Knee-jerk saving strategies could cripple IT and delay recovery

Drastic cost-cutting will compromise ability to position businesses for the upturn, says research

IT leaders should look beyond the redundancy route to reduce IT costs

IT leaders must look into alternative cost-cutting routes other than reducing staff that will be needed to help companies weather the downturn, according to research.

As business imperatives focus on cost savings, more than a third (37 per cent) of 550 UK technology managers surveyed said staff reductions will be the main cost-containment strategy, chosen over other possible solutions or seeking external advice.

Some 75 per cent of businesses surveyed are under pressure to reduce IT spending immediately or within the next six to 12 months. As a consequence, three per cent of managers are expecting reductions in their internal service level agreements (SLAs).

Despite this, 42 per cent of those polled thought IT would be instrumental in supporting their business during the credit crunch, only 25 per cent saw helping increase revenue as an objective for the department and only 35 per cent were focused on customer satisfaction.

“Without focusing on impacting revenues and increasing customer satisfaction, IT departments risk missing out on a once-in-a-generation opportunity to get away from being seen just as a cost centre,” says the study.

“They must present themselves to the board not only as delivering intelligent cost savings in the short term, but also as leading innovation that will underpin a successful strategy during the upturn,” it says.

The research was commissioned by supplier Affiniti.