Thursday, July 7, 2022

CIOs told to prepare for double-dip recession

Ongoing uncertainty about the current recovery means that CIOs need to be prepared for all eventualities, including a second recession, according to analyst house Gartner.

Not many CIOs are ready for another recession the analyst warned.

Ken McGee, vice president and Gartner fellow, said: “Just the potential for a second business downturn should be sufficient to compel CIOs to plan for another business downturn.

“However, most CIOs will not have a response strategy prepared if a second business downturn occurs.”

Nonetheless, McGee believes that CIOs will be able to deal with a second downturn if they start making plans now.

“For the first time in the history of the IT industry, more than 90 per cent of CIOs today possess extremely recent and practical experience dealing with a recession,” he said.

“We strongly urge these recession-hardened CIOs to leverage their recently acquired experiences by proactively preparing their entire organisations should another economic downturn occur within the next 12 to 18 months.”

Gartner advised CIOs to start their preparations by suggesting meetings with executives now, to establish guidelines across the business early in the event of a downturn.

CIOs also need to assess planned IT projects under the current and next financial year’s IT budget to identify which could be postponed or cancelled if necessarily.

Furthermore, Gartner recommends that CIOs adopt zero-based budgeting for next year’s projects and to make the costs of starting or continuing projects clear to C-level executives.

Gartner added CIOs should also deploy zero-based budgeting to the business’s existing applications, attach an estimate of the annual cost incurred to maintain each application and encourage business unit executives to sign a document confirming that they understand the annual cost of maintaining running and applications.

“Our bottom-line advice is to prepare the ‘second recession’ plan, rehearse the ‘second recession’ plan and hope that you never have to use it,” said McGee.

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Jim Love, Chief Content Officer, IT World Canada

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