How to make the most of your IT budget, part 2

Nobody knows better than IT executives from non-profit organizations what it's like to be challenged for resources. The IT leaders we interviewed had more useful advice for deploying technology and working with service providers. What follows are some additional tips to try.

7. Standardize software.

In 2000, the Smithsonian had 28 different financial systems, including a 14-year-old version of Walker Financials that was no longer supported by the manufacturer. CIO Dennis Shaw moved the entire organization to PeopleSoft Financials in a migration that took one year to complete.

"This was a survival measure," Shaw says. "I had calculated that in the aggregate we were spending US$9 million a year for financial systems. Now we're spending less than that. But my focus wasn't just on saving money. It was on getting financial systems that worked."

Shaw says the Smithsonian has benefited by having integrated financial systems for managing grants and major donations. As PeopleSoft releases new software modules, it is easier and less expensive to implement them across the Smithsonian now that the organization uses a common financial platform.

"Everyone should be consolidated on one financial package," Shaw says. "And you don't need multiple HR systems, either.''

8. Award multiple IT support contracts.

To save on its IT support costs, the Smithsonian recently awarded 10-year contracts to five vendors. With this approach, the Smithsonian hopes to benefit from reduced costs for help-desk support, desktop deployment, cabling and administration for databases, LANs and WANs.

"The rates are a lot better than we had before," Shaw says. "The idea is to have ongoing competition among fewer vendors. That's the one thing that will drive down the contractor costs."

In the past, the Smithsonian ran a competitive procurement but selected only one contractor. The multi-vendor approach allows the Smithsonian to benefit from ongoing, managed competition.

"We had 250 responses to our RFP," Shaw says, pointing out that contractors were eager to win a contract with the Smithsonian because it is a household name. "The rates we are seeing are 20% cheaper than we saw before."

9. Emphasize strategic initiatives.

When Jim Thie puts together the annual IT budget for Habitat for Humanity, the CIO breaks it into three categories: mandatory, strategic and discretionary.

Mandatory items are required to keep the doors of the organization open, including the cost of running existing computer facilities as well as any contractual obligations.

Strategic initiatives add top-line value to the organization or reduce expenses.

Discretionary items such as adding new fields to databases or preparing new reports can be delayed if necessary.

Thie has been successful at keeping his IT budget intact throughout the year with this approach.

"My focus is mainly on driving strategic initiatives," Thie says. "In that way, I'm not that different than your typical for-profit CIO."

Thie says this approach has helped him gain backing from Habitat for Humanity's top executives for his IT initiatives. For example, his IT budget of US$9 million is up US$1 million from last year.

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