Welcome to the COVID-19 Budget and Cost Management Center.
Begin by downloading our complimentary essential guide
Info-Tech has developed an approach that's based on understanding your current position in the business economic cycle, establishing a corresponding response mode and identifying key budget and cost management goals. These inputs will enable you to target initiatives within and across four focus areas and access relevant blueprints tools and templates to achieve the budget and cost management goals you have set out and to develop an action plan to achieve them.
Budget and Cost Management Process
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Steps
Cost Optimization
Mandate
Outcome
- Budget optimization requirements
- Review of peer IT CapEx and OpEx benchmarks
- Projected evolution of IT service demand
Cost Optimization
Objectives
- Budget impact scenarios
- Guiding principles for cost optimization
Long List of
Optimization Options
- List of possible cost management actions and enablers
Key Initiatives and
Cost Effect
- Key initiative descriptions and cost impact
Cost Optimization
Action Plan
- One-year cost management action plan
Analyst-Driven
COVID-19
IT Budget Strategy
Identify Business Cycle Position
Identify your organization’s position in the business cycle. There are a multitude of variables that may impact your choice. For example, it may be that you are tracking against an overall economic market slowdown, or you may be tracking against an industry sector expansion due to accessing new markets.
Determine Mode of Response
Based on your position in the business cycle, identify the appropriate response mode:
Reactive (<3 months)
Identify the most effective and least
disruptive cost-cutting measures in response to changing economic conditions.
Proactive (3-12 months)
Enable the organization to respond
appropriately to different types and magnitudes of a slowdown in a planned manner.
Strategic (>12 months)
Establish budget and cost management
efficiency and agility across all stages of the business cycle, ensuring that the IT strategy is sustainable
regardless of changing economic conditions.
Define Budget & Cost Mgmt. Goals
Identify organizational goals for budget and cost management. Your goals will relate directly to several factors such as:
- The business cycle position and corresponding response mode
- Current budget cycle and budget constraints
- Business strategy and IT strategy
- View of IT by the business: Are you a Cost Center? Service Provider? Strategic Partner?
Business
Cycle and
Corresponding
Response Mode
45 Customizable Strategies & Tools to Meet Cost & Budget Goals
Determine initiatives based on mode of response.
You have been informed of a 10% budget cut and must decide on cost-cutting options:
- Reducing headcount
- Optimizing applications
- Scaling back on vendor engagements
- Reducing project overhead by cutting projects
A slowdown has reduced revenues and you need to reduce proposed budget by 15%.
You have time to plan how to reduce your budget for next year:
- Identify skills and knowledge gaps that contribute to higher operating costs and plan to rectify through cross-training exercises
- Identify redundant assets based on usage reports; plan for reduction in assets
- Identify vendor contracts that can be renegotiated or are coming up for renewal and plan for cost-cutting negotiations with those vendors
- Identify the highest priority projects and target those that can be delayed or postponed without impacting the business
The business has identified cost optimization as a major strategic initiative for IT service delivery.
- Establish project portfolio management capabilities that ensure only high-value projects are approved and delivered
- Develop a sourcing strategy that encompasses shadow IT to optimize assets as well as optimize vendor management opportunities
- Establish an AI strategy to leverage RPA capabilities, enabling either headcount reduction or redeployment of human assets to more value-added workloads
Focus Area Activities
Work with our analyst team to build a customized strategy to meet your budget goals while preserving core capabilities and strategic priorities.
Map selected activities to Info-Tech content using the below chart.
| 11 Workforce Optimization Strategies |
12 Asset Optimization Strategies |
10 Vendor Management Strategies |
10 Project Prioritization Strategies |
|
|---|---|---|---|---|
| Reactive |
|
|
|
|
|
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
|
| Cost-Cutting Planning Tool | ||||
| Proactive |
|
|
|
|
|
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
TOOLS AND RESOURCES
|
TOOLS AND RESOURCES |
|
| Strategic |
|
|
|
|
|
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
TOOLS AND RESOURCES |
|
| Build an IT Budget That Demonstrates Value Delivery – Phases 1-3 | ||||
| 10 Vendor Management Strategies |
|---|
| Reactive |
TOOLS AND RESOURCES |
| Proactive |
TOOLS AND RESOURCES
|
| Strategic |
TOOLS AND RESOURCES |
Boardroom-Ready Communication Templates & Strategies for the Pandemic
Prioritize the initiatives
Align the activities and related content in step 2 to the budget and cost management goals determined in step 1.
Prioritize the initiatives based on this alignment.
Develop an action plan
Leverage existing templates and tools in the Info-Tech content to create an action plan to achieve budget and cost management goals.
Build a communication plan
Create a communication plan to inform key stakeholders of progress in the planned initiatives.
Communication should include:
- Answers to “what’s in it for me” questions from all impacted stakeholders
- Roles and responsibilities before, during, and after the initiatives are completed
- Key dates, deliverables, impacts, and descriptions of specific changes being made