CIO OPINION
include expenses that are incurred and
paid monthly or quarterly on a ‘pay as
you go’ basis, rather than annually.
2. Reduce, don’t freeze. Focus on costs
that can truly be reduced or eliminated,
not just frozen for the current period,
only to reappear again further down
the line.
3. Cash is king. Target those items that
will have a real cash impact on the profit
and loss statement rather than noncash
items like depreciation or amortisation.
For example, cost savings in cloud
services have a real cash impact, as
opposed to reducing on-premises
software licenses or owned assets like
“
MOST
ORGANISATIONS
DON’T CUT
DEEPLY ENOUGH
THE FIRST TIME,
WHICH MEANS
THEY OFTEN NEED
TO REVISIT COSTS
AND DO IT AGAIN.
hardware. Selling and leasing back assets
can provide real cash savings as well.
4. Target unspent and uncommitted
expenses. Unless payments (or
commitments) can be recovered
or prepayments returned the most
immediate impact will be on unspent
or uncommitted payments. Evaluate
contracts for renegotiation and
termination clauses.
5. Address OPEX and CAPEX. Typically,
operating expenditures (OPEX) are
the easiest to impact, but capital
expenditures (CAPEX) can also be
reduced. Gartner’s IT Key Metrics Data
shows that 25% of the average IT
budget is spent on capital, so ensure
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