October 22, 2008 - Cost Containment - #68

Mike's Pep Talk:

"In our personal ambitions we are individualists. But in our seeking for economic and political progress as a nation, we all go up or else all go down as one people. "
-- Franklin D. Roosevelt

I got a question the other day that made me take a step back and really think. It was an innocent enough question, mostly about how to protect the security budget. Given the economic malaise spreading around the world, it's a safe assumption that budgets across the board are going to be cut.

We all know that even in the best of times, security doesn't get enough investment to really "protect" everything that is important. We are always robbing Peter to pay Paul and hoping that we don't get nailed taking a necessary short cut. If the funding spigot turns off for everything, what's a security professional to do?

Basically, we need to remember that we are team players. That means we've got to tighten our belts just like everyone else. Yes, that's right. It's not about fighting like hell to protect OUR budget. It's about figuring out what's the best path for our company. As FDR says, "we all go up or else all go down as one people."

The most important two words for the remainder of 2008 and through most of 2009 is COST CONTAINMENT. That's right, any projects that we try to push through better be focused on how it saves the company money. It's all good and well to think about growth and protecting all of those new systems that are going in, but it's not going to happen.

So take a look at the following buckets and see if/how you can streamline the operation and remove some costs.

• People - It's going to be hard, but there will be reductions in staff. Pretty much everywhere. So look at how you can automate certain processes to eliminate the need to add people. Maybe look into a compliance automation/reporting engine to facilitate preparing for those audits, that will continue to go on. As a manager, you'll also need to figure out how you can do without some hands on deck.
  
  
• CapEx - That new campus build-out? Not so much. It's going to be very hard to get capital budget with out a very clear payoff from a cost reduction standpoint. So if you can show how you reduce expenses (maybe people or allow your people to do a lot more), then you have a chance. If you can't build that case for any specific project that requires capital - don't waste your time. It will be rejected at the senior level. Of course, smart companies invest during a downturn. But most of us don't work for smart companies, so scrutinize your CapEx plans and figure out how you can spin each within a COST CONTAINMENT context.
  
  
• OpEx - I figure it's going to be a banner year for outsourcers and service providers. In the short run, looking at service to do some of the operational responsibilities can definitely work. In the long run, it's probably an economic wash. But the fact remains that if you don't get through the short run - there is no long run. If someone else can do it cheaper NOW, and maybe allow you to trade some CapEx for OpEx, it's a decent trade-off to consider.
  

Remember, I'm not a Chicken Little type of guy. But I am overly Pragmatic. Maybe you're senior team will decide now is the time to invest and take market share. That's awesome. But we can't guarantee that, so we have to plan for as many contingencies as we can. Whatever your plans and projects were slated for early 2009, go back and revisit them. Continue to weigh them relative to the stuff that we know is important (discovered in Step 1) and see how you can make things more efficient.

We all have to pitch in. Even security.

Photo credit: Roadsidepictures