Accenture study: 72 percent of IT executives asked to reduce spending

by Editor 2/17/2009 4:25:00 PM
Accenture has released the results of a recent survey in which a significant number (72 percent) of IT executives from the U.S. and U.K. revealed that they are being asked to reduce costs and to use information technology to cut business spending at their firms.

Accenture executive Michael Nieves said: “CIOs need to get away from looking at small cost reductions and figure out ways that will result in steep cuts of as much as 30 to 40 percent. Also, the key lesson they have learned from earlier IT reductions is that the indiscriminate swing of the hatchet can create unintended consequences and adversely affect the entire organization. This time they need to make it sustainable and improve the performance of IT as a cost differentiator.”

Nieves recommends a three-way approach to cutting costs:

  • Minimize – identify clear and immediate cost reduction opportunities
  • Optimize – improve the use of IT assets, thereby divesting non-essential assets and decreasing the average per unit cost of IT assets
  • Redesign – implement structural changes by shifting the focus to an efficient and effective IT operating model that will secure long-term sustainability.

“There are many different levers within each of these three facets,” Nieves explains. “The challenge to the CIO is ‘Which one do I pull? How do I squeeze on one side of the waterbed and not have it leak on the other?’”

“Cuts need to provide relief in the near term, the midterm and the long term, which entails months or quarters rather than years,” he says. “CIOs should see the big picture and demonstrate cuts that are sustainable and will improve business performance over time. The call for action is now.”

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