Managing IT Budgets During Tough Economic Times Means More Then Just Cost Cutting

With the economic downturn in full swing, I’ve read plenty of articles in recent weeks touting open source software as a great way to slash IT costs. Here at SugarCRM, we’ve had a number of media requests in recent weeks with journalists who’d like to speak with us about such topics.

And while these articles certainly underline a key advantage of adopting open source during tough times, I think many are missing another key advantage. A recent article I read in The McKinsey Quarterly made some great points about looking to leverage IT to improve efficiencies and generate additional revenue, as opposed to simply cutting its budget.

Although IT often represents a small fraction of a company’s cost base, cutting its budget has almost become the de facto standard that executives turn to. Yet IT investments can deliver more value to a company’s top and bottom lines by creating new efficiencies and increasing revenues than any savings gained from traditional IT costs cutting. Open source software, and certainly CRM applications, are perfectly situated to capitalize on these ideas.

Just this week I spoke with the CTO whose firm is using SugarCRM as a PRM solution to manage its partnership network with thousands of smaller accounting firms. Sugar’s open source architecture has allowed them to automate and support business processes, which has proved critical in recent months as the company looks to cut corners and save time and money down the stretch.

So rather then simply looking to adopt open source to cut the IT budget, businesses should also be considering open source as the vehicle by which to take advantage of unseen opportunities – such as improving the customer experience, reducing revenue leakage, saving time and money, and improving operating leverage.