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Ask Slashdot: IT Spending In Engineering?
An anonymous reader writes "I work in the engineering division at a large organization, about 2000 people total and about 900 in the engineering division. As I'm sure many institutions have been faced with recently, we are dealing with reduced budgets. We have a new director who has determined that the engineering division spends too much on 'IT' and has given us a goal of reducing IT spending by 50%. We currently spend about 8% of the total engineering budget on IT related purchases. About 10% of that (i.e. 0.8% of the total budget) is spent on what I consider traditional IT such as email, office automation software, etc.. The rest goes towards engineering related IT such as clusters for large computations, workstations for processing, better networks to handle the large data sets generated, data collection systems for testing facilities, etc.. My gut says that 8% is low compared to other engineering institutions. What do other engineering organizations spend on IT (traditional and engineering)? What strategy would you use to convince your management that 8% spending on IT is already very efficient?"
Put together a presentation to show your new director how you spend your monies - judging by your estimates, it's safe to say that you aren't quite sure how your department spends it's money. Put it in graphs, in a spreadsheet, make a chart, whatever you need to in order for your new director to understand where the budget goes. But, if you don't know yourself, you can't defend your stance. Itemize it and break it down, learn where all that $$$$ goes so you can prove that it goes somewhere worthwhile - if it doesn't, propose to cut it, and make changes where you can. You don't have to hit the 50% if you can convince him/her that 1) you aren't wasting money and 2) you can find places to help save money.
Like a good resume: don't just say what you do or how you do it, but explain why and how it helps the company. "We use these clusters for the larger computations" vs "We use these clusters for larger computations, which save us 30% on time and help boost productivity compared to when we didn't have them" yadda yadda.
I think I good approach would be to identify and present options to management for reducing that 8% down to 4%. Done honestly, recommending eliminating waste and increasing productivity of higher-priority services, and recommending the elimination of lower priority services altogether, this will give management an understanding of the cost to the organization of reducing the IT budget as requested. It is then up to management to decide whether they want to proceed.
Approaches that involve trying to tell management that they are wrong, or stupid, or don't know what they are doing aren't likely to go over well with management unless you can identify some factor that management isn't considering (yet). Unless one is in management, its not one's job to make those decisions. It is one's job to provide information to management so that they can make informed decisions.
seriously, just start labeling your clusters and CAD sw purchases and such as plain engineering costs and not IT.
start only counting the generic information technology expenses as IT - email and word processing...
the percentages don't really compare between companies that well - if you were to compare against a firm that doesn't need clusters for engineering calculations for example...
of course the "right" thing to do would be to get the director to magically understand that you have plenty of engineering costs bundled up with the it budget.
world was created 5 seconds before this post as it is.
Show what you'd lose at a 50% cut. Show him the things that they want to have, that would go away if they cut that much. Often people fail to appreciate what a budget is spent on and if it gets explained what they'll have to trade off they'll be more accommodating.
We may have to do just that where I work. The Dean has been fiddling with the budget again (he's really, really bad at budgeting) and has approved about 33% of our capital budget. He says he'll see if there's more money once the FY starts. Well if not, we are just going to have to make it clear what they don't get to have. Toner will be a big one, we spend almost a third of the budget on that because every professor just HAS to have their own personal printer (this isn't something we get to say no to). Well, those purchases will have to stop, departmental toner purchases only, and then only for academics and business needs. We'll identify the computer labs that are running Windows XP that cannot be upgraded to 7/8 that will need to be shut down next year when updates stop. There will be no new purchases of desktops for anyone unless their computer is just non-functional, no refresh. Etc, etc.
At that point, he'll likely decide that more budget is needed, and move money around (I haven't looked, but my suspicion is he's giving the advertising group more they are a black hole that always wants more). If not, we'll keep going on what we have, and services will be cut because there won't be the funds for it.
It can be very effective to not only show people what you give them, but what you won't be able to give them. A 50% cut is huge, that isn't the kind of thing where you "just make do with a little less" or "cut some minor things" that is where major services have to be cut out. Show him what those are. It is easy to say "I want a 50% cut," when you just look at the money side. When you see what you are going to lose, then it is not so easy.
Four words (which should be printed in blold letters, etc.) come to mind about similar situations
- CompuServe
- Lucent Bell Labs
While these were not IT spending per-say, in both cases, upper level management had their own inept vision of reality and agendas. The lower levels tried to get management to understand, management refused to listen, and the rest as they say is history. Sadly, folks at the upper levels of both of these were not entirely a bunch of idiots with sales, marketing, MBA or accounting folks. In the case of CompuServe, we were clearly tech heavy all the way to the top at the time. We just had management who had their own vision/plans, and could not be convinced of the fact that was was being done was wrong. In the other case, I don't remember how many of the upper level folks came from the more technical backgrounds, and how many were from backgrounds which were more in tune with the typical "business suit" mentality. But communications became more unidirectional, incorrect decisions were made, and these companies were gobbled up while many tech folks either left between the mind set in the work environment, or were later tossed overboard in management's attempts to lighten the load to keep from sinking (you don't throw those who are working on bailing out the ship overboard while you are sinking and expect to not sink).
At this point, the best course of action is to attempt to work your way up the ladder, convincing them with how your IT costs relate directly to making your company money. You don't say what sort of engineering firm, but tying those costs to directly to modeling stress/loads in an architecture engineering firm, the SQA of a software firm, etc... and then looking at options such continuing to use 3yr old (or what ever the figure is) computational systems, and tying the costs of doing so to what your firm does, listing all the pros/cons, and then presenting it up the ladder while addressing the issues raised at each level... While it does not guarantee success, but this is the way you win a battle like this. Lots of details, hard numbers, pros/cons, and facts. Periodically, each of you will be faced with making your own personal evaluations of stay/leave, but such is life. If you are lucky, you will either make it through the storm, or have a way off the ship which keeps you from swimming unexpectedly. If not, you just hope you can swim to shore or to be able to catch hold of a rope dangling off another ship. But regardless, such is life... not all ships can avoid the heavy weather, and you just hope that the ones you are on do not go down with you stuck onboard (and that those at the wheel are smart enough to take the advice of folks like you when you spot a storm off in the distance, or notice that the wind is coming at you from the wrong direction).
Good luck and may you never be faced with being on a ship where the captain refuses to point the bow off course as required by the weather you are in, and instead only listens to a navigator who continues to point you towards your next port (or worse, having to report through said navigator).
Helping build UN*X and the Internet since 1981.