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Budgets are allocated every year without deviating from the company's long-term vision. As they go through the course of a fiscal year, each item is examined under the microscope and checked for quantifiable benefits. External factors (like the state of the economy in a certain year) may be harsh, and so the business will try every possible means to increase revenues.
The CIO must work with limited resources and maintain a low operating expense. Bagdadi recommends prioritizing tasks in such a way that those of utmost importance are dealt with first. Projects that will not have an immediate impact, or those that can wait till the CIO is given some more room as far as the timelines and the budget is concerned, need to be put on the backburner.
The next lesson for most CIOs is the importance of aligning IT projects to business strategy. Experience has taught CIOs like Manish Choksi of Asian Paints that in the case of projects having business impact, that is, if there are some business deliverables that need support from an IT solution, the IT project needs to work hand-in-hand with the business to enable them to release the deliverables within the given timeframe.
CIOs must clearly understand the objectives and constraints that they work under. Every project should have a quantifiable benefit. Elements of surprise that spring from the CIO's desk are not well received in tough times, and CIOs need to be diligent about their planning. "In our company, where cash is king, every single expense is going to be scrutinized," says Prashant Cherukuri, the chief delivery officer of IT services for Aditya Birla Minacs.
Bagdadi strongly recommends resisting marketing gimmicks of vendors during recessionary times. He says, "Every solution should be evaluated thoroughly, and implemented only if it makes sense for the organization."
As organizations get more mature, the IT and the business budgets are integrated. Through the course of the year, the business very closely monitors every project's progress, and so CIOs cannot be frivolous.
Cherukuri believes in building relationships with the business, especially during tough times. He feels that the business often inclines towards seeking outside help, rather than trust its own IT department, due to the lack of trust.
Layoffs have been common, but maintaining employee morale is important. Projects start off with a certain amount of resources, but testing times could put a strain. Minacs went through its share of layoffs, and Cherukuri recommends being frank and honest about the current situation with the employees is the best course in such scenarios.
People feel insecure at such times, and it impacts their work. However, constantly updating employees and talking to them about the company's goals can help them better understand the organization's point of view. Cherukuri recommends using training budgets to build employee skills, at such times.
When resources are under strain, outsourcing is an option that CIOs need to consider. Outsourcing to multiple vendors may help them get their work done more efficiently. However, management of multiple vendors increases the complexity.