IT Budgeting Advice from Ram Charan


Best-selling author and executive coach Ram Charan is out with a new, timely book, Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times.

The book contains advice for leaders on all levels, but a short section on CIO strategy caught my eye. Charan starts the section with some conventional wisdom for CIOs: expect that your budget will be cut.

Once CIOs face that fact, Charan says they should do reprioritize projects--first, make sure compliance initiatives are fully funded; second, focus on "utility-oriented" projects, or "things that keep the lights on and the processes running."

At that point, he says, your budget may well be kaput. If that's the case, focus on value-creating technologies (like automation of data gathering and distribution), Charan advises.

His parting note: "Now it is time to be a cost cutter and strengthen the core of the unit, keep it running, and reassure top management that compliance and maintenance are not impaired in any way."

Sure, cost cutting is essential is this environment--our upcoming 2009 IT Spending study will shed more light on this--but I imagine some will take issue with the idea of battening down the hatches. Before the recession took hold, many IT finance experts urged businesses to use the downturn to invest in IT to gain competitive advantage. (One of those experts, benchmarking guru Howard Rubin, says it'll cost companies far more to catch up then to spend up front.)

But as the recession ripples through more and more sectors of our economy, I wonder how many CEOs and CIOs will actually take the plunge.

So here's a question for CIOs: Are you looking to invest in new technologies this year? Or is your focus strictly on cost cutting?

I imagine there's a mix of strategies, despite the looming recession. I'd like to hear what people are thinking.


2 Comments for "IT Budgeting Advice from Ram Charan"

  • Dmitry August 26, 2013 11:14 pm

    Thanks for the link, Pat. I left a comment over there. Now I'm going to leave a slightly different one here: One of the main reasons I read book blogs is to hear about books. I think a good book blogger should first and foremost review more than just the already insanely popular books. Because a blog is an opinion with an inherent bias. An individual blogger's opinion can never be the definitive response to something. But it can bring that something to the attention of others, so that they can make their own decision.That's why I don't blog about books, even though I love them. I am always behind the curve on what's out there. And as fantastic as I think my opinion is, it's just not enough to make up for reviewing necessarily old books.So, yeah, keep on reviewing, and as long as one is polite, there's no reason not to read a book blog if t's in your prefered genres.

  • Daniel March 05, 2009 2:20 pm

    After reading 50 pages from the FED Beige Book Report last night, it looks like the probability of more cuts are expected in most industries and sectors. Unlike past recent recessions, this economic storm is fundamentally caused by a "global" financial meltdown. Outlook going forward is still bad. I see no catalyst for a turnaround. Thus, it is time to review IT priorities again and prepare for further cuts. Ram's advice is solid.

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