Gartner Offers Cost-Cutting Tips For Midsize CIOs

Midsize companies should look at creating cost-cutting teams, pay more attention to reducing maintenance support costs and reduce their networking spending, said Terrence Cosgrove, senior research analyst at Gartner, during a breakout session titled "System Management on an IT Budget" at Everything Channel's Midsize Enterprise Summit in Miami.

Reducing enterprise costs is the second most important business expectation for midsize companies this year, according to Gartner's 2009 survey of 1,500 midsize CIOs.

In a sign of how the economy has changed CIOs' priorities, reducing enterprise costs finished as only the ninth most important expectation in last year's survey, according to Gartner.

Meanwhile, reducing the cost of IT was the third most important CIO strategy in 2009 and it didn't even finish in the top 10 last year.

"A CIO thinks IT has to do everything better, faster, cheaper and become more aligned with the business. The concept of doing more with less has been the anthem of IT operations for the last 10 to 15 years. What's unique now is that fiscal constraints are so much greater and pressure from business is so much stronger. It puts you in the position that IT has to change its way of thinking with respect to infrastructure and operations," said Cosgrove, who laid out tips to help IT organizations lower their costs.

The most important business expectation for midsize companies was improving business processes, but was not a focus of Cosgrove's talk.

Cosgrove detailed several ways that midsize companies can contain costs. To start, organizations should create cost-cutting teams that include representation from all major platforms -- PCs, servers, networking, storage, as well as a financially qualified professional, Cosgrove said.

"A finance person will help because sometimes if you reduce costs in one area, you can increase costs somewhere else. We also recommend someone with a legal background, especially for renegotiated contracts," Cosgrove said.

Reducing hardware maintenance costs can save money through a number of means, Cosgrove said. Gartner has found that the cost of hardware maintenance has increased 5.5 percent over the last year, but the providers' ability to meet service-level commitments has decreased 4.5 percent.

"A lot of clients find support cheaper on a time and materials basis than a subscription," Cosgrove said. He cited one example of a midsize company that saved $10,000 per year by discontinuing maintenance on four-year-old switches, scanners and some printers. The company moved from a 24x7 support contract to a 9-to-5 maintenance window, he added.

Next: Networking Ripe With Savings Opportunities