary for the proper due diligence? Probably not.
Hiring a reputable consulting firm to conduct a thorough assessment of your IT operations and structure is a great way to get objective results that you can use?fast. IT assessments generally yield a report of their findings and recommendations, both short- and long-term, including “quick win” opportunities which can help you demonstrate immediate business value to your CEO and CFO. The assessment results should identify areas of potential cost savings and process improvements. You’ll also see how your organization fares when benchmarked against your competitors and industry norms. If you bring in the right team of experts, this process should prove to be quite cost-effective and worth every penny.
3. Considering surgery? Weigh the risks before cutting into your workforce
Labor costs are high, which is exactly why companies often look to cut headcount first when times get tough. If your organization has not already downsized, it may be right around the corner. Do you have a game plan? Without the proper strategic consideration, you may lose quality resources along with the ability to support your systems and initiatives when the economy turns around.
Planning ahead is crucial. Don’t go into a labor freeze or layoffs reactively without carefully considering all other options. It is wise to remember that people are the heart of your business. Before you make any cuts that affect the “heart”, be sure to carefully consider all the risks involved and account for a recovery period. Don’t underestimate how morale can affect worker productivity. If you’re unfamiliar with this concept, just ask a colleague who has been on wrong side of an integration effort.
Be bold in rethinking your talent strategy. Many progressive companies are implementing a variety of cost-reduction strategies to circumvent layoffs including: compressed work weeks, furloughs, schedule changes, offering unpaid vacation days, pay cuts and changes in employment status. Most employees are willing to make compromises to avoid losing their jobs.
Evaluate your employees. Know who’s performing and who’s not. Use this time to preserve and grow your talent base, not slash it. Top performing IT professionals are still very much in demand, so make efforts to retain your most valuable players. The stage is also set to attract new talent. Has your competitor lost any key employees to downsizing? Their loss could be your gain.
4. Conclusion:
Although the recession may present daunting challenges to your IT organization, you can survive and even thrive if you remain focused on efficiencies and driving business value. As budgets shrink, headcount typically follows. So, a proactive and preemptive talent strategy is vital to avoid losing valuable resources to downsizing. Applying these basic principles will provide the foundation for your IT organization to emerge stronger than ever when the economy recovers.
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