The state of IT: Primed for uncertainty

Thanks to shifts since the last downturn, IT is poised to weather economic turbulence with confidence

 

"Emerson is a $22 billion company with eight business platforms and a large number of datacenters, all of which have to buy and maintain firewalls and other security software," Spears says. "That's a difficult and expensive task. The edict here is to have considerably fewer datacenters in the company."

By consolidating to eight or 10 datacenters, Spears says, Emerson will not only be much more cost-efficient, it will also make it easier to deploy the most up-to-date security tools.

Yet these benefits also come at a cost: increased complexity, especially for CIOs who must suddenly grapple with the cost of supplying power and cooling systems to machines cranking at top speeds while ensuring 24/7 availability.

"Being an IT manager is probably the most difficult job in any company right now," says Spears. "Besides having to deal with continuous changes to technology, focus on efficiency, and increased pressure on costs, they now have to demonstrate they can manage the physical infrastructure of their datacenters. It's a very difficult position to be in."

IT leads the way
Five years ago, IT was clamoring for a seat at the table next to the C-level execs. Now, without IT, there'd be no table to sit at.

"IT used to be seen as the geeky guys in the big room with the fans and blinking lights who treat us like idiots when we call and ask for help," says Kris Domich, principal datacenter consultant at Dimension Data. "Now they're the strategic enablers of the business."

Over the past three years, Gartner surveyed 1,400 CIOs, asking them to rank their top 10 priorities for the year. Using IT innovations to create new products or services for their enterprises rose from 10th place in 2007 to third this year. IT budgets for companies who said they're focusing on generating revenue in 2008 see a bigger boost, too -- up nearly 5 percent, compared to less than 2 percent for CIOs whose primary goal is to make their departments more efficient.

However, A&M's Riddell cautions against companies who rush to sell internal services without careful planning.

"This is not something you want to do on short notice," Riddell says. "Providing IT services to your business has inherently different skill sets, sales and customer service components, and metrics than selling excess capacity or consulting services to other businesses. That usually fails pretty miserably."

Instead, successful CIOs see technology as so embedded in the business that it's inherently a part of everything the organization does, he adds.

"I'm working with a client in the advertising and marketing business," says Riddell. "IT is embedded in everything they do. It maintains information about their customers, transaction histories, and contract repositories. When executives there talk about what they need to do in case of a downturn, they realize that cutting IT by 10 percent is not a good idea. IT is the business."