Leveraging the Organization



During times of cost reduction, it is an excellent time to look at the IT resources across the company to determine if IT is organized properly and leveraged. There may be IT resources in the business units or they may be decentralized. Ensure there is a valid business reason for this structure. Consider if you can leverage resources across the organization to reduce overall costs. Ensure you do not have duplicate functions in other parts of the organization. By leveraging enterprise-wide competencies and skills, you can reduce staff who are unnecessarily embedded in the business units.
Top Tip 1: Span of control

"To reduce costs, flatten your management team and increase the span of control of managers. Ideally I like to see 6-8:1, but 15:1 is possible for one to two years if necessary."
—Dave Brady
Starkey Laboratories

Top Tip 2: Shared services

"Although it can save money, creating a shared service environment is a tremendous culture change for an organization. If you are coming from a distributed environment with organizations geographically dispersed, proceed with extreme caution. The obstacles in both IT and the business are huge."
—Lina Shurslep
Navarre Corporation

You can also leverage skills in the business. For example, during an implementation the business often develops super users, or individuals with a knack for technology and the business. You maybe able to leverage these valuable resources and it may save you from hiring a business analyst. In another example, a company uses a pull system rather than a push system for report generation to reduce IT labor. The users were instructed to get reports and information on the Intranet rather than sending reports and clogging up e-mail in-boxes.
Evaluate if a shared services model would save costs. Bringing IT resources under a single point of control reduces waste created by policy differences and nonstandard operations. However, proceed with caution because moving resources out of the business units can be a political challenge. You have to guarantee service will improve rather than become less than the current level.

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