As the economy continues to slide and pressure mounts for all companies to cut their expenses, pressure on IT mounts accordingly (and appropriately). In the spirit of constructive action, we'll begin a series of postings here on how IT can save money. Some ideas will be obvious to some of you, and some will require some thought and broad vision. Nevertheless, I invite comments and ideas.

In this post we offer five ideas on how to save costs in IT Projects.

1. Get your projects on budget. The best measure of budget for IT projects is "earned value", which is what you should have spent for what you achieved, based on your project plan. You could be spending less than you expected, but if you're achieving much less than expected you're running over budget! Essentailly, measure your budget against your milestones, not time.
   
   For those projects that are behind in earned value, get new projections and force tighter fiscal management. Be skeptical. If the project is no longer worth the money cancel it. The financial benefit: Stop the bleeding.
    
2. Get your projects on schedule. For those that are behind schedule (what was done vs. what should have been done), get new projections, and be skeptical of statements such as "we'll make up the time in later stages". Past performance is a good predictor of the future.
   
   Most improtant, decide whether the delay has caused the business to miss an opportunity. If so, cancel the project or recast it into something useful.
   
   The financial benefit: if the revenue gains or cost savings won’t come soon enough, stop investing.
    
3. Slow the pace of projects. If you MUST reduce expense, and you can tolerate a delay in the profitability a given project will deliver, slow the delivery rate by thinning your project resources or slowing down your vendor payments. (“Thinning resources” does not mean "layoff", as we'll discuss in another post.) Replan so you can measure schedule performace accurately (#2 above).
   
   The financial benefit: Deferring costs.
    
4. Stop wandering. If a project doesn’t have a clear charter with measurable results, or worse, a charter that wanders, fix it or kill it. What's in the charter? Objectives, scope, deliverables, and target user community.
   
   Requirements creep (often called "scope creep") is another failure in this category. Experience suggests  requirements grow as time passes, and this often causes schedule failures and budget failures. The worst such projects never deliver anything because they're always expanding what they have to deliver. Requirements management is one of the fundamental key process areas in a number of project maturity models.
   
   The financial benefit: Stop throwing good money after bad.
    
5. Kill misaligned projects. Remember that strategic plan? Let’s assume it’s still valid. If the project isn’t aligned with it, stop wasting your money. If the strategic plan is out of date, check with the business community to assure that the project still has business value.
   
   The financial benefit: There’s no apparent business benefit, so why spend the money?
    

Our next post will be about cost savings through better vendor management.

As always, we invite your comments.