My latest Forrester CIO client visits tell me economic uncertainty is actually helping IT leaders accelerate plans for the future. Sounds counterintuitive, right? Perhaps it’s just because I started in Europe, where the hourly ups and downs of sovereign debt crises cause government policy whiplash paired with market cap acid reflux. Most consider trying to plan anything in this environment, particularly slow-changing corporate IT systems, impossible. Or perhaps, as IT leaders, we’re still just haunted by the great tech recession a decade ago, and we just expect IT budgets will always be the target of corporate austerity efforts.
But one thing is clear: For some, uncertainty breeds paralysis. For others, the very presence of uncertainty offers a platform to drive clever and radical change. Consider two of the many stories about the latter I heard recently:
1. One IT leader uses uncertainty to reduce his dependency on Microsoft software clients. To be clear, every IT leader I met faces daunting budget pressure. This client’s business is producing basic materials for construction projects globally. Depressed demand for building materials means his company has turned otherwise dormant kilns for firing these materials into ovens for destroying old tires and drugs seized by police. Why? Because finding productive uses for capital investments helps (at least) service debt on that capital when current market demand disappears (and apparently, these kilns burn at such a high heat, they produce zero emissions – that’s cool).
So this IT leader is doing his part by optimizing his employee toolkit. Forrester’s most recent Strategic Planning ForrSights data shows two things: few people in enterprises actually use the full suite of Microsoft products, and even fewer engage in more than about 15% of the functionality of Microsoft tools. Yet prior analysis indicates that client software, archiving capabilities, and mobility support are some of the largest per-employee cost drivers in the Microsoft toolkit portfolio. Following my logic above, I’d argue there’s no better time for this IT leader to attempt pulling the familiar Microsoft Office tools from the grips of business execs who use it only occasionally. Today, it’s about getting productive use out of our capital.
2. One CIO is using cloud services to enter new markets, quickly. This CIO started our conversation by saying, “Matt, all you market analysts suggest the biggest cost benefit of cloud computing services is reducing headcount associated with administering commodity IT services – what you fail to understand is it often costs us more to make jobs redundant in my company than it does to keep people.” Yes, many of our clients are very direct with us – and she said it with a great accent, which stings even more. For this client, the inflexibility of labor laws and the power of labor unions is a far bigger constraint to her IT agility than is the complexity of IT systems or internal processes. Clearly, if you can’t recognize the benefits of an IT investment in a reasonable time period due to factors that exist beyond IT’s control, it’s not a strategy.
So this IT leader uses cloud services to enter new markets, quickly. At the same time as her IT budget is being cut by over 10%, this client’s company is expanding into new markets around the world at a breakneck pace. She claims to have found enormous efficiencies in IT infrastructure and operations by enabling cloud services like Google Apps, Workday, and more, rather than creating a new corporate IT footprint in these markets. Considered in this way, it should come as little surprise that brands like Google and Apple have penetrated the top technology brands used in the workplace in places like Latin America, China, Russia — alongside incumbent providers like Microsoft. Constraints that impede an IT strategy in one market, don’t always exist on other markets.
Stories like these make me realize a lot of IT leaders are thinking differently these days. They’re thinking like business leaders, finding new ways to apply technology for the greatest productive use, and innovating at a time and pace that belies global economic conditions and accelerates business strategy. Please share thoughts here, and/or join us for CIO Forum (#CIOF12) in Las Vegas on May 3-4 or CIO Forum EMEA (#CIOE12)in Paris, France on June 19-20. You’ll learn how rethinking IT strategic planning and applying some fact-based analysis can grow yours and your teams’ impact in uncertain times.
by Matthew Brown