A recently published study, "Savings for IT in Tough Times,"
by international strategy consultants Booz & Company, suggests four ways to cut IT costs during the economic slump: First, reduce your service levels and follow through with only the most crucial IT projects. Second, beware of new technology: if it doesn't save you money, don't deploy it. And finally, restructure your IT organization to support changes in business operations.

To our minds, this advice is only right in part. We've been advising our customers to focus their IT cost-cutting on the areas where it makes sense -- on the processes and users that warrant it. Booz & Company suggests lowering service levels for certain applications. Experience shows that only 30 percent of apps require around-the-clock availability.

More specifically, Booz & Company consultants want IT and other department heads to "put the facts and figures on the table"; they believe that if decision-makers would discuss issues openly and constructively, businesses could slash IT support spending by up to 20 percent. From our point-of-view this is too vague.

Before taking action, make sure decisions are not just based on figures, but the right figures. And the aim should be scalable user support. For companies using SAP apps, this means the following:

1st aspect: putting user requirements in perspective

First, define how much support is needed.  You need to know how many users regularly work in the production system and the volume of work they do. If your sales are declining sharply, for example due to seasonal fluctuations, activities can be limited to a handful of experienced employees, reducing the need for support.

Another important factor is the degree of automation -- the proportion of documents processed via the IT system without manual intervention, rather than in dialog mode. Our RBE Situation Analysis enables you to quantify number of users, volume of work, and degree of automation. Results are summarized in the productivity matrix, which serves as a decision-making tool for determining the scope of support.

2nd aspect: lower revenues do not mean fewer processes

Falling sales do not necessarily mean fewer processes or functions. However, the volume and pattern of work generally changes. This provides an opportunity to fine-tune processes. Time freed up by lower workload can be put to use identifying and eliminating weaknesses and inefficiencies.

It's not sales in the monetary sense that impacts time and resource demands on IT support; it's parameters such as the total number of documents and the number of individual items on each document. So, falling product sales do not necessarily result in less operational effort. In fact, reducing support can cause delays in order execution. Businesses should therefore only reduce support service levels if they have fewer order items to process.

We recommend keeping service levels constant in critical areas such as sales order processing and invoicing, or even increasing them to accelerate certain processes. In non-core areas like purchasing or accounting, reducing service levels temporarily is a good way to cut costs. Our RBE Process Pipeline Analysis gives you the transparency you need to do this. It pinpoints the scenarios where key workload-related parameters change; and it helps you identify appropriate areas and windows of opportunity for streamlining and improving processes.

Deal with the short term but keep an eye on the long term

Companies aiming to save 20 percent on IT support in the short term need key metrics on user productivity and process speed. Only then can they scale down service levels in the appropriate places without incurring long-term damage. Because one thing is certain: Even in troubled times, there is a need to keep sight of the bigger picture and consider the long-term consequences of decisions.