Tough times call for tough measures. Layoffs and cutbacks are rampant. Even if your IT budget is relatively stable, you will probably be asked to do more with less.
But perhaps a better solution would be to do less with less -- to scale back on overallocated services, curtail unnecessary capital expenditures, and clean house of legacy apps and orphaned software. This may be your opportunity to show the organization how it can save money using open-source software, virtualization, cloud computing or SaaS.
Pushed to the brink, top brass may prove more receptive to ideas you've been itching to implement for a long time. In short, this is when IT can show its true value.
"I think this is the year IT steps up to the plate and shows how we can make the business more efficient," says Patti Dock, chief operating officer at DataMotion, a provider of data governance services. "Someone has to do it. I think IT professionals can become evangelists for efficiency in the organization."
With great change comes great opportunity. Here are 16 ways you can achieve the same or better results by doing less -- and keep your staff sane and intact in the process.
1. Lay it out in black and white
The first step toward doing less is to figure out IT's real load. In other words, take account of all the resources required to keep the lights running, as well as those development projects on the back burner.
This is harder than it sounds, says Jim Smith, CEO of Enterprise Management Group, which for years specialized in troubleshooting struggling IT departments.
As a services firm, Smith's group would take over IT operations inside large organizations and make each manager account for each hour of every employee's time for the next year. Then Smith would present the results to management. The project list always exceeded the number of bodies necessary to complete the work. The officers would then be forced to have an open dialogue about which projects to fund and which ones to cut.
Smith says his group routinely managed to cut 10% to 20% of each organization's IT budget in less than three months.
"We eliminated the mystery that IT is some amorphous thing they can't understand," says Smith. "This stuff isn't smoke, mirrors and magic. It's labor, like any other department. And once the business side understands IT, they can't second-guess it anymore, because they're the ones making the decisions."
2. Focus on short-term wins
For years, IT managers have been taught to think strategically and plan for the long term. But for many organizations, the future is now, says Joe Wolke, director of IT strategy at Forsythe Solutions Group.
"A project with a significant return that won't be realized for three to five years does not make sense if a CIO is charged with reducing costs this year," he says.
If you're working on a complex project that spans multiple years, break it into pieces, find the parts with the biggest immediate payoffs, and implement those first, says Wolke. The world changes too quickly to bet on a long-term return that may never be realized.
"You've got to be realistic," he says. "There's a danger that you could be suboptimizing for the long term, but if you're concerned that your company might not be here for the long term, it makes sense to make that choice."
3. Slay your SLAs
When dealing with tech requests from the business side, many CIOs just can't say no. The result: internal maintenance and service agreements that go well beyond what's necessary to keep the business running.
"We find a lot of companies spending money on maintenance that doesn't align with their expectations," says Wolke. "If you ask the customer what level of service they want, they always say '24/7.' You have to sit down with them and ask, 'If this system goes down at 2 a.m. on a Sunday, do you really need someone to come out and fix it, or can it wait until 7 a.m. on Monday?' "
John Baschab, managing director of Technisource Management Services, recommends that IT managers meet with business stakeholders, armed with an a la carte menu of service offerings backed up by the costs and usage stats for each.
"You want to go in and say something like, 'Our recommendation is we get rid of weekend and deep night support because we're spending a lot of money and we're only fielding four calls per hour,'" he adds. "If you give them the opportunity to pick and choose, you're much more likely to have a successful conversation."
Wolke says rationalizing internal service expectations can also reduce wear and tear on IT staff: "If you're asking people to be covering systems 24/7 or carrying pagers everywhere, you're going to burn out your IT operations staff."
4. Max out your storage
Even though your company's data needs are growing, odds are you probably don't have to invest in more storage now, especially when the ROI is years away.
Richard Clark, CEO of storage software maker Aptare, notes that most enterprises use only 30% to 45% of the storage they've already allocated -- leaving significant amounts of what Clark calls "hidden pockets" of unclaimed storage.
"Smart companies will get very analytical in understanding how much storage they actually have available," he says. "Given the enormous investments organizations make in storage, visibility into just how much is really being used -- versus just allocated -- can make a significant difference in cost outlays."
The second half of the equation is clearing out the deadwood, says Sunny Gupta, CEO of Apptio, provider of IT cost optimization solutions.
"Everybody knows this, but it is politically hard to do anything about it," he says. "You need to get people to go through all their network storage or application storage and trash or archive items that are no longer needed. Storage is expensive -- $7 to $12 per gigabyte managed -- and growing at 30% to 50% per year. Gaining back a few gigabytes per employee could be a savings of $200,000 or more, depending on the size of your organization."
5. Go open source
The benefits of going open source are well known, as are the risks. The good news is open-source software has come a long way toward being enterprise-ready, says Amit Pandey, CEO of Terracotta, maker of an open-source clustering product for Java apps.
"There are very good open-source alternatives to the monolithic JEE application servers like Weblogic," says Pandey. "Lightweight components like Spring, Jetty and Tomcat not only save upfront costs but can save significant development effort. Similarly, open-source databases such as MySQL, when complemented by high-performance in-memory data management solutions, can replace expensive databases, saving a considerable amount in license fees and ongoing support costs."
