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3 October 2006

Cutting costs: where to start

By Andrew Clifford

If you are starting a project, or even if you are part way through, try some simple checks to see if you can cut out costs. If you have not got time, or think they are not relevant, the checks will bring you even more value.

If you structure your IT so that it is easy to understand and aligns well with business responsibilities, then you can see which bits add value and which do not. You can cut out costs by cutting out the bits that do not add value.

But where do you start?

Of course it would be easy if you were setting up the IT for a new business. But life is not that easy. Chances are you've got decades worth of systems with lots of different technologies, intertwined and overlapping functionality, and unclear ownership. You're probably part way through lots of urgent projects, and are short of people and budget.

But you can start from where you are. Like a great ship, a few little turns in the right direction can change your final destination.

If you are already part way through a project, try a few checks to make sure that the project is focussed and can deliver value.

These checks should not take more than a few hours. If they do, your project is seriously oversized and needs to be cut down.

If your project passes all these checks, well and good. Your project is realistic about what it will deliver and can be accepted by its business owners.

If any of these checks find issues, take the time to consider them fully. You might be able to cut chunks out of your project, and deliver the same value. Just what you need if you are short of time and money.

If you are starting a project, try the Minimal IT analysis and design template. This makes sure that the business opportunity, change and responsibilities are defined before the IT is considered, and that the IT is realistic. It should take less than a day to complete.

You can use these techniques if you are starting a project, or if you are half way through. They do not take very long. If you do not have the time or money to do them, or if you think these sorts of checks are not relevant, do them anyway. The more reasons you have to not make these checks, the more valuable they are.

If you are looking more widely across multiple IT systems, you need some more techniques to start cutting costs. I will cover these next week.

Next: Strategic cost reduction

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