CIO
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As the economic downturn hits year three, how are CIOs coping with continued pressure to cut costs? Five CIOs from the Information Management Forum, an association of senior IT and business executives, explained their approaches during a roundtable discussion with CIO Deputy Editor Richard Pastore at the IMF’s recent meeting in San Diego. For the complete discussion, go to www.cio.com/printlinks.
LEE LICHLYTER, vice president and CIO at Butler Manufacturing, engages the board.
In nonresidential construction supplies, the past 18 months have been brutal, with capital spending way down. There’s a willingness to invest, but you’ve got to show the proof. And that proof has gone beyond the business level?I’ve seen more awareness at the board of directors level than I ever saw before. Their questions about value are more insightful.
Most of us have already cut all the discretionary stuff. If there has to be another reduction, you sit down with the business functions and ask what hurts the least to cut. Invariably they choose to reduce service levels [such as the help desk] because that feels less painful to them or less real. It’s not always the best choice, but it seems to be the easier decision. It’s also tempting to delay a project down the road versus stopping something that’s active. But sometimes it makes more sense to cut a current project; the next project may have a better payoff.
WILLIAM MILLER, vice president of IS at communications company Harris Corp., prunes staff.
We are so concerned with value that we do an ROI assessment and sign-off for every project over $50,000 now. We have two executive signatures on each project?the business unit CIO and the financial controller, or if it’s a larger project, it’s the president?so there’s no finger-pointing down the road.
Also, we have redoubled our efforts to manage poor performers out of the business. With the industry suffering, there’s very low turnover; everybody is laying low. They’re generally not going to leave on their own. So it’s important to actively work the poor performers out. Make sure your management team understands that they won’t be punished in terms of resource shortages if these people leave. It’s not fair to the rest of the workforce who are busting their humps in tough times to have these poor performers by their side, not carrying their weight.
DORON COHEN, senior vice president and CIO at Canada Life Assurance, shuns software upgrades.
In insurance, IT is the product pipeline. Shrinking IT costs can improve efficiency but can also reduce production capability or slow down the ability to launch new products.
