CIOs will play key cost-cutting role during downturn

"Yes, we can help you cut costs quickly and deeply. How far would you like to go and how fast would you like to do it?" That, says Gartner ...

"Yes, we can help you cut costs quickly and deeply. How far would you like to go and how fast would you like to do it?" That, says Gartner analyst Mark Raskino is what CIOs should reply when their business colleagues come to them for advice over the next 12 months.

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Raskino said CIOs are in a difficult position. "They can't plan because their CEOs don't know what to plan for," he said. "Change is happening faster than people can think. All previous assumptions have been thrown out, and we may have to rebuild the foundations of the economy from scratch."

Raskino said the watchword for CEOs for the forseeable future was 'restructure'. "But no-one knows what for," he said. The future was fogged by uncertainty, volatility and raw fear, he said.

Despite this, CIOs could do much to prepare for a more volatile environment by being agile and responsive to the business's demands, he said. "IT is not the problem it was in 2001 with the dotcom crash. "Since then we've run lean shops and we've taken a lot of cost out. But now we need to anticipate what's going to happen."

He said CIOs should expect their companies to lay off staff. They might have to include their own staff in that to show they were sharing the pain, but it was important to make sure that those who left did not leave behind logic bombs and that passwords and permissions were properly revoked.

Access to cash and capital would be crucial, and those with money would impose new conditions that would have to be incorporated in IT systems, he said.

Mergers and acquisitions could rise as the weaker companies were bought up. These would have to be brought into the company smoothly, he said.

Raskino expected some industries to restructure entirely. "The phrase 'too big to fail' is going to gain currency," he said. "But what will that mean (for our idea of capitalism and the market economy) when some companies are semi-nationalised or have shareholders with planning horizons longer than three years? CIOs will have to adapt to these views as they emerge," he said.

He said companies' old IT plans had become irrelevant in the face of the fundamental changes facing society. "From now on it's about zero-based budgeting and rebuilding on the assumption that there will be new business models," he said. "Expect sudden, peaky demands from the CEO."

This was an opportunity to ditch some legacy systems for experimenting modern ways of doing things, such as SOA and cloud computing, he said. It could also clear the decks of "zombie projects", those whose sponsors had shrunk back into the undergrowth.

"CIOs can now ask for and get permission to clean up the project portfolio," he said. This was their chance to sort out deep-seated cost centres they'd been dying to get rid of but couldn't because they didn't have the political clout, he said.

Raskino said bosses would be looking for managers with clear ideas. "Crisp, clear answers are needed now. The world is turning black and white, not grey," he said.

But he added that it would be increasingly important to manage the messages that the changes sent out about the company. "The demand for PR is going to grow," he said.

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