How to Downsize IT With Minimal Damage

When an enterprise downsizes, IT is usually required to go along for the ride. For IT leaders, finding ways to maintain essential services with a reduced budget and fewer team members can be a daunting challenge.

The best way to downsize an IT department with minimal damage is taking a strategic approach to optimization, says David Lewis, a partner with global technology research and advisory firm ISG. Don't just focus on the low-hanging fruit, he advises.

Lewis suggests comparing your organization’s cost structure to similar bodies. “Understand the cost levers that exist in various cost categories and build a heat map of optimization opportunities.” He also recommends targeting short-term savings without losing sight of longer-term, bigger ticket items, such as technical debt reduction or application rationalization.

Look at Current Roles and Responsibilities

Rajan Ad, CEO and founder of digital media services provider Magical Media Studio, recommends addressing downsizing both strategically and proactively. “Start by identifying which positions or areas are no longer essential to the company's operations,” he says. Conduct a thorough analysis of your department's roles and responsibilities and assess the team's performance metrics. “This data will help you make informed decisions about which positions to eliminate or consolidate,” Ad notes.

An IT leader tasked with downsizing should also examine current services to identify areas that might be candidates for automation or outsourcing, advises Tom Kirkham, CEO and CISO of cybersecurity firm IronTech Security. “By streamlining processes and leveraging automation, enterprises may be able to reduce their IT department headcount without sacrificing quality of service,” he explains.

Other Approaches to Reducing Expenses

Offering team members telecommuting, job-sharing, or a four-day work week program can also help cut costs while simultaneously increasing engagement and morale, Kirkham says. “Additionally, providing employees with retraining opportunities and generous severance packages can help minimize the disruption caused by downsizing the IT department.”

Task segmentation is yet another option. To reduce expenses, many IT organizations are now opting to offload selected tasks to an external party, such as a vendor, observes Christopher Cain, threat research manager at OpenText Cybersecurity.

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