IT suppliers – reduce your costs or your out!

The above headline seems to be the message in an article in the latest edition of Computer Weekly.: The article, called “How will suppliers be able to cut IT costs?” starts with the words: “The government has told IT suppliers it wants them to reduce the cost of contracts with government departments.” The paragraph ends with: “But it could be the government that has to change the most.”

Nineteen IT suppliers met the Cabinet Office Minister, Francis Maude to start the process of reducing the cost of contracts.

The article goes on to suggest that ‘red tape’ needs to be addressed and the government must overcome a lack of trust if suppliers are to meet targets without just cutting costs to the bone or stripping service levels.

“The government wants immediate reductions in costs and ongoing cuts” says the article.

Francis Maude said he was challenging major government suppliers to take costs out of contracts. “Some of this will come from margins, but we will invite ideas on how we can structure things differently to reduce complexity and cost.”

There will no doubt be more articles like this as time progresses and for sure, this will impact on many people – anyone involved in IT, project management or procurement plus of course shareholders.

If you are based in the US you also have some ‘issues.’ Shortly before completing this article I came across the headline: “White House to Review High Risk Projects”. This can be found here.

An extract of the Computer Weekly article can be found here.

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4 Responses to IT suppliers – reduce your costs or your out!

  1. Pingback: Twitter Trackbacks for IT suppliers - reduce your costs or your out! | Ron Rosenhead's Project Management Blog [ronrosenhead.co.uk] on Topsy.com

  2. Paul Naybour says:

    This story has only just started. I was with a group of consultant civil engineers this week and they had the same message. It’s time to get the think caps on and offer you customers more for less cost.

  3. Ron says:

    Thanks Paul. A sign of things to come….for us all!

    Ron

  4. I guess, reducing cost may also reflect to the quality of products and services they will be able to give, like in project management , if cost estimation is a failure the whole project follows..

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