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The new CIO toolkit

Divina Paredes and Sim Ahmed | Aug. 14, 2012
Michele Caminos, managing vice president at Gartner, said ICT departments today face the reality of operating in "a very lean environment".

Michele Caminos, managing vice president at Gartner, said ICT departments today face the reality of operating in "a very lean environment".

The 'new normal', said Caminos, is an uncertain economy and tight budgets.

Cost reduction remains a high priority -- ranking number three among ICT leaders, based on a recent Gartner survey of CIOs.

But at the same time, she said, CIOs want to shift their budget away from "run" (mainly IT infrastructure and operations) - to "grow and transform".

"CIOs have really been driving down costs, and you have to wonder how much leaner we have to get," said Caminos, speaking at this year's MIS100 Event in Auckland. "So the question is, where do we go [to] have the biggest impact?

Read the 2012 MIS100 report on the top IT using organisations in New Zealand

"You do not look at low hanging fruit, you look at where the big chunk of your budget is being spent and right now it is being spent in infrastructure and operations," she said. "Sixty percent of your budget is still keeping the lights on."

She then listed 10 areas for cost containment CIOs can go through in the next 12 months:

" Re-examine networking costs

" Consolidate infrastructure and operations

" Virtualise infrastructure and operations

" Streamline IT operations

" Reduce power and cooling needs

" Contain storage growth

" Optimise multi-sourcing

" Enhance IT asset management

" Push down IT support

" Defer non-critical key initiatives.

The top five strategies, she said, "will give you the biggest bang for your buck."

She said Gartner's global survey of CIOs found three-quarters of IT departments have not fully explored and deepened these cost saving activities.

"What we are seeing on average is if you continue to be a level of involved or engaging in these activities you can save at least 10 percent over the next 12 months and up to 25 percent of your savings for the next three years.

"These are quite significant and not to be overlooked especially when we are working in a very lean environment," said Caminos.

She suggests working through the 10 areas as systems are interrelated and interconnected. "We have to have a very extensive view and a very comprehensive plan, we can't come in with a very siloed approach," Caminos told more than 50 CIOs in the audience. "Our advice is, you have to go through all 10."

Action points

Caminos gave practical examples of how to apply these principles, tackling the first area, networking budget, specifically telecom services.

"Work with your telecommunications provider to drive down costs," she advises. "Look at individuals with personal contracts for their telecommunications services and move them to enterprise contracts."

 

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