Budget is a major concern for any CIO, and one of your biggest responsibilities is managing your company’s information technology budget. Changes in the budget will have a major effect on your day-to-day activities. Here’s how budgets for IT will vary in 2017:
Budgets Compared to 2016
About half of companies have the same budget for 2017 as they did for 2016. If you fall into that category, you should be well-prepared for upcoming costs. You managed the budget well last year, and you can manage with the same amount of money this year.
About one-fifth of companies have cut their information technology budgets, however, which makes things more difficult for CIOs. CIOs at these companies need to aggressively find ways to cut costs. If you’re in this situation, you may be worried about how you’ll manage to deal with the new budget.
Finally, about one-third of companies have actually increased their information technology budgets for 2017. If you have more money to work with this year, you may feel lucky. Still, you need to carefully manage your increased budget to avoid overspending.
Strategies for Reducing Costs
There are many ways CIOs are working to reduce their costs. Some are reducing the number of projects that support the company’s overall operations. Others are deciding to do less software maintenance than they did in the past. These solutions can be risky because they can make your department or the company less effective.
Another strategy is to try to renegotiate contracts with your suppliers or providers. For example, you could try to get lower monthly rates from your cloud vendors. Some CIOs who aren’t yet using the cloud are also planning to make the switch from on-premise solutions to cloud solutions to cut costs. All of these strategies can help you stay within your budget.
One cost-cutting area CIOs may overlook is recruitment and hiring. Since you’re not an HR manager, you may not think of hiring in terms of costs. However, this is an area where you have the potential to save a lot of money.
Reducing Costs in Recruitment
IT is often project-based, so you may have fluctuating staffing needs throughout the year. Some quarters, you’ll have big projects to complete. You’ll need to quickly bring on workers to get the job done. Other quarters, you won’t have anything major going on, and you won’t need anywhere near as many workers. Constantly recruiting, hiring, and firing employees can drive up your costs.
Consider all the tasks you must manage to recruit and hire new employees. You need to post ads, read resumes, and choose who to interview. You need to conduct those interviews, conduct reference checks and background checks, and fill out new-hire paperwork. Once your big project is completed, you need to let those employees go. When a new project comes along, you need to start the whole process from the beginning.
The costs add up quickly, though you may not track them. Replacing a salaried employee can cost six to nine months of the departing employee’s salary. To stay within budget in your department, you need to find a way to reduce your recruiting costs.
The easiest solution is to outsource your recruiting functions to a recruitment agency. It makes sense to outsource when you need to cut costs. When you work with a recruiter, you can quickly hire contractors for your IT projects. You won’t need to waste your time or money reading resumes. When projects end, you can easily send the contractors back.