For example, when commercial construction firm Balfour Beatty needed to integrate its JD Edwards EnterpriseOne and Autodesk Constructware apps into a new ERP system, it turned to an open-source integration product called Jitterbit.
"Jitterbit's solution provided the same robust architecture as its competitors, at a much lower total cost of ownership," said Kasey Bevans, CIO of Balfour Beatty Construction. "In addition to ERP integration, our IT team was able to use Jitterbit out of the box with limited training to automate the process of banking transactions."
Whether open-source software is right for your organization depends on several factors, including your compliance and security requirements and how broadly the app is supported, says J Schwan, a managing partner at Solstice Consulting.
"The one you can usually hang your hat on is the size and activity of the community supporting an open-source app," says Schwan. "How active are the discussion and support forums? How quickly do new releases or new features appear? The more involvement the open-source community has, the safer the investment."
6. Consider refurbished hardware
Capital budgets are tighter than ever, so that total overhaul of your data center may have to wait. But you can still boost capacity on a budget by going with refurbished or used equipment.
"Refreshing servers and networks is a major time commitment, not to mention expensive -- so more and more IT managers are choosing to max out what they have, rather than go through a complete upgrade," says Corey Donovan, vice president at Vibrant Technologies, a worldwide reseller of used networking hardware. "The demand for parts such as memory, drives and CPUs has greatly outpaced RFQs for complete systems. Our clients are maxing out their installed base and saving 50% or more by buying those parts on the used market."
If refurbishing your aging systems isn't an option, you may be able to stretch your IT dollars by picking up the tech assets of failed businesses, says Technisource's Baschab. Log onto the Federal PACER database to find local companies that have filed for Chapter 7, and contact the trustees and liquidators.
"Liquidators are motivated to sell, and the market for these goods is not very efficient or competitive," says Baschab. "You can exploit this situation to find some really good deals."
7. Get virtual -- but pick your spots
Virtualizing even part of your data center can save you money on rack space, power and cooling, maintenance, and disaster recovery, as well as give you more flexibility, says Forsythe Solutions' Wolke. But not everything should be virtualized, he warns.
"Virtualizing assets that are not at end of book life, or whose life is being extended to avoid capital expenses, will not cut your hardware costs," says Wolke. Servers that are nearing the end of their life cycles are the best candidates for virtualization.
But don't expect a quick budget fix from going virtual, warns Apptio's Gupta. "Trying to adopt a virtual environment isn't the easiest thing," he says. "You have to invest more upfront, and the return happens over a longer period of time. You may end up spending more for the first two years dealing with people and server issues, software licenses, and managing the environment. When employed as a medium- to long-term strategy, though, it is saving our customers money."
8. Clean out cobwebbed apps
The good news? Tight budgets are an opportunity to get rid of redundant or legacy apps that users still cling to but you can't afford to support anymore, notes Gupta.
Gupta's first piece of cost-cutting advice for IT managers is to "find no-longer-used or rarely used applications that are still taking up infrastructure, support staff, license fees and administrative fees. Turn them off, recoup the licensing costs, and take that out of the budget."
"One place IT has always struggled has been in application rationalization," adds Wolke. "How many different payroll or CRM systems do you have? In reality, very little gets turned off. But economic environments like this one often push business leaders to put their foot down and say, 'We don't care if you do like this application, it's going away.' It's really an opportunity to retire expensive hardware, free up real estate in your data center and not have to keep certain skill sets in-house anymore."
9. Revoke unused licenses
Now is the time to weed out the applications you're paying for but no one is really using, says Rathin Sinha, chief marketing officer at NaviSite, a hosting and application management provider.
"Do you have a newsletter-generation system, but a newsletter hasn't gone out in six months?" he says. "Cancel the subscription. Have you bought 50 licenses of a software app but only 10 are being used? Cut back."
10. Join the cloud crowd
Cloud computing can provide the benefits of a fully powered data center at a fraction of the cost. But like virtualization, it may not the best call for every application or for enterprises with heavy compliance or security requirements.
"I think there are very real opportunities to save money leveraging the cloud, but it's not a black-and-white argument," says Gupta. "If you're a financial services company or one of the Fortune 100, you'll need to take a hard look at the data security, reliability and availability of the cloud."
If you do decide to move into the cloud, start with underutilized, high-cost IT environments, suggests Ian Knox, director of product management for Skytap, a provider of cloud-based virtual labs. "Dynamic environments like application development and testing are ideal candidates to migrate to the cloud, as capacity and expense easily scale up and down based on demand."
Solstice Consulting's Schwan says his firm uses cloud computing to mirror clients' environments for software testing at a fraction of the cost of traditional solutions.
''In the past, we had to acquire servers and install the clients' software on them," he says. "Now, I can spin up a virtual server from GoDaddy for less than $40 a month, or pay less than a dollar an hour for a full Microsoft SQL Server on Amazon's EC2. That's huge. The ability to do that and pay only for the time you need it is definitely something people can take advantage of right away.
"Do I expect Citigroup or Starbucks to throw away their enterprise infrastructure and move into the cloud over the next two or three years? Probably not," Schwan adds. "But I do think large organizations will start making investments in the cloud via their test environments."