Is IT Outsourcing For You?

  PMO   Portfolio Management  

Andrew Carnegie was a shrewd businessman who consistently did better than his competition. A key to his success was that whereas his competitors concentrated on maximizing their revenue to increase profits, he concentrated on minimizing cost to generate higher profits.

When the going was good--and the steel industry in the 19th century saw plenty periods of high demand--most steel makers could easily make money by charging higher prices since they had little incentives to keep costs down. Carnegie, unlike his competition, did not let the good time derail his cost-cutting strategies. He not only controlled costs, he also regularly modernized his plants. So when the tough times came, he still had a healthier margin thanks to his low-cost modern plants.

This is Basic Profits 101 stuff, and you don't have to be a 19th century industrialist like Carnegie to figure it out. It's pure deduction--you bring more money in, let less money goes out and--viola!--you keep more money with yourself. The trick is to do it effectively.

The current economic conditions have forced all businesses to look inward. When revenue is difficult to come by, everyone has to reduce the cost structure and all functions are fair game. Over the years, IT has become a big component of business, making it a natural target for cost cutting. IT is also a very critical factor in improving business …

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