Thinking of putting your Information Technology initiatives on hold because you are spending too much?  Instead of putting the initiative on hold, maybe all that is needed is an adjustment to your strategies and tactics.  Maybe you need to position yourself and your business to react to ups and downs in the economy; position yourself to be ahead of your competition.  

Some steps you might want to consider:

1. Start shifting how money is being spent.  Review your total IT spending.  According to a Forrester Study ^1, IT budgets range from 2% to 15% of Revenues.  According to a CIO Study ², IT budgets range for 8% to 18% of Operating Expenses.  Regardless of which statistic you think is right for your organization, IT spending is a substantial portion of a business’ budget.  Out of the money spent, many businesses spend between 70% and 80% maintaining the current status.  Best Practices recommends 60% on maintaining your information technology; 40% for new initiatives.   

Some ideas to help you shift your spending pattern:

• Follow our “Keep It Simple Tips” such as Standardize, Use Industry Leading Products, and Don’t Re-Invent the Wheel.

• Eliminate unused software and hardware; eliminate unused license fees.

• Use hardware and software products that you currently own.  Consolidate equipment and integrate applications.

• Review mandatory versus discretionary spending habits.  Some projects and initiatives just need to be done because of equipment age or product lifecycle. 

• Modify current processes and change policies to better use existing tools.

• Consider purchasing products that meet business needs; it is not always necessary to purchase the “best in breed”.

• Leverage the internet and social networking if appropriate.

2. Before cutting a project or initiative from your plan, determine if there is a compelling reason for it to remain.  For example, does the project enable or provide the business with cost efficiencies?  Is the project or initiative critical to meet your 2009 growth targets?

3. Be careful when purchasing “new technology”.  Vendors are eager to sell hardware and software and the solution may not always be the best for your organization.  The solution also might not work properly with your current infrastructure causing you to spend additional funds. 

4. Align Your Information Technology with Your Business Strategy.   Assess your current information technology (software and hardware) and evaluate against your existing and future needs.  If a project does not match your goals, don’t spend the money.  Develop a short as well as long term Information Technology Plan.  If you are not comfortable planning and budgeting for your organization’s technology needs, hire a consultant that understands both business and technology to assist you.  It might be some of your best spent money. 

1 Craig Symons, “The Five Essential Metrics For Managing IT”, Forrester Group, 4 April 2008, <www.forrester.com>

2  “State of the CIO 2008”, CIO Magazine ,  10 December 2007,< www.cio.com>