Perspectives & Strategy

Smart thinking is always important, especially so in tough times. Tough times are also known for bringing the best or the worst out of people. Part 1 of this article can be found here.

Whilst the continuing recession continues to bite According to Georgia Woods, VP of Application Management at the Bank of Montreal (quotes all come from “Smart Thinking for Tough Times” by David Carey, Editor of CIO Canada, I do of course add my own comments) “It is tempting to make short term tactical reductions but these expenses show up in your run-rate the following year”. She also states “You have to start making different business choices that result in sustained multi-year reductions”.

I wholeheartedly agree, but would love to hear your opinions on this (feel free to add comments). It is not simply the case of flipping off the switch. You really do have to understand the corporate goals and thinking and how this drives your departmental costs. I have always believed that generally there is no such thing as a pure IT deployment. The possible exception here are deployments that improve the management of our IT landscape, e.g. virtualization. But even here there are ultimately business efficiencies to be gained. Because there is no pure IT deployment there should be no IT project budget – no this is not heresy – at the end of the day all IT solutions are about business improvement and the business must be a partner in the projects to guarantee success.

Understanding the source of our costs is important for any spending we make. Growth in business data volumes continues irrespective of the economy – here many industrial sectors have to guarantee data retention as a statutory commitment, so the only way to stop data growth is by smarter use of storage options.

In respect of capital availability for IT projects Andrew Dillane of Ranstad Canada makes the point that “we review our portfolios with more scrutiny than ever before”. Capital spending has not been frozen, although in some of the corporations I have spoken to in the last year they have been pretty close.

Susan Doniz of Procter and Gamble says “her focus remains on [providing greater business] value. Of course this can mean managing costs down”. In my view the IT Management team has a tougher time looking at the whole business model than at any time in the last 30 years. The old adage that “IT tends to be more resilient in a downturn” is simply not the case in the current recession.

What I have observed is that there is a change in the relationships between the corporate leadership and what is expected from IT. This is the reason there are so many CIO’s worldwide pounding the street in search of new jobs. Corporations expect their CIO to contribute to improving business results. Yet many leaders in IT have come from the operational side and have not fully grasped how to make such a contribution. IT is not about simply ‘keeping the lights on’. Sure we have to keep the systems functioning 24*7 but this is only the starting point. IT has to provide benefits in other areas.

ITs real contribution, as I have stated previously, needs to be focused in the area of contributing to the improvement of business results. Are IT leaders spending enough time focusing on the areas that deliver the best value to the overall corporation? Whilst I include here an ability to improve corporate collaboration; leveraging the knowledge within the corporation and its partners to a greater extent than ever before and the ability to intervene in what is being said about our corporation, brands, and products; at the and of the day it is the availability of real business intelligence that will enable a greater business understanding and drive improved results.

The focus of the CIO is a complex one as they do have to be forward looking and thinking about how to apply all manner of technologies to the corporation, yet be prepared for deploying a cost effective solution when the business is ready deploy new solutions.