Doing less with less

The recession has forced most CIOs to stretch their budgets. But blind acceptance of the 'do more with less' concept is a recipe for failure. Instead, companies should understand what thoughtful cost management is, and learn how to do less with less.

This is according to Terry White, director at local advisory firm Marketworks, who will speak at the ITWeb Doing More with Less conference on 9 March, at The Forum, in Bryanston. The event aims to offer IT managers and CIOs expert advice on stretching their IT budgets to meet growing business needs.

White is of the opinion that a budget can't be stretched too thin. Instead, he says, IT functions must be prioritised and funded fully or cut completely.

“People don't do more with less. Assuming you have an efficient organisation, there is not a lot you can do with fewer inputs, such as resources, budget and people,” argues White. Instead, he proposes that companies acknowledge that they have less and then prioritise, defining what to do well and what to stop doing altogether.

White is opposed to blanket budgets, which typically means a 10% budget cut. This leads managers with reduced budgets to make strategic calls based on their own priorities, he warns; a strategy that assumes everything in the organisation is of equal value.

This reduces the effectiveness of the organisation, warns White. “How do you know what you do well, if you have a view that everything is equally important?” he questions. This in turn leads to random failures, because managers don't know where the strategy will fail.

“Organisations should know what their costs are and should decide what they do well for the best returns, and fund these activities fully,” advises White. By the same standard, companies must decide what is not working well, and stop these activities.

White recommends thoughtful cost management: “This requires that you know what each activity costs and how these costs agglomerate into returns for having spent that money. Only then can you decide what to cut and what to keep and fund fully.”

“The true consequence of doing more with less should be a refocusing on those things that add to the bottom line, and divesting of those things that don't. Only this way will an organisation survive the present and be prepared for the future,” concludes White.