The good news is that the IT downturn looks as if it's coming to an end. The bad news is that it is becoming a full-blown recession. The chill winds that have been blowing our way since Easter have now become positively arctic. Next year's budget needs cutting now and that means we need to shift our focus slightly from a technology bias to pure management.
Some kind soul pointed out to me the other day that I was old enough to remember the last recession and asked me how should an IT department prepare itself for the challenge ahead. If only life was that simple. Ten years ago our computer operations were fairly autonomous and less susceptible to the actions of others. In many ways we were better positioned then to control our regimes than we are now. Why is that? Because technology has become so pervasive in recent years, that's why.
Twenty years ago, or even ten years ago, most organisations had reasonable contingency plans for manual processing if their computer systems failed. Their business could at least continue, although impaired. Nowadays, however, almost every aspect of our lives depends on the instant availability of technology. Technology that we have to manage and continue to provide, regardless of the prevailing economic climate.
Our businesses no longer have the order books, typewriters and carbon-paper tucked away for the occasional system failure. Turning off the machine is no longer an option to control costs, even in a recession. So we
For the past four or five years we have been able to cite Y2K and e-business as strong justifications for our IT budgets and our paymasters have generally acceded to our recommendations. Now it seems, it's payback time. We need to cut our costs, perhaps sharply and quickly, without impacting on the success of our businesses. This will be a challenge that will affect most of us, throughout the IT department.
Given the likely scenario of budget cuts, we probably need a few personal and corporate tactics for survival. Let's look at some of the aspects that might confront us.
First, it's bad news for contractors. Big-ticket items are the first under the microscope in any recession. Contractors are also relatively easy to get rid of quickly. Enjoy your disguised unemployment, guys. It will be a buyers' market for the foreseeable future so you will have to be more flexible on rates and location if you want to protect yourself from the worst effects of the recession.
As it's a buyers' market, now is also a good time to screw down suppliers for new deals. If you can't make savings now, you never will. But a word of caution - it's quite acceptable to get a good deal and to make your vendors sweat a little blood to get your custom; but make sure that you are not cutting your own nose off to spite your face.
Things will get better eventually and people will always remember how you treated them when the going got rough. Loyalty is a currency that is rapidly being devalued and you should always keep your eye on the future, as well as the present.
The same principles apply to your own staff and organisation. Damage limitation is the order of the day so discretionary spending will inevitably be the first for the knife.
The external training budget is obviously a soft target, particularly in a poor jobs market. Staff are less likely to think about moving on at the moment, even if you do have to postpone long-promised courses. Please note that I said postpone, not cancel. Skills training and personal development are important factors in sustaining an effective department so budget cuts in this area need special attention. You need to assess the overall impact, not just the bottom line.
Our unfilled vacancies are probably going to remain unfilled for the time being. The pressures on headcount are creating a downward trend so it is time to make the best use of our existing resources. Let's hope that the recruitment freeze does not progress to the next phase - actual reductions. It is a sad fact of life that the best people are always the first to leave once you get into a redundancy situation. Now is the time for us all to check our succession planning and to identify any key posts that may have to be put on our internal "at risk" register.
In the meantime, we also need to make sure that our departmental profile is properly maintained within the company. We must make sure that everyone knows we are doing a good job, doing our bit to make the business a success. We need to play to our strengths and make sure that IT is a well-regarded function, high enough up the food chain to avoid predatory accountants!
So much for the management issues. What about personal strategies?
Well, we could all keep our heads down and hope that the problems go away, keep quiet and hope that nobody notices us. Batten down the hatches, guys, we're in for a stormy ride. Fair enough, this is one approach - and it will work for many people - if you like painting yourself into corners.
I believe, though, that action is often better than inaction. In 20-or-so years, I have only met one ITer who was genuinely independently wealthy. The rest of us have mortgages and need to work to pay our way. That is why we should all use this recession as an opportunity for upgrading our skill-sets.
How? By using the technology at our disposal, that's how. Most of us have access to the Web, either at work or at home. The Internet has a wealth of freely available skills resources. Now is the time to mine them, for our own benefit and for our companies.
I have seen the future and it is Web-based, pervasive computing.
The Web is not just for ponytails and air-heads. The new world of the future will definitely need some of the old-world transaction processing and client-server savvy people who understand the principles of resilience and commitment when applied to database transaction processing.
Now is a good time to enhance those proven skills with new techniques and tools. Most of these resources are available free, if you know where to look. Legitimately available - I am not advocating dodgy software cracks or wares!
Finally, another possible silver lining to the gathering cloud of recession is the opportunity for creativity. It's amazing what you can do, when you have to. Necessity truly is the mother of invention and, these days, information technology is very often the midwife so bring me some clean towels, plenty of hot water and an Oracle DBA.
What's your plan to make it through the rain?
Are you starting to feel the chill? Do you have any recession-beating tricks up your sleeve?> Let us know with an e-mail.
Colin Beveridge is an interim executive who has held top-level roles in IT strategy, development, services and support. He has held posts at a number of leading corporations, including Shell, British Petroleum, ICI, DHL and Powergen.
This was first published in October 2001