The slowdown in the US economy over the past year has created
considerable pressure on chief information officers (CIOs) in the
US. Hit IT budget cuts, they are struggling to maintain business
value with fewer resources, and are probably having a harder time
than their counterparts in the UK.
There were, therefore, valuable pointers for UK IT directors in a
series of think tanks at the Richmond Events' US CIO Forum last
week, facilitated by consultancy AMR Research.
Despite the state of the economy, CIOs have not laid many people
off. Their biggest problem is that they cannot replace staff who
decide to leave.
So training, traditionally the poor relation, is currently getting
a boost to enable existing staff to pick up from where they left
off. Training programmes, providing new skills for the CV, are also
encouraging staff to stay.
An important development is cross-organisational training and
development between IT and the business, which involves bringing
business analysts into IT departments and vice versa. So business
analysts are now recognising that IT staff are trying to do too
much with too little, and IT staff get to appreciate the
business.
One area of major saving is with consultants and contractors. Where
outside help is needed, for example with new large enterprise
resource planning projects, consulting costs are going up front as
part of capital expenditure. They are now a fixed cost.
Many CIOs are currently re-negotiating heavily with contract
agencies, cutting the number they deal with and slashing costs by
up to 30% without the loss of staff.
CIOs have also become more ruthless in tackling the traditional
persistent problem of project overload. They are looking to the
business for help with project prioritisation.
Two main approaches have emerged on a broader scale: first, to put
the onus on to the business to prioritise and rank projects; and
second, to set up joint IT/business user steering committees to set
priorities jointly. This is part of the trend for US CIOs to align
IT more closely with the business. This has long been
bread-and-butter consultant-speak, but it is only now, with the
catalyst of the recession, that many ordinary US CIOs are getting
down to rethink their whole IT strategy. The aim is to get IT
viewed as a value centre - not a cost centre.
This is hard, with so many still reporting to chief financial
officers, but there is now a new mood among CIOs to ensure that the
chief financial officer really understands what they do.
Much of this may sound like "motherhood and apple pie" - and it is.
The difference now is that among ordinary US companies such
thinking is fast becoming reality.