IT Budget: Pinch Pennies Without Hurting Operations

Expected or not, as an IT manager, you may come into a situation where you have to cut your budget or put your staff – or maybe yourself – at a layoff risk. The catch is to make the budget cuts without hurting the operations. To say, this is the choking point.

Of course, such a situation will come with dire consequences. Your IT department will go a few years back while the company moves forward. The gap between the next years IT requirements and next year’s infrastructure will be wider than today; and everybody should know that. To be frank, there are still some decisions you can take to pinch pennies. Here is the help you need.

The first thing you have to do is prioritize. Take a list of your budget items and decide which of them has higher priority. The highest priority items are the ones that exactly match your company’s next-year targets and longer term strategies. Other items have lower priority. This is how your board will evaluate your budget and question the items. Do your homework: set priorities and make sure that the spending on the priority item is right on. Don’t say “it costs something roughly like …”, but say that “the investment we have to make is X $.” This signals that it is really necessary and worked on.

Next on the list is to take a look at your data center. Most probably you will need to go through a “cleaning” process, where you will identify zombies and consolidate resources. This will reduce your data center running costs and free up resources for other uses. And once you free  resources, you can use them for your available tasks. If you think that they are really aged, think of using them as a Linux cluster. Linux clusters are so flexible that you can use them for almost any purpose. Blaise Barney from Lawrence Livermore National Laboratory has a very comprehensive page on the Linux clusters, so I recommend you to go through it. You cannot imagine how many ideas this page will trigger in your mind.

If you have not started yet, your only project this year could be virtualization. You may be saying that you already have to cut costs and I’m telling you about purchasing a virtualization solution. No. For a Windows centric infrastructure, you may go with Hyper-V Server and for a hybrid environment, you can go with Xen, or KVM. All of them are free and are excellent hypervisors. Once you begin to virtualize, you will see that your department’s workload is decreasing: maintenance is streamlined, costs saved on hardware, backups are easier. Virtualization is a game that has no losers.

It may come to the point that you are not able to reduce your data center expenses further. At this point, colocating your data center may be an option. This is not as easy as it sounds and comes with its own challenges. Review the challenges, make the math. If it is cheaper to colocate, then go for it. Similarly, moving your email to the cloud is another way to cut down the costs. If your company is in a difficult situation, move your email to the cloud – it has many benefits, not just the financial savings.

Speaking of going to the cloud, going Google may have more than pennies per user. I have argued that Office 365 is better for your business, and given that you afford it, my idea has not changed. But going Google has one hidden benefit: you can use older equipment as Chromebooks and Chromeboxes. Nowadays Neverware, the startup that offers a Linux distribution that turns your computer to a Chromebook/Chromebox and their product Cloudready is free. The net sum of making such a change is obvious.

If your company decides to keep the data center and emails in house and not move them outside the company, then there are still things you can do both on the software side and hardware side. On the software side, have a look at your enterprise software. Which titles are used most and which are replaceable? You may not be able to move your ERP solution to another vendor, but you can deploy open source applications in place of licensed ones. Open source is reliable, secure and scalable (up and out) and serves many things that one company needs to run. After all, if you are really considering the additional dollar, you may as well consider LibreOffice rather than Microsoft Office (especially if you have license renewals coming).

On the hardware side, you can purchase second-hand equipment. Of course you are purchasing something that may die a couple of months later or just doesn’t work but don’t forget that we are talking about “doing something versus losing everything” scenario. Think about purchasing network equipment second hand: routers, switches, access points and cables have a long service life and they have rock bottom prices in the second hand market. Similarly you can go with a second hand purchases for your client computers. You can never imagine the number of people selling their brand-new equipment with incredible low prices just because something new and shinier is out in the market. Take advantage of such purchases.

Rethink your mobile policy. Rethink if everybody needs to go mobile. One of my customers once went so far to issue Blackberries to the secretaries (no offence to secretaries) who have absolutely nothing to do, no call to answer after office hours. If you are paying the employees’ bills, rethink if everybody’s calls should be paid. If your company is in such a dire situation, then it may be the time to strip off the luxury and stick to the basics: needs are more important than “nice-to-haves.

Don’t forget the travel expenses. Instead of having people traveling, you may deploy a videoconferencing solution and have a dramatic impact on the company’s overall spending. Almost all laptop omputers come with a camera and the ones for the desktop computers are dirt cheap. Why not just train users to use videoconferencing?

Last, you may assist the company with your staff. Instead of bringing in new hires, maybe some IT staff can be shifted to other departments or simply take on additional work from them. The synergy that will be created will be awesome: non-IT departments will benefit from IT staff’s systematic troubleshooting and problem solving skills, learn some computer tricks and IT will better understand the business and will come up with its own recommendations and solutions.

So, this is my list of items to navigate in the dire straits for any company. What about your take? Hit the comments below!


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One comment on “IT Budget: Pinch Pennies Without Hurting Operations

  • Jen

    Great ideas for penny pinching without hurting operations. It can be stressful trying to create a tight budget, but it’s totally necessary. And yes, not everybody needs to go mobile. It’s amazing what can be cut when push comes to shove.

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