Managing IT in a Recession

You can’t click on any business or consumer website (or read the newspaper or watch TV) these days and not see the impending financial doom-and-gloom: “Odds of Recession Seen Rising,” says The Wall Street Journal. “Stocks Slide Amid Subprime Woes,” from The New York Times. Even the humor site The Onion is getting into the mix: “U.S. Takes Out Debt-Consolidation Loan.”

While technology sites, like CIO.com, have been following this news (perhaps alluding to the possible economic consequences in our articles), no one has really asked the question of what should CIOs be doing to prepare?

IT budgets and spending plans have been set long ago, though I’m certain changes can be made on the fly if something unplanned for arises.

So what I’m wondering is: What kind of belt-tightening do CIOs do, if they do anything at all, at this time?

After all, the recession isn’t a sure thing. “The Federal Reserve is not currently forecasting a recession,” said Fed Chairman Ben Bernanke in a recent Journal article. In addition, he pointed out how difficult it was to actually call (or determine) a recession, due to the volatility of the financial markets and uncertainties in economic trends.

For CIOs living in the day to day, do drastic (and perhaps unwarranted) cost-cutting measures serve only to cause undo angst among staffers? Or does that fiscal foresight bode well with your executive peers and boss (CEO or CFO)?

On the other hand, should you avoid looking like Chicken Little, and ride out any potential storm and take necessary financial actions when the bad weather actually hits?

This seems like an area where CIOs with lots of experience (where were you in the early 90s and after the dotcom bust?) could provide some historical perspective and sound advice to others. What’s your take?