What To Do Next -- For Your Company and Your Career
Hot topic: How to cope with the recession - what's best for your company and your career.
I spoke today with John Baschab, managing director of staffing firm Technisource Management Services and co-author of The Executives Guide to Information Technology and The Professional Services Firm Bible, about the focus for CIOs and other IT pros for the year ahead. "Unless you're giving up completely, you have to plan for the future," he says.
Some highlights from our conversation:
What should people be doing now? Seizing this opportunity to make changes - some you can only make at time like this, some you've been deferring during a period of growth.
One area is consolidation. There's a lot of duplicative stuff in your company. Maybe you've got multiple telephony platforms, operating systems, data centers, vendors, locations for support, even staffers. Now is a good time to take a look at consolidation of multiples. It reduces cost, and gives you a platform from which to grow that is easier to scale up.
We've just come out of a period of growth, when speed of is the essence, and speed leads to sprawl. Decisions made in haste made sense at the time, these are times that lend themselves to this kind of change.
Another change to seize is outsourcing. In an environment where you're doing staff reductions or changes to capacity, it's time to evaluate things like outsourcing data centers, or specific functions in IT that lend themselves to scale economics, like the help desk. If you're gong through a bunch of pain anyway, you might as well do this now. It also gives you a volume knob to turn - you can turn it down now and turn it back up when you need it.
Now is a good time to look at labor/capital tradeoffs. A lot of companies are cash rich, if you can make a capital investment of $1 million to reduce operating expenses by $400K a year, it's worth doing. It sounds odd to be spending money in this environment, but there are great deals out there. It could be a phone system that routes calls better to reduce administrative support, or a data center that virtualizes to reduce servers, service, and labor cost, it could be automation that implements better forecasting software that lessens administrative support. The job of the CIO is find where the paybacks are.
Maybe it's time to ratchet back your service level agreements a little bit, in order to reduce operating expenses. Those last few nines are where most of the cost is. This has to be done in concert with the business, you can't just drop it on them.
It could be time to dust off old projects. In growth mode, projects with good ROI made sense but fell behind compliance or mandatory projects. Now a lot of the latter are out of the way, and identifying hidden gems is good practice.
In terms of budgets, I'd suggest to any CIO to be preemptively taking in to the steering committee ways to reduce operating expenses, along with the implications of those reductions. Generally, the steering committee isn't going to take you up on it, but they were going to ask you to do it anyway, and this way you look like a senior executive and a peer, rather than someone who just responds to requests. You bring in eight suggestions, they pick three, you've made a real contribution.
The downturn will continue to hurt the industry. If you've got cash, now's the time to make deals on hardware and software. If you've got dry powder, that's good luck for you. It's a great time to be a buyer, which goes back to the whole capital/labor equation.
You'll see marginal vendors, who were hanging on and may lack capitalization or profitability, they'll shake out. As CIO you should be making sure you don't have mission critical stuff reliant on those you think are weak. Evaluate vendors carefully, and be careful about things like prepaid maintenance plans.
People try to do less of the same thing in hard times. That's fine, but there's also an opportunity to do more of something different. Things that improve productivity. Maybe now's the time to introduce open source software to your business, or focus on mobile computing. Things like netbooks for the sales force to let people take orders in field, or video conferencing rather than travel.
This favors people with operations and infrastructure background, rather than applications background. That's the direction for IT in the future. We were at the stage, at the end of the first wave of ERP, when custom development and interesting add-ons were the thing. You'll see people shrinking back from that, instead you'll see more of a focus on things that are productivity-oriented.
That means IT professionals should look to migrate to operations infrastructure side. The hard part is there's a relatively high wall between the applications side and operations infrastructure. One thing that never gets old: management, the ability to make the kind of decisions we've talked about. That's a rare commodity in IT. Being a good business person never goes out of style.