Has your company put the brakes on spending? You are not alone, it’s a common condition.
If you have recently been told to cut spending you should take steps to ensure that your organization does not fall into the habit of thinking that your IT Projects are all a one time spend and that just because everything is working today, that it will continue to work for an indefinite period of time. It is very easy to be penny wise and pound stupid during financially challenging times. Make sure you are doing right by your employer during any joint venture or acquisition made during this time by educating your Management Team to the value of IT and its support of the business.
All IT Professionals know that maintaining a solid infrastructure requires continuing capital. Quality infrastructure and personnel are not inexpensive, and often Management doesn’t seem to understand. This is more the case at small and mid-size companies, especially those that have never had to stick to a budget because business was always booming. Now that the industry has contracted, they are faced with the reality of cost containment and OMG! sticking to a budget.
The first thing some companies do is place freeze on spending and hiring. Frustration soon follows as Department heads who are used to having signature authority for large purchases find themselves being micromanaged at a myopic fiscal level. You signed contracts for many 10s of thousands of dollars for the last several years and now you have to seek Executive Management approval for $1000 SaaS agreement. It’s a hard pill to swallow, I know, I was faced with this very reality in 2008 during the housing crash in Houston. All ongoing projects cut short, future projects on indefinite hold and no spending unless absolutely necessary. And oh yeah, I was told to cut headcount by 10% by the end of the week.
My team had already been reduced by 25% the previous year, mainly by attrition and Executive Management enforcing ‘Do more with less’. It’s tough but you make do, right? I didn’t see how I could cut any more staff and maintain current SLA’s.
How to cut 10% payroll without laying anyone off? My solution was to have everyone including me, take a 20% temporary pay cut and work a reduced 4 day work week with staggered schedules to cover all shifts. After individual and group team discussion, I went to the Executive Team and they accepted my proposed solution. Not all of my colleagues were happy that I figured out a way to keep all of my staff and reduce payroll by more than the 10% mandate. In hindsight I should have suggested this be implemented across the board in departments where it made sense.
What to do with that extra time? Some of my team saw it as an opportunity to go camping, study for new certification tests, or simply catch up on long lost sleep. I focused on boosting my then part-time consulting business and used the opportunity to more than replace the reduced income at my full-time job. I have since moved on and now am a full-time consultant helping others in similar situations find creative solutions to similar challenging problems.
Getting projects funded in tough financial climates is tough but not impossible, I have found it be a matter of perspective and sometimes, a lack of business knowledge. Before blaming Management for their lack of understanding, you should take a step back and understand who your audience is.
Your Executive Management Team are not IT folks, they don’t care about the latest whizbang feature or whozit of whatever hardware/software you want to buy. All they hear is “Hey, give me a wheelbarrow full of money so I can buy new toys.” They’re thinking, “Don’t you get it? We’re in dire straits and can only spend on what really matters.”
It’s your job to help your Executive Team understand why this project needs the go-ahead from a business perspective.
Have a Data Protection Project? It’s not about 3DES or 2048bit encryption or other technical jargon, Executive eyes glaze over about 30 seconds into this type of presentation. No, it’s about protecting customer data in case of a Security Breach and protecting the company from potential legal liability.
Other business tacks to take; Cost Containment (pay now or pay later – which costs more), Compliance Issues (potential fines), Business Continuity (potential lost revenue per day; customer retention), Information Security (protecting customer data to avoid potential lawsuits and fines)
Try a more creative approach to Project Authorization and I’m sure you will have greater success and bring more business acumen to the table and may even find yourself being asked to provide input to how IT can help the business in the future. But that’s a topic for another article.
-- this post originally appeared on LinkedIn --