Where to Cut IT, Where to Spend
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Smart CIOs come up with smart ways to handle budget cuts resulting from the recession. |
YRC Worldwide CIO Michael Rapken and his team are slashing about 10 percent from the $100 million-plus 2008 IT budget of the operator of Yellow and Roadway trucking lines because of pressures resulting from soaring fuel costs.
How did YRC IT team do it? YRC now replaces employees' PCs every four years rather than three. Rapken and associates also are delaying a payroll-software upgrade, cutting the use of outsourced workers, leaving vacant some positions and laying off a handful of workers, according to article A Balancing Act for Spending, published Tuesday in The Wall Street Journal [subscription required].
Meanwhile, the article says, YRC is spending less than $300,000 to tweak software that better automates how the company moves and tracks freight. That should improve worker productivity, further lowering costs. "The hope in our industry is that we're pretty close to the bottom," Rapken told the newspaper, "but if it were to get worse, we'll come back to the table" and adjust spending plans.
Alternative technologies that help CIOs rein in costs are performing well, evidence of a shift on how enterprises improve computing while saving money. The Journal article notes that sales of virtualization technology and cloud computing are on the rise, citing virtualization provider VMware's 69 percent rise in revenue as well as software-as-a-service provider NetSuite's 47 percent sales increase in the past year.
Expect these trends to continue even when the economy recovers.
