Less Is More, Up to a PointBy John McCormick | Posted 2004-10-01 Email Print
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Has the cost cutting gone too far? Warning signs that your technology budget has gone as low as it can go.
Have you cut too deeply?
Arnold Testa, chief information officer of the Electronic Power Research Institute (EPRI), a Palo Alto, Calif., firm that provides research and development services to energy companies, says EPRI might be on the verge of finding out. His budget has been cut by 35% over the last four years.
Testa's desktop support has fallen from 14 people to 7, and remote users can largely forget about help. "We've been very aggressive, but service levels could begin to suffer," he says.
Not all technology executives are as worried as Testa. Many overseers of corporate technology are content to cut until they see bone. The expectation appears to be that Moore's Law applies to information management. Meaning: Budgets will keep going down and productivity will relentlessly be expected to go up at the same time.
Aware of the pressures, some technology executives are recasting what they do with budgets. "It's not about cost cutting. It's about creating value," says Scott Griffin, Boeing's chief information officer. To Griffin, creating value is implementing technology projects that have a business-wide impact on profits and revenue.
What is "value"? It can be many things. But in the end, it really is a spin on Moore's Law. It means getting more for less.
But cutting costs too far can backfire, as Interstate Bakeries found out when it tried to boost the shelf life of its Wonder Bread to cut costs and landed in bankruptcy. According to executives gathered at the Society of Information Management's SIMposium conference last month, here are some signs you have cut too far:
Christopher Feola, CIO of AskSam Systems, a Perry, Fla.-based document search company, says executives need to prepare for a time when chief executives will ultimately ask, "How do we grow the company?"
Are you ready?