Tips for reducing IT Budgets

* Employee training is very important. It will improve skills, improve motivation and generate individual leaders and contributors to the project. Communications should flow effortlessly from amongst peers and other departments or division. This can also be improved through regular meetings updates or lunch and learn activities and make it fun for everyone.

The objective of this study was to compare WestJet’s IT cost, resources, and budget to the industry standards. The observation was: WestJet’s IT was right on target regarding the total number of employees, but there were problems regarding the IT employees, firstly there were many IT employees who started their careers with WestJet and they only knew “The WestJet IT way”. Also, there was a mismatch in the number of employees within the skill sets as compared to other similar sized companies. System operations and procedure were somewhat matching to the industry standard but were not up to the mark. IT budget was the main concern, every month meetings were scheduled among the VPs of business unit and VP of IT regarding the negotiation of the priorities and resources, but business unit VPs were not able to prioritize the things which resulted in pressure on IT unit that eventually caused longer time in the execution of projects. The IT organization at WestJet was Structured as per the IT’s group’s conventional internal function of planning, Building, operating, maintaining and

Sometimes IT professionals are declined budget forcing them to deal efficiently with what they have. Therefore, they must follow the advice of Mr. Fawcett. There are three things he advises every CIO with:

Making investment into IT requires precise valuation of the available resources and consideration of the potential risk associated with the success or failure of that specific project. IT involves both machines (which can be both hardware and software) and manpower in order to run those machines. In order to operate and implement the IT strategies the organization requires highly skilled

There are many keys elements with training and development that will improve performance. Training is very important, it provides the opportunity for employees to expand their knowledge. When a new employee is hired they will required to participate in orientation program, which gives employees the job satisfaction and gives them the commitment of being with that organization at the beginning.

I learned several lesson from the case study that has significant implications for my organization. First, I learned that my organization needs to align its IT and business strategy. Second, it needs to benchmark its IT capacity, capacities, and structure and highlighted the related weaknesses and concerns. Third the organization needs to find out the right solutions by getting consultancy from some experts or skillful people to address those concerns and weaknesses. Finally, the organization needs to develop and implement a transformational plan for aligning IT and business strategy for reaching its growth and success. I can contextualize and apply in learning in my organization. I will spend time with the CEO and senior management to introduce them the importance of aligning IT with business strategies. Next based on my learning in this course, I will conduct a comparative study of my organization to benchmark it in terms of IT and identify the areas for improvement. In addition, in consultation with the concerned people and using my learning in this course, I will develop a transformational plan and implement it

The “IT alignment trap” occurs when IT spending is highly aligned with business strategic objectives, but IT is not effective in achieving those goals. IT and business priorities must be tightly linked. This means IT spending must be matched to growth strategies for the organization as a whole. Effective management of IT initiatives occurs when there is shared ownership and governance of IT projects. To avoid the “IT alignment trap”, IT needs to be both highly aligned with overall business strategic objectives and highly effective at helping achieve those goals.

Culture and Employee skills: Deep rooted quality consciousness and team spirit. Highly skilled staff and high morale. Good labor elation with effective policies leading to high level of empowerment.

The IT departments of companies have a lower expectation for budget increases in 2015 (45%) than in 2014 (62%). There is also an increased expectation that their budgets will stay the same (13% more than 2014) and that their budgets will decrease (4% more).

For an effective IT budgeting, IT leaders need to execute viable decision-making ideas that can result into monetary savings in the long run (Heier et al., 2008). Similarly, repurposing of the software positively effects the organization, by saving an amount that would have been spent on a new software purchase, and creating some extra budget that could be invested towards other strategic investments or initiatives (Heier et al., 2008). In terms of the operations cost, even though the repurpose might slightly increase its maintenance cost if the software has already been used for many years, but still by evaluating the whole operational budget for two different functions it still is a cost effective-strategy (Heier et al., 2008). Additionally, it serves as a valuable asset to the organization, in terms of saving both time and money of their IT staff, as they no longer are learning totally new software.

Fiscal responsibility remains an obvious but viable mission pint in considering a new policy. Without monetary restraint, any area or division can become a costly damaging part of an organization that not only merit’s disfavor with management, but destroys morale throughout the company. IT leadership should demonstrate value in all aspects of technology and its integration through all business divisions. If the IT area is seen as another budget drain, it’s overall credibility severely limited.

The IT administration concerns have been changed since 2008. As per Kappelman et al Business Productivity, Business Cost reduction and IT Cost Reduction

Despite the expansion enjoyed by the company, the management anticipates that CS does not have necessary infrastructure to support growth in the next three years. The present communication and information system within the company cannot keep pace with the rapid growth. To address the problem, Board of Director agrees that IT Development Department (ITDD), Roger Clarkson, should be responsible for the three years

Brian Smith, CIO of ModMeters in a different meeting presents to the other executives of the organization on the problems that the IT team is facing with the kind of budget that is allocated to them. The CFO, Stan Abrams always keeps the budget very low on the IT department. Brian also explains that the budget allocated every year is spent on all the Keep The Lights On (KTLO) and Maintenance projects and the scope for new initiatives is very low as the budget is not sufficient for it. Sometime the projects have been taken up because of the audit regulation from the outsiders or competitors. Brian says until now IT projects have been taken up on the basis of ROI but now we need to change the strategy for IT budget allocation which enables them to support the new strategic initiatives. Brian tries to convince the board members and the CFO on the need for increasing the IT budget. He points two things here, first

Each and every aspect in life is getting connected to Information Technology. Starting from a simple home computer to Super computer used by NASA is technologically driven. Therefore, managing IT or IT management has become a very important activity.