Cost control in your IT company is simple

I have tried several methods to control cost in my own company and have been successful to a great extent. It is all about the data you have and what can be derived out of the data meaningfully.

It is seen that in an IT company like in what I am working currently, the cost of salary would be about 55 to 65% of the monthly spend. Therefore it is easy to understand that working more with manpower cost would help. Non performing employee should not be allowed to hang on in the company for long. This will ensure that we have all productive employees and the cost is justified and the damage the underperforming employee will bring to system will also be contained.

Right project and resource management techniques would help take out approximately 20 to 25% more output without spending additional cost.

Decision on hiring a full time resource should be taken only if the job at hand justifies a full time resource and enough work for the person for sufficient time. In absence of the clarity on longevity of the job at hand, taking outsourced staff would be a better deal.

Keeping overhead support staff within control of 5 to 8% is necessary. Customer does not pay for the support staff and there is an optimal point where the support staff starts becoming painful overhead.

On closely watching some of the teams I worked with, I realized that more than 40% of the time team had been spending on reworking and searching. Setting up the right control mechanisms like standard project management practices, using standard coding techniques, reusing components and regular reviews helps move thing faster.

There is no wonder if your team ends up delivering two times the output you have budgeted for provided these improvements are not ignored.

Alok Kumar

Alok Kumar is Managing Partner of SRKay Consulting group, a private equity company, nurturing innovative ventures. Alok also serves on the board of ICCL (Indian Clearing Corporation Limited - A subsidiary of BSE- Bombay Stock Exchange) as an external advisor for technology and information security. Prior to this, Alok had been Managing Director of Sears IT & Management Services India Private Limited (SHI) since its inception in December 2009 and served in the same position till very recently. Having been in senior IT management positions in Fortune 500 companies, Alok has won several national and international awards. Alok is instrumental in planning and setting up SHI and thereafter growing it to a multi-locational thousand-plus people organization. Over the last five years, with his strategic vision, Alok helped SHI grow roots in India, develop and support technology applications and infrastructure across core mainframe, cutting edge e-Commerce and big data technologies. With his unique people-oriented transformational leadership style, Alok turned SHI into one of the most valued investments of Sears, garnering great ROIs, and creating value much beyond cost arbitrage. Under his tutelage, SHI has filed two patents and is recognized widely for its best practices in various areas, the latter, currently featured in Indian Institute of Management (IIM) case studies. SHI also became a CMMI Level 3, PCMM Level 3, and ISO 20000 certified organization. Alok is a widely acclaimed corporate leader in India today. He regularly participates and leads various forums as a keynote speaker and is an author of several books in different genres. Alok has several awards to his credit. He is particularly known in the industry for his people management skills and innovative ideas in improving the productivity of employees through unique people practices. He has been credited with the following industry awards: ¬ Emerging Leader of the Year award 2013 by IndiasGreatest.com ¬ Game Changer CEO of the Year 2013 (SHRM) ¬ CIO 100 - The Bold CIOs - 2008 (Reliance Infosolutions) ¬ CIO - Ones to Watch Award 2008 (Reliance Industries) ¬ Extended Manager Award - CIOL 2004 (Tata Teleservices) As an able leader of SHI, Alok got SHI recognized widely in the industry with the following several awards: ¬ CII Award for HR Best Practices in 2014 ¬ Global Excellence in Outsourcing Award - AIOP (Phoenix 2013) ¬ IT Innovation Award (Design & Engineering) - Computer Society of India 2012 ¬ Golden Company of the Year - Economic Times 2011-12 ¬ 7th Employer Branding Awards - World HRD Congress (Mumbai, India) 2013: • ‘Asia’s Best Employer’ Award • ‘Best HR Strategy’ in line with business • HR Leadership Award • Talent Management Award by Bloomberg TV India ¬ Employer Branding Awards - World HRD Congress (Singapore, Asia) 2013: • 7th rank in ‘Asia’s Best Employer’ award • Award for ‘Best HR Strategy’ in line with the business • HR Leadership Award Other recognitions: Alok had served on the distinguished panel of NASSCOM's GIC (Global In-house Centers) National Council members. The council members play a key role in major initiatives of the industry and include the torch bearers of IT industry as panel members. Books and Papers: Alok is an established author, with three books to his credit. Alok’s third and latest book, a novel, “The Spy from Unaula” is a 2015 publication. A handwriting analysis enthusiast, Alok collaborated with his wife Nandani on the book, “Handwriting Speaks” in 2006. “Value Sourcing – Future of IT Outsourcing” was co-authored with Keith Sherwell (currently CIO, Altice USA) and was released in 2013. Alok also researched and published two whitepapers: a. “Creating next generation captives” talks about the best practices that are helping generate higher value from the IT company captives.

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1 Response

  1. Hello Alok,

    I like your Idea on “Cost control on in IT”. Especially the following paragraph.

    “On closely watching some of the teams I worked with, I realized that more than 40% of the time team had been spending on reworking and searching. Setting up the right control mechanisms like standard project management practices, using standard coding techniques, reusing components and regular reviews helps move thing faster”

    Every one, in the organization do talk about this many a good number of time, but when it come to implementation, they prefer deliverables rather than documentations. I understand that deliverables are import, but at the same time we should allocate enough time for the resources to do the documentations. That helps the organization even when the resource is not around, that way can make use of that 40% time to find the right documentation to go head a bit faster….

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