CIOs stare down global economic woes

LISBON – While this could be a scary time to run IT for a bank or financial institute, CIOs in other industries say they are hoping to remain relatively insulated from the collapse of global money markets.

Speaking a conference for employees of technology media publisher International Data Group (IDG) Monday, a senior IT executive from a major sports equipment supplier, for example, as well as a pharmaceutical CIO, said their organizations aren’t overly concerned about what most experts say is a looming worldwide recession.

“We have those cross-training machines, which run about US$4,000. That’s a very expensive consumer line, there,” said Thomas Hankel, vice-president of global IT at Amer Sports Corp. in Helsinki, Finland. “If you have trouble paying your loans for your house, you’re not buying one of those, so we’re seeing drops there. But most of our portfolio ranges from US$50 to US$4,000. There’s still a lot of room.”

Sean Burke, who spent 10 years at drugmaker Galderma as CIO, said that some sectors run in different financial cycles that don’t run in parallel with the global economy, including his own.

“Most of us here pay for our health care through publicly funded systems, or through insurance. The money is locked up and available,” he said. “There could be a downturn over time but immediately, in straight pharmaceuticals, there is no hit. We could see growth this year.”

The dismal financial news might prompt some companies to drastically slash IT budgets as they did following the dot-com bust, but Hankel said that’s not the case with Amer, which employs 6,000 people and has Canadian offices in Toronto. As the company went through a reorganization that resulted in an umbrella group with several different brands such as Spalding and Salomon, Hankel’s group has been setting up shared service bureaus and streamline business processes. IT is a big part of that, he said, and the company has no intention of slowing down.

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“We’re almost ready to go. We’re trying to spend more to get there even faster,” he said. “We want to act from a position of strength. Many of our smaller competitors might have even bigger problems.”

The most pressing issue for CIOs might not come from the economy but the traditional battle over IT’s perception within the enterprise. That was the case for Burke, who said he left Galderma after a change in senior management.

“You still meet people that see IT as a necessary evil and nothing more, or that what they’ve done is just dressed up the IT director job,” he said. “We went from being quite forward-looking in terms of the use of information and technology and almost taking a retrograde step backward. The decision was, ‘You don’t contribute to value chain so you don’t deserve to sit at the table. And it happened overnight. It was like flipping a switch.”

As companies demand more from employees during tough times, CIOs may have to be more flexible in what they allow their employees to do on their employer’s time – and network, said Hankel.

“If I want my team to work 10 hours a day, I cannot say you can’t do online banking. My security officer gets upset, but that’s a business reality,” he said. “We have to find a way to do it without opening the door to our networks.”

CIOs are also looking more closely at the way people really work, said Burke, which can change the kind of technology they provide users. This is especially true in terms of mobility. “The majority of the time, they don’t need to have the full-blown power of a computer. They need access to customer lists, some information on current details of an order,” he said. “They’re communication devices, not computing devices.”

As much as some kinds of companies might be safe from the economic fluctuations right now, Burke added, CIOs are facing as much uncertainty as everyone else.

“Nobody knows (what’s going to happen),” he said. “Are there any more secrets? Is it going to be a prolonged recession?”

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