The other day I ordered this poster to hang in my office from one of those de-motivator sites…
Image may be NSFW.
Clik here to view.
Many people have predictions about the second coming of another recession, QE3, QE4 (what does queen Elizabeth have to do with our economy anyway), and long-term growth in a number of emerging countries.
(You can choose to listen or ignore the pundits)
Your micro economics will be tied to global and national economics, and your company’s mico-economics will impact your IT economics. This is the nature of trickle-down economics.
There are some proven and stable principles related to IT economics that are important to help you navigate current and future trouble-spots. Here are my top 10 ideas (for this month) if you are looking into a cost reduction exercise for your company’s economy:
- Price is not cost, so focusing on price reductions alone will impact cost very little. The price of disk is only around 15-17% of storage TCO. So, even if you negotiate a 10% or better price, that effort will only impact 1.5 – 1.7% of the TCO.
- Focus on cost reductions in a down economy by pulling a fine-tooth comb over operational costs. Labor, power, cooling, maintenance, data protection and DR protection all need to be reviewed to determine where costs can be trimmed.
- Save some bullets for later – a cost reduction strategy is one that is planned for over a few years, two at a minimum. Take care of the easier cost reduction items first, saving the harder ones (political or organizational) for later.
- Do the easy things first that impact total cost, but not all of them – remember to save some easy cost options for later next year, too.
- Isolate and work on costs with those people that measure (or care about) and own the costs. You need alliances in cost reduction planning, and the IT department may not directly own all the related costs.
- Beware of quick-fix solutions (and by the way, most solutions to reduce costs are not free) that appear too good to be true. Make sure that vendors are helping you reduce the costs that are important to you – not the costs that they can achieve for you.
- Attitudinal and political changes are the most difficult to implement.
- Changes often require rewards and penalties, so factor that into your plans.
- Understand the differences of hard costs and soft costs
- Measure twice, cut once – make sure that you can measure now and measure later what you can impact.
