The dangers of downsizing : many hidden costs do exist

Organizations that believe downsizing the IS function will result in significant and immediate monetary savings should realize that a variety of costs exist. Some of the direct costs include purchasing the various downsized hardware and software and making severance payments to dismissed employees. Indirect costs include the potential for poor business decisions made on the basis of incomplete data from downsized systems. Organizations should carefully evaluate these costs to determine whether they will indeed outweigh any benefits obtained from downsizing.