IT chiefs prove business value

The slowdown in the US economy over the past year has created considerable pressure on chief information officers (CIOs) in the...

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.

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