CEOs at two service suppliers have cautioned that IT directors need to balance the short-term needs of their operations with the longer term strategies already in progress, so that they can support 2009 business models that need to be both lean and flexible.
“IT staff working within a rigid infrastructure of on-premise IT are squarely in the crosshairs of this recession”, Charles Black, CEO of hosted desktop provider Nasstar said, pointing to news from Barclays Bank that it is to cut 400 IT jobs as the latest sign that the reliance on on-premise IT is no longer workable.
Black argues that no organisation can afford bloat in its IT and that there is a need for IT executives to fulfil a flexible, pay-as-you-go model using some of the maturing alternatives such as software-as-a-service, hosted applications and virtualisation.
Such technologies could allow IT shops scale their operations more smoothly and should help address a key imperative facing CIOs. “More than ever before, businesses need to find innovative ways of improving performance” noted Paula Sussex, CEO of Atos Consulting.
The line is that CIOs have to be able to manage the resources needed for the short-term, but also have to be in a position to be able to better plan for the inevitable upturn.
The chief of the business consulting arm of Atos Origin recommends that increase scrutiny be put around operational spending and costs. Any cost reduction proposal needs to be closely aligned to business strategy, rather than a blanket percentage cut being imposed right across the organisation.
She said it vital that IT heads work to improve business performance without jeopardising the long-term objectives of their organisations.
One recommendation is to contact long-term suppliers and seek their input into the cost reduction process. Together, it should be possible to drive forward joint cost reduction projects on the basis of reduced revenue but increased profitability.