OBTAIN INFORMATION | Cost Reduction Project

The second step is to obtain the necessary information. Two main areas of information to gather include the budget and spending, and on the assets and inventory. The following are some basic components of information to assemble before beginning to identify cost reductions. If you do not have formal documentation, this information provides ways to develop the necessary components:

• IT budget and spending. Obtain up-to-date budget and spending information. If a complete budget does not exist, collect IT spending information for the past couple of years in a spreadsheet using the components identified in a budget. This information will provide the baseline for cutting IT costs. Forecast costs for the year based on year-to-date numbers.
• Business plan. This information will ensure that you make any cost reductions while still achieving the overall business strategy. If your company does not have a formal business plan, meet with senior management to document the key business goals, strategies, and objectives they hope to accomplish in the next few years as well as the planned business initiatives for the next year.
  Top Tip: Understand what you have
  "Before making reductions, you need to understand what you have. You need the basics in place, such as project portfolio management, asset and inventory management, time tracking, and incident tracking."
  —Randy Witt
  Restaurant Technologies
• IT strategic plan. This information will ensure that the implemented cost reductions will not sacrifice key goals and objectives. If you do not have an IT strategic plan, document the key IT objectives and show the linkage to the business goals and objectives. Document the major IT strengths and opportunities. Identify the key IT initiatives for this year and next year in the areas of business applications, technical infrastructure, IT organization, and IT processes.
• IT project list. You will use this information to re-prioritize projects in light of budget cuts and changing priorities. If you do not have a formal project portfolio, develop a spreadsheet with basic information for each project including the area of the business it supports, its status, its priority, and the costs or estimates needed to complete the effort.
• Application list. Use this information to identify services to replace, consolidate, or remove. If you do not have a formal IT service catalog or detailed current situation documentation in the IT strategic plan, develop a spreadsheet with basic information about each business and infrastructure application. Include the software name, if the software is vendor-supplied or custom, annual maintenance and support costs, full-time equivalents (FTEs) required to support each application, business criticality, and general application health.
• Hardware inventory list. You will use this information to identify components to replace, consolidate, or remove. If you do not have a complete configuration database of assets, assemble a spreadsheet with the key components of hardware assets, including servers, major network components, and desktop information. Include the age, condition, business need, and criticality.
• IT staff inventory. Use this information to understand IT salaries, as it is a major portion of the IT budget and identify whether you need to change the focus of resources. If you do not have a complete skills inventory, develop a spreadsheet to document basic information about the IT staff. Include the number of years of IT experience, years with the company, compensation, bonus, overtime costs, skill sets, tasks, responsibilities, and projects.
• IT organization chart. This will help evaluate supervisor ratios for the potential of merging or condensing the structure for more efficiency. If you do not have a documented organization chart, develop one using PowerPoint or similar software.