Once seen as near-untouchable, IT departments throughout corporate Europe are now feeling the effects of a recession that is asking questions of anyone with resources to manage and a budget to spend. However, making savings is not just about the slashing and burning of staff costs, capital expenditure and project work. Smarter technology and different ways of working might lighten IT’s load on the business. There’s also room for IT to set the agenda, rather than to just follow it. And, as our first tip suggests, it sometimes pays to think the unthinkable. 


1. Take people’s 
PCs away

PCs suffer hardware faults, software requires managing, and they need lots of power. Switch instead to thin clients: low-cost, low-power terminals with chip memory instead of disks, where applications are provided by a central server. Not convinced? Sean Whetstone, head of IT Services at Reed Specialist Recruitment, has already felt the benefits: “The capital outlay for hardware is smaller, and our HP PCs were using 140W and had to be kept on 24/7 for updates. Our WYSE thin clients use 14W and are only on 10 hours a day, five days a week — saving over £100,000 a year on electricity. But the real saving is in cost of ownership. We were paying nearly £500,000 a year in maintenance for 5,000—6,000 PCs and had a failure rate of 10%. The thin clients, which are solid state and have no moving parts, have a failure rate of 1% and maintenance costs £65,000.”

2. Let staff, 
particularly 
contractors, go

Don’t do it as a knee-jerk reaction, but assess who you need. A report by KPMG and the UK’s Recruitment and Employment Confederation says demand for IT contractors and permanent staff is down 40% from 2008, at a six-year low.

3. Get your priorities right
Known as portfolio management, this set of tools and techniques enables companies to prioritise which applications in their portfolio really count and which are of secondary importance. Use it to make a better decision over where to spend a dwindling budget and what projects to freeze or cancel. But tread carefully. Berend De Jong, managing partner at the Gartner Group, warns: “I see a lot of wrong decisions being taken in my client base. Projects in the new environments are being stopped and projects that support the legacy environment, which are the primary cause of a high-cost structure, are being continued.”

4. Buy a 
mainframe

Once the mainframe was king, then came server farms, where processing power is aggregated using scores of servers. Trouble is, a server farm takes up lots of space, cooling and power, so mainframes are back in fashion. Doug Neilson, an IBM mainframe system consultant, says: “We’ve seen customers experiencing 70%—90% power savings by consolidating back on to a mainframe. Power is becoming a major cost, and ultimately could become the largest cost in IT.” Practising what it preaches, IBM is consolidating 4,000 servers on to 30 mainframes.

5. Contract 
out 

Lines are blurring between old-fashioned utility computing, where a firm will crunch your payroll package on its machine, and ‘new’ cloud computing, where unlimited processing power and storage is spread among servers throughout the world. If you’re already outsourcing, it’s time to renegotiate your contract. Julian Friedman, a cloud computing specialist with IBM, says: “In the current environment, it’s a compelling advantage to be able to 
tap into these clouds of resources, the economics are very attractive… at 
the same time, it reduces your time-to-value. Previously it would have 
taken a long time to deploy a large-scale application over many machines. This allows you to do it quickly.”

6. Pay-as-you-go 
software
Known as Software as a Service, SaaS provides a company with an application over the internet. One of the better known is Salesforce.com and its customer relationship management offering. Customers pay per user, per month or longer, for applications from a given library. The truly radical can switch to Don’t Pay open source software. Instead of using Microsoft Office, download the OpenOffice suite for free or look at its paid-for version from Sun. The UK’s Bristol City Council did the latter and saved €1m.

7. Take the 
initiative
Suggest changes to business practice. Neville Howard, a partner at consultants Deloitte, comments: “CIOs seem to be on the back foot. According to research we’ve just carried out, the overwhelming majority [86%] only embark on cost reduction initiatives when they’re instructed to do so, typically by the CFO… I’d far rather see the CIO in the driving seat, initiating cost reduction programmes that not only control IT costs, but which also use IT to help the business reduce their costs.” Howard cites a multinational drinks company whose IT department promoted video-conferencing and collaboration tools to cut down on all business meetings and associated travel costs.

8. Overhaul the data centre

Management software tools can now calculate how efficient a data centre is in terms of applications, workload, storage, cooling and power. Says Ian Brooks, director of Hewlett Packard’s Innovation and Sustainable Computing in Europe, about such an exercise for a major retailer: “It showed we could reduce the servers, floor space required and energy bills. Potentially the data centre would be half as large, servers would be consolidated by 8:1 and bills would be reduced by over 50%.”

9. Turn 
green

Some of the easiest ways to save money — and the planet. Save on energy and reduce your carbon footprint by getting staff to turn off their PCs and printers before they leave in the evening. Consolidate several printers with a high performance model that doubles as a fax. Save paper by encouraging people to think twice before printing a document and only use printers set up to print on both sides of the paper.

10 Go 
virtual 

‘Virtual machine’ software allows you to run applications and operating systems that would once have been on several computers on just one. It’s cutting-edge stuff (though it’s been on IBM mainframes since the 1960s) and is even better when used with ‘virtual storage’. John Boyd, IT manager of warehousing and distribution firm gm2, uses both after systems house Fordway reduced 40 servers to five and 36 storage systems to one (plus a copy, 220km away). The system can quickly be added to if a business opportunity arises. “Ours is an unfriendly industry in terms of profitability and risk,” says Boyd. “You have to be very nimble to take advantage of situations. This gives us a fleetness of foot we wouldn’t otherwise have.”