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Does management understand the costs of cutting IT’s budget?

Olav Lydersen and Knut Einar Grønberg  

12 September 2014 


To read the Norwegian article in full, click here.

PA Consulting Group’s Olav Lydersen and Knut Einar Grønberg, IT experts, have had a byline article published in commenting on companies’ approaches to cutting their IT department’s budget.

In the article, Olav and Knut Einar explain that most companies look upon IT as an unnecessary expense, making the everyday life for CIOs hard: “With 2015 budget  discussions underway, it is very easy for a CEO to tell the CIO that 10-20% of costs need to be cut from their IT budget. However, what they’re forgetting is that most employees in the business are very dependent on IT.”

Olav and Knut Einar argue that this lack of foresight is having an adverse effect on Norwegian companies, with partners, customers and suppliers being negatively impacted.

The article stresses how the CEO and CFO need to realise the consequences of a cut in IT costs and that any management team should have the skills to see the overall picture: “Once they do realise this, they can take action. Often, this requires a major reorganisation of systems to meet the needs of IT and maximise its potential.

“The point of this reorganisation is to ensure IT receives strong support from the business in the coming years. A grocery chain, for example, which changes how crates are moved around the business to cut IT costs will soon find that customers are dissatisfied with waiting time and will start to use another company – resulting in a big loss of money.”

Olav Lydersen and Knut Einar Grønberg are IT experts at PA Consulting Group


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