Cost cutting
Tesco has announced it will be cutting costs from its IT budget to save money. The announcement that Tesco plans to reduce its IT spend comes after the retailer reduced its profit forecast for 2014/15 from £2.8bn to £2.4bn. The retailer said it was continuing to face a number of uncertainties and consequently the board had revised its outlook for the year. "The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group," said Tesco's trading statement. Trading profit for the six months to 23 August 2014 is now expected to be in the region of £1.1bn.

Question:
IT services: For many IT service department, the focus is on cost cutting when organisational cuts bite. This is particularly the case in public sector organisations. But also in the private sector. But how do you cut costs? What are the strategies? What should you not cut? How can suppliers help or hinder? And what are the potential risks in rationing and cutting IT services. Using appropriate examples, discuss how you would cut an IT service budget and what effect such cuts might have on IT service quality.