Cost Cutting in Tough Times
But in the long term, in this slow economy, where in some places it's a recession, many organizations are slowing their budget growth or cutting costs more aggressively than since the early 1990s. Many firms are stalling technology upgrade plans. With security operations more dependent on information technology, a squeeze in IT spending reflects on protection plans.
In this environment, it's useful to see what the business gurus and computer and communications technologists are thinking as they face their own large, deep challenges. Among recent readings was an article "The Kindest Cuts" by Christopher Koch (Darwin Magazine), which has sage advice that can easily apply to security directors and managers. There's also good advice bundled in an article, "Who Has the Next Big Idea?" by Daniel H. Pink (Fast Company), and in a book coming out this month, "The Agenda: What Every Business Must Do to Dominate the Decade" by reengineering guru Michael Hammer.
Give in But Don't Give upA good strategy, plan or security program is good even if you cannot afford it right away. A Darwin study just found that 40 percent of respondents say they are cutting costs by cutting "improvement projects," especially those that don't come with return on investment (ROI).
With that in mind, there are a number of potential moves.
First, remake your case by adding ROI to a stalled plan or program. While not that easy for security operations, ROI can be squeezed out of lower insurance, lower liability, less overhead and-hardest of all-less losses.
Second, see if you can postpone a project, by having management agree to funding it in the next quarter or next half year. It's not just a matter of buying time. It also means that you continue to see value in the plan or program and that the only thing delaying implementation is a temporary business downturn.
Third, cut up a major project or program into more manageable bits, or less expensive steps. This strategy allows you and management to stay committed to the program in a changed environment of cost containment.
What About Next Gen Tech?According to Pink and Hammer "the signature innovation of the new economy is an organization that creates value by embracing change and innovation." However, any company can and security departments are a prime area of such activity.
The most important area of change is the process of doing business or handling security.
The essential element is customer service. But for Hammer the essential elements are discipline, structure and repeatability. For the restructuring guru, the service hero, who may grab attention for the extra effort, is not worth it. Instead, it is better for the system to work consistently and constantly thanks to discipline, structure and repeatability.
Change the Way People WorkInstead of bringing in new hardware and software, look at the way people work and change the processes. While there is a growing pressure to upgrade technology, in recessionary times, it makes as much sense to change the way people work. Spending on IT and new technology does have a positive influence of revenues, according to a University of Texas study.
But an IT boost at the top line, says the Darwin Magazine article, doesn't always make its way to the bottom line. Companies that spend big bucks on technology are not more likely to be profitable than those than don't, according to the study. "Good management, business strategy and products still matter more to a company's fortune than good IT."