Did you really save money Mr CFO ??

The recent downturn had got all the CFO's on the IT managers and CIO's after their neck on opex/capex reduction. As all retailers were struggling in India it was really a tough time for the IT managers and CIO's to act as per expectations of the CFO who were literally hounding them on cost reduction. Now the times are improving but will the decisions and some of the retailers are re-starting their growth plans. Will decisions taken last year come back and haunt the CFO's? Did they really save money by reckless cost cutting?


I remember the decision which I had to take due to behalf of a client CFO to procure cheap POS machines against my recommendation for just a paltry cost difference between the worlds best product (which I negotiated for a very decent discount and SLA) against a lower grade product. The POS machines have now been delivered at the flagship store and have started to show their true colors. They are failing and the vendor is unable to keep up his SLA. Same applies for the I.T Level 1 support staff who were treated with shabby at a client's place. 80% just went away in a span of a month as conditions have suddenly improved and they got good increments taking the support SLA's down drain. Quality of work done with minimum cost and quality have now started affecting the operations as we have had a couple of cases were cheap faulty electrical wiring has damaged POS/Scales due to short circuits in the store! 


How has the cost reduction affected the business? Will these decisions be a hindrance to future growth? Will these hasty decisions really add to the total cost of ownership of IT going forward?


Did Mr CFO really save money for the organizations by recklessly cutting costs or did they just achieve their cost cutting KRA's  for last year ? Lets see how it affects growth performance this year.