An IT Strategy for tough times

Over the last ten years companies have spent like crazy on information technology. Now, as we head into a significant economic downturn and the bucks start drying up, it’s imperative that CIOs engage senior management in the development of their company’s IT strategy. While it’s always been important to get senior management comfortable with the fact that IT strategy is aligned with the business, in tough times much more senior management involvement is required. Let’s review the reasons why.

Firstly, upgraded computer infrastructure, new enterprise resource planning (ERP) modules, a strong commitment to peripherals of all sorts and their remote connectivity, deep Web sites and forays into Web-based business have collectively and significantly increased the degree to which the company is now dependent on information technology. Just keeping the technology humming and refreshed has become central to the viability of the company’s operations and its corporate services.

An IT strategy that starts reducing dollars for technology refreshment as times get tough can place a company in grave danger. This is especially true where a company may have to adopt business survival strategies that require high-grade infrastructure capability. In tough times as well as good times, the price of IT-dependency is maintaining technology capability. More than ever before, management needs to ensure that maintaining service standards remains a top priority.

Need To Rethink Approaches

Secondly, as cash dries up and share-value diminishes, company strategies for growth will have to be rethought. In tough times, partnerships and strategic alliances that share risks and investment capital become more attractive than acquisitions. Such business strategies require a strong technical capability in place to ensure harmonization with the new partners. An IT strategy that has not been revisited by senior management since the downturn began might continue to reflect a posture of support for business growth or development strategies that are no longer viable.

By exploring the main contours of the company’s current IT strategy with senior management, a CIO can uncover or confirm changes in company direction or business strategies that are being contemplated. Such an exploration is a critical first step in upgrading the company’s IT strategy to accommodate possible new directions.

A third and equally important reason for closely engaging senior management in the development of an IT strategy is related to changing the management culture to better reflect the new realities of tough times.

Fat Times Vs. Lean Times

In fat times, management usually isn’t under a lot of pressure to look for opportunities to leverage the company’s current IT asset base. Often the attitude is “Got a problem? Go buy a solution.” So rather than looking to patch together existing assets (a data warehouse, CTI resources and a search engine) and giving the application development team the new challenge of creating, say, an enhanced CRM capability, the company spends a fortune buying CRM software off the shelf.

While buying new stuff may be necessary, even during lean times, the challenge for a CIO is to get senior management to sign off and promote a broadening of the company’s IT strategy to include leveraging. The goal is to have managers assume responsibility for looking for leveraging opportunities as a first order of business, before buying anything.

Leveraging won’t happen in a vacuum, however. Successfully implementing such an initiative will require that the CIO initiate two related programs.

The first program is a technology scan for IT-based business opportunities. While such a program will cover opportunities presented by new technologies, a significant percentage of the opportunities covered should illustrate the successful leveraging of technologies already in the company inventory.

Finally, the CIO and the head of HR will want to begin a program of management training that promotes a leveraging philosophy and leveraging skills. This need not require an expensive curriculum or high-priced help. Monthly discussion groups, site visits to local companies already leveraging their assets and some performance bonuses for those undertaking a successful leveraging initiative should do it.

Chuck Belford is president of Management Smarts Inc., a Nepean, Ont.-based management consulting and training company. He can be reached at [email protected]

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