April 2009

CIOs and their business counterparts are becoming accustomed to moving ahead despite economic challenges. In many cases, they are already looking forward to the turnaround and planning to emerge stronger than competitors, thanks to good planning and flexible organizational models.

Here is a recap of the key advice to follow and resources that will keep you on solid footing for the remainder of 2009.

1. Prepare your plan. According to Ken McGee, Gartner Vice President and Research Fellow, CIOs should have their "return-to-growth" plan completed no later than May 1. McGee told Smart Enterprise Exchange members at our Seattle event in March that 2009 is a low point of the downturn and therefore, they should use this time to trim costs, streamline processes, optimize procurement and prepare for an upturn of the U.S. GDP in 2010. Specifically, he recommends consolidating software contracts, bidding competitively on network services and zero-basing application and project budgets. For more details, download the slides.

2. Stay flexible. In cases where whole industries shift and change, IT has to adapt and innovate quickly. The New York Times, like other publishers worldwide, must find new ways to grow online at the lowest cost. The Times is using Amazon Web Services to help introduce new services for online readers, Derek Gottfrid, Senior Software Architect and Product Technologist at NYTimes.com told Smart Enterprise Exchange. In 2006 and 2007, Gottfrid began using Amazon's Elastic Compute Cloud (EC2) and its Simple Storage Service (S3) for economical storage of the newspaper's archive of 11 million articles published from 1851 to 1980. The PDF archives were then made available to readers over The Times' web site. For more about CIO innovators, see February Smart Practices, IT Spurs Growth Opportunities.

Judy Estrin,
CEO of JLABS LLC

3. Take small steps. Judy Estrin, CEO of JLABS LLC and former CTO and Vice President at Cisco, reminded CIOs that there are two kinds of innovation — disruptive or breakthrough innovation, and incremental innovation. "Incremental innovation keeps you ahead, and it lets you serve customers better. Breakthrough innovation allows you to leapfrog the competition or enter into completely new markets for growth in the next three, five or even 10 years. We need a balance of both right now." Read the full interview at January 09 Smart Insights.

4. Join a roundtable discussion. "Issues & Opportunities in Recessionary Times" will be the topic at an event sponsored by The Hackett Group April 28 at the Haymarket Hotel in London. Analysts will present insights gleaned from more than 4,000 benchmarking engagements at more than 2,700 leading businesses. For details about other Hackett events, see the March 09 Smart Resources.

5. Focus on industry-specific advantages. For Geoffrey Brown, Senior VP and CIO at Inova Health Systems, accelerating the changeover to electronic medical records will also speed up growth and lower costs. Brown shared his experiences with his peers at our Washington, D.C.-area Smart Enterprise Exchange event. Download the slides.

6. Reprioritize projects. Panelists at our Online Smart Enterprise Exchange in February discussed ways to reprioritize projects to keep costs under control. Vercie Lark, CIO at Embarq, now conducts monthly reviews of business demand for IT services and will take on only projects that meet three criteria: productivity improvement, customer satisfaction and revenue generation. "It's a big change for us," he said. Shorter paybacks and tougher standards are also being implemented at Pacific Coast Companies, said CIO Michael O'Dell. With the U.S. construction industry hard hit by the economy, O'Dell said he filters projects based on their business value and short-term payback. "We're urgently looking for creative ways" to help customers, he said. You can hear the full podcast here.

7. Follow Asia's lead. CIOs in Asia plan to allocate 24 percent of their budgets to growing the business and 20 percent to improving the process efficiencies of their businesses, according to the Gartner 2009 EXP (Executive Programs) Survey of Asian CIOs conducted late last year. According to the survey, despite a challenging economic environment, the region's CIOs still expect their IT budgets to grow at an average 5.32 percent in 2009, compared to flat budget growth of 0.16 percent reported by CIOs globally.

In Asia, one-third of CIOs reported no change in their budget from 2008, 53 percent say budgets will go up, and 13 percent reported a cut in IT budgets. The worldwide survey of 1,527 CIOs was conducted by Gartner EXP from September 15 to December 15, 2008. It included 71 CIOs from Hong Kong, India, Malaysia, Singapore, Taiwan, Thailand and the Philippines.

8. Compare strategies. The Society of Information Managers' Atlanta chapter is hosting a forum June 19 on the topic: "What do we do differently in IT as a result of the economy?" The moderator will be Harwell Thrasher, author of Boiling the IT Frog: How to Make Your Business Information Technology Wildly Successful Without Having to Learn Anything Technical (BookSurge Publishing, 2007). Among the discussion points will be: cost-saving; innovative ways that IT can help the business deal with economic downturn; how to keep morale up in a climate of layoffs; how to select the projects that can be delayed, and which should be pursued in spite of the economy. Find more information here.

Dave Hansen, Corporate Senior Vice President, CA

9. Embrace smart sourcing. Offshoring has been a controversial strategy for U.S.-based IT operations for some time, but the benefits outweighed the risks for many businesses. Now, the discussion is heating up again as U.S. IT workers face unemployment in greater numbers, India's service firms are challenged by lower-cost providers elsewhere, and data-center consolidation trends continue. Economist David Malpass, president of Encima Global, told attendees at our recent New York Smart Enterprise Exchange event that while there is less outsourcing to India recently, the country's economy is stable and there are still opportunities there. Download his slides here. Dave Hansen, Corporate Senior Vice President at CA, said that costs alone shouldn't drive decisions about offshoring projects. "You should consider all aspects of the business and IT value chain before deciding what and where to offshore. The global talent pool is continually shifting and changing and you need to reevaluate the options often," he said.

10. Take the CFO to lunch. That was the advice offered by Daniel Mintz, outgoing CIO at the U.S. Dept. of Transportation, to Smart Enterprise Exchange members attending our Washington, D.C.-area event in February. The point is to discuss the financial state of your enterprise with business leaders on an ongoing basis to stay in sync at all times. View his presentation here.