Five Innovative Ways to Cut IT Costs

3. Use Open Source Networking

Open source is a well-known approach for reducing software spend, but if there's one largely enterprise infrastructure area that's ripe for reaping cost-savings by tapping open source, it's the network itself.

Contributing Editor Paul Venezia first put forth that possibility this spring in the article "Open source on the wire: It's already on your servers, why not running your network?" He points out that modern operating systems offer routing and firewalls, not only performing better than their dedicated cousins but, particularly when using open source software, doing so at considerably less expense. Linux, indeed, boasts fast, kernel-level packet forwarding, routing, firewall, and NAT capabilities.

"You're not going to replace switches, but you can replace VPN concentrators and routers with white boxes using true OSS [open source software] and commercialized OSS solutions," Venezia explains, adding that IT shops can find significant savings buying hardware on eBay -- if they're armed with the know-how to support the devices themselves.

An ancillary approach Venezia suggests for those companies that have a couple dozen Cisco switches and corresponding SmartNet support is to buy an extra switch, set it on a shelf, then cancel those support subscriptions. "If one fails, replace it with the spare, and buy another spare," Venezia continues. "Instead of buying new firewalls, check out the plethora of extremely solid OSS firewalls. There might be a little bit of a learning curve, but a little elbow grease goes a long way."

4. Hold Off on Windows Vista

Economic downturn or not, many enterprise IT shops are already delaying Windows Vista adoption -- and an uncertain future makes pushing back the new OS all the more alluring.

According to a July report from Forrester Research, fewer than 1 in 11 PCs within large enterprise are actually running Windows Vista, so it follows that of the 50,000 enterprise customers surveyed, 87.1 percent were still running XP as of June's end.

Countless well-documented reasons to stick with Windows XP exist. Chief among those: Vista's lack of compelling value and poor performance, coupled with the resurgence of Windows XP, thanks to years of updates and patches that make XP more stable and secure than Vista. Plus, most enterprises need to replace their PCs to be able to run Vista, making the upgrade cost very high.

"We're holding off on Vista, but it's not just because of the economy," Cabela's Crowe explains. Other companies, however, are finding the current economic turmoil reason enough to delay a new operating system deployment. "In tight times, I can see making an argument to not migrate to Windows Vista and, instead, saving the short-term investment." Capgemini's Rhody said.

Acknowledging the throngs of customers that still prefer Windows XP, Microsoft last week extended the XP "downgrade" option for another six months. Of course, IT will still have to pony up for a copy of Vista that is then replaced with XP, but the good news is that users can obtain Windows XP that way until July 31, 2009. This marks Microsoft's third extension of XP's availability.

"Putting off the next version is fine, so long as you don't wind up spending IT resources and money customizing it just to keep it up and running," Delotte's Blatman says.

5. Bring in the CFO

Asking the chief of finance to help prioritize can offer a window into the business priorities, so IT can better understand the larger view of projects and adjust its own efforts accordingly. "The CFO can say, 'It makes sense to cut over there,' because another department is undergoing an initiative that aligns with that," says Amy Wohl, president of Wohl Associates.

What's more, when the CFO goes around to a company's business units looking for places to cut, an opportunity arises to prove what IT executives already know: IT is uniquely positioned because an incremental investment can result in more than commensurate return, according to Deloitte's Blatman.

A decision Panera made recently exemplifies how investing smartly can actually be the more frugal avenue. "We decided we could either build analytics into our portal or look at the available tools," Rhoades says. "We saved money directly by buying the analytics." Otherwise, it would have cost more and taken longer to create that functionality in-house, and the goal was to improve communications with store managers as soon as possible, so they could spend less time on their PC and more in the front of the house.

Different enterprises have varying reasons to include the CFO in cost-savings plans, but they all share one bond. "IT possesses the kind of leverage you can't find anywhere else in the organization," Blatman says. "Things will rebound eventually and get back on track. IT doesn't want to be behind then, so folks still need to be planning long-term."

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