Belt Tightening through Capacity Management

When tough economic times hit, the message inevitably comes down from the CEO to engage in some serious belt tightening. Among the first things to go are travel, training and other “discretionary” expenses. Next, the CEO is peering down the hall into the CIO’s office to see how to curtail IT costs. Unfortunately for the CIO, curtailing IT costs after the economy has hit bottom is like turning around an oil tanker. When times are good, business partners love to spend on IT, and spend like drunken sailors they do. When the economy comes to a screeching halt, it is difficult to unhook them from the addiction of IT consumption.
 
The problem is that for the most part, no one in the corporation has been really good at paying attention to IT consumption, including IT. A large part of the mindset has always been driven by the fact that IT commodity costs go down rapidly, so increases in consumption are offset by decreases in cost. Additionally, when companies are growing, the goal is to meet customer needs--not to figure out the most efficient way to meet customer needs. I recently spoke to a friend of mine who is an IT executive at a growing bank, and he told me that he had no time to think about systems consolidations because the business was growing so quickly. So when the time comes to bring consumption to a screeching halt, nobody really knows what to do…

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"Common sense is the collection of prejudices acquired by age 18."

- Albert Einstein

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