The role of a CIO in the age of austerity

Austerity is on a lot of people’s lips at the moment.  Economic growth in many developed countries is low. Fears abound about a “double-dip recession”. And government deficits have reached historic highs causing unprecedented cuts in public spending.

An initial response to this might be that IT spending and departments will be hit significantly, that cost-cutting will be demanded by company boards and that IT will simply have to ride out the economic downturn and put off ambitious and transformational projects until sunnier economic conditions return. Towards the end of 2009, Gartner predicted a rebound in global IT spend, from a decline of five per cent in 2009 to modest growth of three per cent in 2010. If anything, this prediction is likely to be an overestimate. Sentiment has worsened and uncertainty has increased in the last few months.

It strikes me however, that straightened and challenging economic conditions provide exactly the environment that CIOs can shine in.  It is the companies that innovate during difficult economic times, both to become more efficient as well as develop and launch new products, which will emerge the winners. To any organisation that deserves a CIO, where technology is strategic, the role of IT in effecting change is fundamental.

As I talk to senior IT people in the market, on customer visits, at conferences etc. there are themes that come out on a consistent basis. Here are five:

Investment in IT for its own sake is even deader than it was:
Either a project needs to make money, save money or keep someone out of jail. A truism perhaps, but one to always remember. All participants in the industry, vendors included, have a responsibility to justify IT investments.

No rip-and-replace:
New software acquisitions must work with existing assets wherever possible. This protects previous technology investment but also it means the focus is on building on what currently exists to build additional value.

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