CIOs are gearing up to recover from the damages caused from the pandemic by reducing IT budgets.
CIOs globally are working towards recovering from the economic impact caused by COVID-19 pandemic. The first step for IT leaders is to slash IT budgets to navigate through the economic slowdown. The total IT spending is expected to be reduced between 12%-14% in 2020, as per Forrester. Projects, contracts and hardware are some of the areas where CIOs can trim their IT budgets.
1. Portfolio assessment
Enterprises can focus on comprehensive portfolio analysis of the tools, services, and systems and also planned investments to decide if they are still required. In addition, it is also important to adopt cloud services that enable distributed teams to work productively.
2. Software Licenses
Another way to reduce IT budgets, is to ask software vendors to reduce the number of licenses they are paying for. If it is not possible to get a refund for some of the software licenses, it may work to get credits for unused licenses for future contracts. It is essential to assess the IT tool portfolio and do away with duplicate or unnecessary tools. The saved money can be re-deployed to maintain skilled staff and focus on digital transformation initiatives
3. Hardware Purchases
As per experts, hardware purchases are responsible for up to 10% to 20% of the IT budget; however, cutting projects and hardware results only in a 10% reduction in overall spending. CIOs can take a relook at vendor contracts and go to vendors and renegotiate them in case it is going overboard.
CIOs can put it off long-term projects, while accelerating those that help with streamlining
workflows. Utilizing and expanding technologies that are doing the majority of automation of processes internally, is crucial.
It is not easy to find skilled IT professionals therefore; reducing talented workforce should be a last resort. CIOs can transition IT folks into new roles like managing a remote working team or training cyber security teams to deal with cyber threats and attacks that are aimed at employees working from home.