In New York, at the pulse of global financial operations, the bulls and the bears coexist peacefully. Both viewpoints were represented at our March 5 Smart Enterprise Exchange event on the topic of Continuing to Innovate in a Difficult Economy.

A range of speakers offered more than 35 senior IT executives widely different perspectives and advice. Many comments reflected a focus on low-risk infrastructure projects and a reassessment of offshore outsourcing strategies. And while acknowledging the bears, most seem to be hoping that the bulls make a comeback very soon. Here are some highlights from the presentations:

David Malpass, economist and President of Encima Global, described the current recession as deeper, more sudden and different from past downturns. While other recessions were inflationary, he said, we are now in a period of deflation, where U.S. federal government spending is key to a quick recovery. Although he still expects the bear market to continue this year, Malpass believes that if the U.S. government buys assets, such as mortgage-based securities, and invests in the private sector, it will help the credit freeze begin to thaw. David also told me that "the trough isn't in view yet, making it very hard to manage IT." His advice? Proceed cautiously for a couple of months until more is known about jobless claims, credit markets and stocks. [For details from his presentation, download the slides here.]

Pedro Villalba, Senior VP for IT and CTO at EmblemHealth, spoke about opportunities to work smarter — not only to do more with less — in the prevailing economy. It's more than a semantic distinction to Villalba, who is implementing an IT service-management strategy for the $8.5 billion health-insurance business. He expects to show an ROI of $4 million over the next three years as a result of the plan coupled with several consolidation efforts now under way. Even better, he will reinvest these savings into new IT projects for his 5.4 million members based in the northeastern U.S.

Villalba expects to reap huge efficiencies from consolidating data warehouses, customer service platforms, e-mail and data centers, and by process standardizing. The broader goal is to fuel innovation, not just to maintain a "steady state," Villalba said. EmblemHealth already has reduced nondiscretionary, or maintenance, spending to 45 percent of the budget from its previous 65 percent. "The rest goes to new initiatives and R&D," such as new e-commerce efforts, according to Villalba. [See his slides for more details.]

According to Dave Hansen, Corporate Senior Vice President and General Manager for CA's Security Business Unit, an increase in business mergers and acquisitions means that IT has a growing and critical role to play in maintaining transparency and seamless system integration for customers. And it's the CIO's role to promote IT's successes and to communicate its value throughout the organization, he said.

Echoing that sentiment was Kamal Bherwani, CIO at the New York City Health & Human Services agency. "You can't innovate alone," he said. "Everyone has to see IT as an asset to the business, not a cost." Additionally, he suggests that CIOs revise their metrics to reflect the effectiveness and operational efficiencies of IT projects, not simply look for traditional ROI in this economic environment.

From which perspective — bull or bear — does your business operate? Are short-term concerns overshadowing your long-term plans? Please let me know at editor@smartenterpriseexchange.com.

Paula Klein
Editor and Community Manager
Smart Enterprise Exchange