Six budget tips for surviving 2009

Old notion: Budgets change, but with some measure of predictability. New order: Be prepared to reset projects and expectations -- on the fly.

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Shah says companies are also ditching the usual full-year budget plans and instead are providing funding in quarterly lumps. "Companies are doing scenario planning, which is not new, but it's coming back in style," he says. At the close of last year's fourth-quarter, for example, some enterprises were reserving the right to make decisions as late as the end of December, says Shah.

Barron is preparing for possible fluctuations by using what he calls a "sliding bar" approach. In other words, projects will maintain their ranking on the priority list, but as funding shifts, the bar will be raised or lowered. "The more funding available, the lower the bar goes across the list," he says.

5. Learn More About So-Called Silver Bullets

The credit crunch practically guarantees that CIOs will be pressured to consider new computing models that promise lower capital costs, such as cloud computing, which refers to a variety of techniques in which technology capabilities are provided as a service. "I'm sensing that the cloud will become to the '08-'09 recession what offshoring was to the '02 recession -- a silver bullet trumpeted by pundits and business media," Shah says.

But he warns IT leaders to thoroughly investigate the economics of the cloud, including migration, transition and security costs, as well as the solvency of the vendors that offer it. "Capex is not just affecting end users but also technology vendors," he says.

6. Ruthlessly Clear Dead Wood

As companies ask all departments to look for efficiencies, IT won't be excluded, says Potter. Gartner is advising IT leaders to look for savings on three fronts until they return their focus to growth strategies.

The first is IT procurement. Potter says it might be possible to renegotiate or rebid contracts. And some Gartner clients are delaying big purchases, slowing down projects and even slowing the procurement approval process itself, to ensure that a purchase is the right decision and to obtain better deals.

The second category is cost savings within IT. Potter sees a renewed focus on reducing per-unit costs, such as cost per server, per terabyte of storage, per help desk ticket, per programmer or per line of code.

The third focus area is joint business and IT cost savings. This includes evaluating and possibly reducing the application portfolio by a certain percentage and eliminating redundant functionality.

No matter what happens in 2009, the IT organizations that rise to the top will be those that cut carefully if they need to reduce costs, focusing on the margins, not the core. That's why this downturn is so much different from the dot-com bust, Potter says. "IT was seen as the problem in '01-'02," he says. "But this time, IT will be looked to, to make up for possible reductions in staff and for revenue growth."

Next: Green computing initiatives have crept along at a snail's pace, but change is coming

Brandel is a Computerworld contributing writer. You can contact her at marybrandel@verizon.net.

Copyright © 2008 IDG Communications, Inc.

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