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Cutting IT budget

by on March 8, 2010

In a bad economy, cutting IT costs is reasonable and even imperative. However, the reduction of the IT costs should not jeopardize the long term viability of the organization. In addition it should not cost the organization more money in the future than it saves at present. A lot of IT budget cut proposals seem appealing because they save money immediately, are easy to execute, or introduce cool and state-of-the-art technologies. But it is highly possible that those proposals have latent risks that may not be easy to identify or to understand by executives. A good proposal for cutting IT costs should identify the long turn impact on the organization and the damage in extreme cases so that the executives won’t make decisions in a vacuum. When screening ideas of cutting IT budgets, the decision makers must align the goal of saving money to survive the downturn with the long term goal of the company, making only changes or sacrifices that won’t put the organization’s core business value in danger.

Xiaopu Yu


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