Chief Digital Technology Officer & SVP
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Wine with your Turmoil? Insights from our CIO Dinner
Talking to IT leaders over the past several years, I often heard recurring concerns about driving down costs and increasing efficiency. And why not? IT needs to operate as effectively as any area of the business. But today, as the economy continues its steep downturn, we have gone far beyond a tough quarter or tightening the belt. These are extraordinarily tough times presenting once-in-a-lifetime scale challenges for businesses, their leaders and the workforce.
So how do you begin to tackle tough times for the IT industry? We started with dinner. Together with PA Consulting, Harvey Nash hosted a CIO Dinner in Chicago on November 5, 2008, to address the critical challenges CIOs and their businesses face. Over 30 area IT executives joined us to discuss what they are doing to maximize results during these unprecedented economic times.
I cannot tell you we found the magic bullet that will make your workplace and marketplace challenges disappear. But we did walk away with valuable business insights and the knowledge that most CIOs are not slashing IT budgets or cutting projects. In fact, we learned that many businesses are depending on IT to continue "full steam ahead" with an altered mission: to find ways to increase savings and re-invest those savings back into IT initiatives. Despite the tough times we are facing, it seems that many businesses are offering their IT organizations an important opportunity to demonstrate bottom-line business value.
To share the knowledge I gained from these savvy CIOs, I would like to outline a few of the key topics I heard again and again from my individual discussions with IT leaders and during the main discussion.
1. Application and Infrastructure Rationalization:
IT organizations use rationalization as a way to continuously streamline applications and processes to ensure they are meeting business needs. From mergers and acquisitions to changes in business or technical strategy, IT application portfolios and processes can quickly become outdated, redundant, non-essential or poor-performing. Regular reviews (or IT rationalization) allow enterprises to keep resources focused on key business objectives, which reduces operating costs, increases performance and ensures budgets are supporting strategic initiatives. One participant at the dinner saved millions on server costs through the rationalization process.
2. Social Media Initiatives:
Nearly everyone was investing in innovative technology that would promote collaboration. Whether it was through wikis, social networking communities, open source applications or organically grown sites, portals or groups, these technologies were talked about as some of the best solutions for promoting efficiency and cost savings enterprise wide. Providing reliability, flexibility, transparency of processes, and often less dependency on certain vendors, these efforts touch and support the entire business providing a cost effective way to survive and even thrive in the downturned economy.
3. Rationalizing Outsourcing:
Organizations are looking closely at the roles and functions they outsource. One CIO explained that his/her organization saw up to a 15% cost savings by pulling certain infrastructure back in-house.
The group agreed that now is an important time to assess outsourcing and offshoring operations. Outsourcing solutions are marketed and designed to deliver tremendous savings and value. If an outsourcing solution is not reducing costs while expanding resources, many leaders said that now is the time to make a smart move to a new provider, a new location or new approach. Some considered moving their offshore operations back while others were considering rightshore models--the blend of onshore and offshore resources.
4. Performance Management:
I was proud to be an IT industry insider when the discussion turned to teams and talent. IT leaders did not talk about layoffs and cuts but instead focused on ways to encourage outstanding performance. Many IT leaders discussed the importance of developing successful training and retention strategies. The idea of performance management programs suggested as a way to mitigate immediate pain related to the economy and to establish stronger internal processes and a culture of hard work. Discussion throughout the CIO Dinner highlighted the fact that companies are closely assessing staff in all areas (not just in IT) and looking at the programs they already have in place to ensure they are measuring the right elements of job performance and that they are tied to key business objectives.
It was inspiring to hear the optimism as well as the effort and innovation these IT leaders have already undertaken to enhance their organization's agility and capability to meet business requirements in today's changing economy. We will be continuing to provide more thoughts and solutions from future dinners and events, including our Strategic IT Leadership Survey with results released in early 2009. Be sure to stay tuned and, in the meantime, share your ideas here by adding a comment or sending me a note!