Citi whacks IT

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.

3 thoughts on “Citi whacks IT

  1. Kendall Brookfeld

    I guess all the talk of lean-and-mean IT budgets after the tech bubble burst is either completely outdated or was never true, at least for some firms.

    And some large companies’ customer-visible websites are still often very buggy, here in 2007. I’ve recently seen astonishing bugs — where contradictory or clearly incorrect numbers are displayed — in the sites for E*TRADE and Blue Cross of California (the largest health insurance provider in the state).

  2. shokk

    Yeah, I guess all those virtual machines will maintain themselves. My guess is that they can *plan* to cut the money, but at some point there will be a cold realization that Skynet is not yet in charge and warm bodies are still required to break fix and plan.

  3. anjanbacchu

    hi there,

    “Yeah, I guess all those virtual machines will maintain themselves”

    there are lots of ways redundancy can be reduced. migrating to VMs will reduce hardware expense, power and cooling power expenses.

    With every change, you will have to look at what you’re losing and whether it’s worth it.

    I’m sure in couple of years, we will all learn

    how CITI benefitted — I hope that they let others know how it went :-)

    Consulting companies and contracting companies are the ones to lose most in these events!



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