April 14, 2009

If headquarters cuts costs, what's your obligation to "do your part"?

Organizations that shift costs, then complain when the shifted costs don't just go away, are blaming the victim. It doesn't matter: Their rationalization doesn't affect the underlying core issue, which is not enough money.

Dear Bob ...

What do you think of a company where headquarters, in order to cut costs, reduces or eliminates some essential core services? And then when those of us out in the field have to take care of them ourselves and try to build them into the budget, get complaints, namely, "We did our part to cut costs. Now you have to do yours."

Seems to me the company's decision-makers aren't being fair about this. What can I do?

- On the wrong side of downhill


Dear Downhill ...

Welcome to what most mayors throughout the United States are dealing with right now -- cost-shifting plus blamestorming. Fun, ain't it?

What can you do? In the end, there's only one business answer and one emotional answer. The business answer: Find a way to live within your new budget. The emotional answer: Shrug it off.

Here's what's going on: There isn't enough money. Or if there is enough money (doubtful at the moment, but it's happened this way in flusher times), whoever figures out what will impress Wall Street figures there still isn't enough profit, even though there really is.

Regardless, the company's decision-makers have decided costs are too high. Headquarters staff might not have any idea of how the company actually makes its profit, but they have the political advantage of being close to the decision-makers, so they get a better chance to tell their story. They avoid real cost-cutting by instead engaging in cost-shifting, but when you make decisions based on the view from 50,000 feet, you can't tell the difference. And so you approve the HQ plan.

Or maybe the decison-makers can tell the difference. It doesn't matter, because the old canard about humans only using 10 percent of their mental capacity isn't true. The real story is that we use 100 percent: 10 percent to think and 90 percent to rationalize.

It doesn't matter: They've made the decision, which means it's too late to argue. Which leaves you having to pick up the slack, only you're told to do so by spending less rather than more.

The best you can do is to create a spreadsheet along the lines of the one I described in "Should a CIO take a cut to part-time status," (Advice Line, 4/6/2009):

additional resources
White Paper - How to Improve Delivery of Advanced Web Applications

White Paper

Virtual Workforce: The Key to Expanding The Business While Cutting Costs

Get the independent advice and expertise you need to support a virtual workforce.

Go inside:
The three-step approach to making a virtual workforce a reality.
The four flavors of client virtualization technologies.
The three key initiatives that solve IT challenges.
Download now »
White Paper: Successfully Secure Your Wireless LAN With Wi-Fi firewalls.

White Paper

Addressing Linux Threats Leveraging Fewer Resources

The increase in Linux popularity has increased the frequency and sophistication of malware attacks. Read this 2 page white paper now to learn how you can protect your Linux environment with real-time protection that is certified by all major Linux vendors.

Download now »
White Paper - The 2009 Handbook of Application Delivery

White Paper

The 2009 Handbook of Application Delivery

Ensuring acceptable application delivery will become even more difficult over the next few years. As a result, IT organizations need to ensure that the approach that they take to resolving the current application delivery challenges can scale to support the emerging challenges. This handbook elaborates on the key tasks associated with planning, optimization, management and control and provides decision criteria to help IT organizations choose appropriate solutions.

Download now »
White Paper - Is Your Backup System Outdated?

White Paper

Mid-range Storage Considerations

A common misconception is that mid-range storage requirements are dramatically different than that of a larger enterprise. Mid-range storage users may require less capacity, but they have similar functionality and management requirements. This ESG paper examines mid-range storage needs and reviews a new solution that adjusts size while retaining value, performance and functionality.

Download now »

Today's Headlines: First Look Newsletter

Find out what will be news for the day, with our first-thing-in-the-morning briefing.

©1994-2010 Infoworld, Inc.