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In these lean times, an IT director is a worried man.

A friendly headhunter told me recently that the mean time between failure of a City IT director has dropped to about two years. A survival guide for IT directors is a lot harder to put together than a self-help manual for the people working for him.

The IT market is the worst it has ever been, and is colder at the top. The e-Commerce initiatives are still bleeding money, and the view of IT as a bottomless pit for cash is stronger every day. Meanwhile, the users want wireless network access at home as well as at work; security requirements are impossible to assess, and it's all your fault.

How can you defend yourself ?

MS comes to the rescue here with XP. Avoid it. It's easy to justify this: upgrading a network of PCs to XP is going to cost you at least 500 quid a head even before you pay Windows tax. The security features are of little use to a grown up firm, the performance lower, and I've yet to hear an objective account where it is more reliable in large deployments. The licencing mess will also take some time to stabilise. True, it is supposed to make life easier for the users of wireless notebooks, especially when they go home ... but this is something that needs to be proved by some other guinea-pig.

Thus you can look at XP, and say boldly to the board "I've looked at XP, and decided we can save X thousand by forgoing this upgrade." Best to say this in more than one meeting for best effect. With little effort you have ostentatiously cut costs, at no risk to the business.

Next for the knife are outsourcing firms.

IBM recently cut the rates it pays to contractors citing market conditions. That means the contractors at your site. You thought they were really IBM staff ? Oh dear. Apart from the hassle if a key specialist decides to walk, you now have ammunition to ask them to share your pain.

What about your other suppliers? They've been getting business when things were good, and have you been ensuring that they've kept their costs competitive ? Really ? Honest: I won't tell anyone if you hadn't checked for the last year. Get them in and put the ball firmly in their court. Say you need to cut X per cent off spending. Best to start with your least favourite vendors, as you want a message of firmness to get around. It goes without saying that success here deserves a wider audience than most actions within your department.

Be armed with how much you spent last year. The obvious reason for this is to talk sensibly with your account manager. The more subtle and important reason is that you have to ask the Finance Director for the info. He may whinge about his staff being stretched, but you drive home the point that you are going in hard to save costs, and need his support. Thus you position yourself nearer to the solution than the problem in his eyes.

Staff is a huge chunk of spending, and badly done cuts drive productivity down through lower morale; and of course you may lose the people you want to keep ,if they think they're next. Tip: Telling people they are safe isn't believed any more, may even make them more paranoid.

What about fractional people? If you employ a serious Java coder, and a Sybase DBA, which do you cut ? I have seen databases done by C++ people. Its not nice, and whoever does the others job will have to take over a work in progress.

Why not do flexitime properly ?

A lot of ITers are "cash rich-time poor". Offer them the chance to avoid Mondays for the next 6 months - four days a week, for 80% of their salary. Spin it the right way and you will increase their motivation, whilst keeping your teams together for the next big rush. The 20% off staff costs won't hurt either.

If you're recruiting, why use agencies? A competent City C++ developer is about £60 K, and will cost you £ 8-12K in agency fees. Why not pay your staff to do it ? Don't listen to HR when they talk about their £150 a head 'bounty'. Do it properly, pay £1000-2000 if they find someone. At a time of pathetic bonuses, this level of incentive will prompt them to check out their colleagues from their last employer.

The quality will go up as well. With the best will in the world, an agent can't tell the difference between a good and bad Oracle techie, but someone who does it for a living at your site isn't going to bring in an embarrassment, and will have the experience of the candidate to know. . The £5-10K per head hired is worth the effort, and morale will improve amazingly among the beneficiaries.

Contractors may also be fractional. I've got some of the freelancers who used to work for me on a small retainer. They get a guaranteed revenue stream, and I can get them in PDQ if I have a big problem.

Now is the time to be seen rather more. Visible productivity is critical, and IT departmental meetings don't count. Do something like spend a spell on the help desk.> You get to see reality there (as opposed to service level reports), and, used as PR to the people who are looking for a nice quick way of cutting that £150K of the budget which you represent, it can make you seem a lot less vulnerable.