Cost cutting is going to happen across the board in a recession, but by aligning networking goals with corporate -- and the CIO's -- strategy, network engineers can reduce expenses while still standing out.
"Networking and IT are business needs," Jay Pultz, a Gartner vice president and distinguished analyst, told his audience yesterday at the Gartner Enterprise Networking and Communications Summit.
In other words, enterprises can't live without these technologies, but there will be pressure to reduce networking costs while simultaneously enabling the business to compete in a worsening economy. What kind of strategy should networking pros facing budget cuts follow?
Network managers should meet with the CIO to determine what the company's technology strategy will be during the economic downturn, since the network will enable whichever strategy the company follows.
Is your company looking to:
Transform? Companies like startups are looking to run rings around their competitors and revolutionize their customer experience, so network agility -- the ability to support a variety of usage models and patterns, to grow and shrink on the fly -- is highly prized.
Grow? Are you looking to seize market share or reach out into new markets? To grow consistently, Pultz said, network service quality is paramount.
Run? If a company is in a stable pattern in a slow-changing industry, sometimes it is enough just to run. These companies are going to focus on the economics of networking: Where can they cut costs, and where can their scale help them reduce overhead?
While many companies won't fit entirely in any one of these scenarios, most will line up at least generally with them; and Pultz said the framework is useful for deciding how to allocate scarce IT resources and plan a lean budget.
Once these priorities are determined, however, the real work begins.
"The tool of choice today is an axe," Pultz said, "not a scalpel." Initiatives that do not directly benefit core strategies or that do not see a short-term return on investment will probably need to be put on hold until less frugal times, and an IT department should be looking to cut its budget by 10% to 20%.
Pultz had some more ideas for networking cost containment in 2009:
- Open up major contracts for negotiation now with telecom, and apply pressure to get better agreements.
- Defer non-critical network initiatives without a short-term payout.
- Pay only for what you need, and don't over-purchase equipment or services.
- Consolidate your networking operations, and use networking to consolidate your communications infrastructure.
- Check over your bills, and look to cut expenses from which you derive no benefit.