The role of the IT in this era of turbulence

By Sébastien Wiertz, November 23, 2008

 

We are facing today an economic  downturn in the global economy, this slowdown will force CEO’s to rethink their strategies and some of them will be then tempted to reduce the IT budget. IT has always been considered as a necessary cost inside companies but few have really seen the secret weapon it turn out to  be in this era of turbulence.

Why IT can help to recession-proof a company ?

A recession is not only about cost cutting and it’s a perfect time to review all the business processes that were never reviewed during better times.  Innovation will be crucial in order for companies to emerge when the crisis will be over and fight the remaining competitors on the market. Reducing  hidden costs will also be part of a global strategy inside companies.

In this context the CIO is one of the few inside a corporation with a bulletproof knowledge of the processes and practices of almost every area of this corporation. A CIO is or should be able to understand the impacts of a strategy as a whole, or identify Process catalyzers that would not be obvious to people involved in a too detailed or too high level process (I recommend  reading “Breakthrough IT: Supercharging Organizational Value Through Technology” by Patrick Gray if you are still skeptical).

Where to start digging ?

CIO’s have to focus on IT’s impact on business results by assessing, measuring, promoting what IT does for the business. They may have to review target and extend time horizons on some IT projects and maybe sometimes abandon some of them. A good start would be that they ask themselves “what did I start as project yesterday that I would not start today ?”. They will have to avoid “nice to have” projects that are sleeping on shelves and that some department may dig up since they have now more time and prefer focusing on project with short terms ROI. CIO’s should list strategic software’s under maintenance and train employees while their workload is lower in order to be ready when the crisis will come to the end and gain advantages on competitors (especially if this competition is coming from Asia where the recession impact seems to strike less than in Europe or in US).

Conclusion

Instead of fighting against cost reduction, CIO’s will have to prove their added value to the global strategy by embracing business more today than ever before. he has to communicate this strategy inside his department so that any member of his team could be aware of the role he/she is playing in the IT considered as corporate innovative engine and not as cost centre.