I read a very interesting article yesterday on Information Week, which looks into IT spend amidst these uncertain economic times. It had a few really interesting take outs. The CIO of H.B. Fuller said "it made me go down the hall to talk to the CFO." which really highlights how key the relationship is between the CIO and CFO…they need to work together to react to outside pressures and make sure they steer the business ship in another direction if needs be.
The article pulled out 2 different responses to IT in this climate:
1) “Mother May I?”
The CTO of a capital insurance company spoke about how they have IT projects budgeted but they had to go to the captain to ask permission to spend it
2) The CIO Imperative Triangle
CIO of Daimler financial services uses a triangle with three imperatives at each point when discussing IT strategy with fellow executives:
a) Optimise IT - areas to cut
b) Build IT - projects to spend more on to give the company an edge
c) Empower IT - training programs he's staunchly defending to build skills and keep up IT morale
The article then moves onto some key areas of advice from speaking to senior IT folk:
- Have a playbook.
Emerson Electric's business planning includes creating "playbooks" that anticipate changing events, and IT follows a similar process. CIO Steve Hassell says the key is a "balanced portfolio of projects" prioritized by a variety of factors--cost, resources, technology, time frame, risk--so managers can see their choices as business conditions change.
- Not the same old drill.
Three to five years ago, options such as cloud computing and software as a service didn't exist, says Shaklee CIO Ken Harris. But they take time to put in place. Which is why Harris' IT team is evaluating them now, in case a tougher economic climate forces spending cuts and new approaches. "If and when things tighten, it will likely happen quickly," he says.
- Rogues are reality.
At Lauth, Ton knows his smaller IT team can't respond as fast as he'd like, so business units may start rogue projects outside IT. "Some of that you might have to 'allow,' to let the business go forward, but you don't want it to run rampant," he says.
Spectrum Laboratory Network, a medical lab group, has been growing 20% or more annually for years. But seeing a slight downturn in physician office visits, CIO David Moore is edging back some capital spending, pushing into next year upgrades to some 4-year-old servers. Emerson is continuing long-term strategic projects, including a global data center consolidation, but it's "biasing" its new-project selection over the next few quarters toward shorter-duration, lower-risk projects so the company can respond quickly to economic changes, Hassell says.
- Honestly assess the company's attitude toward IT.
Is IT a competitive advantage, where spending can help with business problems related to tightening credit and cash flow? Carl Weddle, IT director at Quality Trailer Products, knows the company sees IT mostly as a cost to be contained in a slowdown, so he gets why his team is being pushed to finish projects without additional funding, and why no new hires are likely. "It is hunker-down time," he says
The last piece of advice about the attitude towards IT is something we hear a lot about. Is IT a cost centre or a strategic enabler to business success? Does the economic situation mean that achieving the latter is impossible? The article doesn’t think so:
Closer collaboration has been the megatrend of business technology this decade--embedding IT into the fabric of business processes, and forever erasing the line between "IT and the business." Leaders can't let this economic slowdown, whether it proves mild or fierce, set back that progress.