In yet another sign of the vast amount of waste inherent in big-company IT operations, Citigroup announced this morning that the continued rationalization of its IT assets and workforce will be a cornerstone of its effort to cut $4.6 billion from its spending over the next three years. The company will, it said:
Continue to rationalize operational spending on technology. Simplification and standardization of Citi’s information technology platform will be critical to increase efficiency and drive lower costs as well as decrease time to market. Examples of this are: consolidation of data centers; improved capacity utilization of technical assets and optimizing global voice and data networks; standardizing how the company develops, deploys and runs applications; and maximizing value by limiting the number of software vendors to operate at scale.
When viewed in light of similar efforts by other corporate giants – Hewlett-Packard, for instance, is in the midst of an IT rationalization program expected to cut a billion dollars (a billion dollars!) from its IT budget – Citi’s announcement will up the pressure on other large companies to take a hard look at their IT spending and take advantage of new opportunities to do more with less. In the short run, the rationalization wave could be good news for IT vendors – at least some of them – as it will involve investing in the modernization of IT plants and equipment. But in the longer run, the trend at the top tier of the enterprise market is clear: IT spending is going down.